Answer

Reflective Journal: Financial Management in Healthcare

            The purpose of financial measurement in healthcare is to provide finance and accounting information that helps managers in healthcare to accomplish organization goals and objectives. Financial managers in the healthcare industry monitor financial measure including the following (Gilkes, 2018):

• Technical Efficiency

Technical measures influence decisions such as staff-patient ratios. For example, insufficient staffing may lead to nurse overworking and burnout issues.

• Production Efficiency

Production measures influence decisions that will lead to cost-effectiveness of care and services and reduction of the cost of care.

• Allocative Efficiency

 Allocative measures will influence decisions that will lead to realization of increased output benefits at limited input costs. For instance, allocative decisions may influence how to distribute health care staff and other resources across different healthcare departments or clinics. In other words, allocative measures ensure maximization of a value or outputs at a given limited cost.

• Opportunity Cost and Trade-offs

Lastly, the opportunity cost and trade-offs measures can influence healthcare decisions such as creation of partnerships between public and private hospitals, expansion of bed capacities, and creation of branches in other areas (Gilkes, 2018).

            Technical measures and production costs are the most important financial measures in healthcare for ensuring survival of a given health care organization. Effective establishment of staff-patient ratios will create favourable conditions for delivery of safe, high quality, and patient-centred care. Cost-effectiveness of care will ensure effective utilization of available resources for the realization of better outcomes. Both technical and production measures may increase the ability of a healthcare organization to achieve better outcome measures provided by Tinker (2018) such as low hospital mortality rate, improved safety of care, low number of readmissions, better patient experience, effective care, timeliness of care, and effective use of medical resources (Tinker, 2018).