Description

Reply:

Peer 1: Budgeting involves detailed plans, expressed in dollar terms, that specify how resources will be obtained and used during a specified future period of time (Kristin & Paula, 2021). Budgets are more important to line managers than to the financial staff because budgets provide the means to plan and communicate operational expectations within an organization.

There are five approaches to effective budgeting and forecasting in healthcare (Hall, n.d.). The approaches include;

Aligning rolling forecasts, multi-year plans and detailed budgets

Embracing statistically-driven approaches to enable efficient “what if” modeling

Incorporating service line analytics to refine projections

Providing cross-departmental initiative-based modeling

Promoting the feedback loop with management and executives via reporting

The approach that is most effective is incorporating service line analytics to refine projections. Many organizations are looking to incorporate patient-centric data into their planning models to drive more accurate volume and workload projections. Resulting plans more accurately reflect and offer transparency to the impact a service line’s growth would have on department budgets and net revenue. Incorporating service line analytics to planning is important because they tend to integrate the volume of planning and the revenue planning. This ensures that future reimbursements rate can be modeled by the clinical population.

References

Hall, K., n.d. 5 Approaches to Effective Budgeting and Forecasting in Healthcare | Kaufman Hall. [online] Kaufmanhall.com. Available at:  [Accessed 23 January 2022].

Kristin L. Reiter, & Paula H. Song. (2021). Gapenski’s Healthcare Finance: An Introduction to Accounting and Financial Management, Seventh Edition: Vol. Seventh edition. Health Administration Press.

Peer 2:

In any health organization, budgeting is an imperative consideration in their daily operation and strategic planning. (UMGC, HCAD 640) After reading Kaufman Hall “5 Approaches to Effective Budgeting and Forecasting in Healthcare”, each approach can help manage an organization’s budget effectively. The 5 approaches includes:

  • Align rolling forecasts, multi-year plans, and detailed budgets.
  • Embrace statistically-driven approaches to enable efficient “what-if” modeling.
  • Incorporate Service Line Analytics to refine projections.
  • Provide cross-departmental initiative-based modeling.
  • Promote feedback loop with management and executives via reporting.

I believe the most effective budgeting approach is, “Incorporate Service Line Analytics to refine projections”. Organizations are seeking to incorporate patient-centric data into their planning models to drive more accurate volume and workload projections. (Kaufmanhall, n.d) Incorporating Service Line Analytics can allow organizations to improve and combined the other approaches by using this method. According to Jay Spence, “Service lines are the most comprehensive way to understand operating results, and therefore they should form the basis for strategic planning, capital planning, annual budgeting and forecasting, and performance analyses”. (2015) This approach can result in errors if an organization is not consistent with fully incorporating Service Line Analytics. In order to successfully incorporate Service Line Analytics, a system should be set in place with tools that are necessary to project assumptions and integrate specific plans. As well as a robust data store with significant capabilities for what-if modeling and plan consolidation. (Spence, 2015)

References

KaufmanHall (n.d.) 5 Approaches to Effective Budgeting and Forecasting in Healthcare. https://www.kaufmanhall.com/insights/ebook/5-approaches-effective-budgeting-and-forecasting-healthcare

Spence, J. (2015). New complexities require a new approach to budgeting and forecasting. Retrieved from https://www.healthcarefinancenews.com/blog/new-complexities-require-new-approach-budgeting-and-forecasting

Do you have a similar assignment and would want someone to complete it for you? Click on the ORDER NOW option to get instant services at essayloop.com. We assure you of a well written and plagiarism free papers delivered within your specified deadline.