How do health administrators maintain the financial wellbeing of medical organizations?

HomeArticlesHow do health administrators maintain the financial wellbeing of medical organizations?


Health administrators are trained professionals who are employed to manage the day-to-day operations of a clinic, hospital or other large medical facility. Although they do not tend to interact with patients regularly, an administrator shapes the experience and care that the people who visit the hospital will receive. This is done through designing and implementing policies and procedures, as well as by attempting to lower the cost of care for the hospital and its patients. They are constantly seeking to improve the way that healthcare is delivered in a hospital, and overseeing the organization’s financial health is key to this.

Their key financial responsibilities include preparing reports and monitoring the budgets of various departments, tracking the movement of medical and office supplies, and maintaining staff and patient records. To ensure that staff shortages do not impact patient care, they create work schedules for employees and coordinate with health professionals to tackle any issues that arise. As part of their work, health administrators ensure that the facility is compliant with any relevant regulations or state laws so that they don’t risk being fined.

What are the personal qualities of a good health administrator?

Health administrators usually work as part of a team, but they tend to lead that team and therefore have to be self-motivated. Every day, they encounter and solve a range of issues, so they need to be creative and critical thinkers with excellent problem-solving skills. They feel the support of their team, but also need to be excellent managers. This ensures that everyone feels inspired and capable when it comes to building a better medical center. People who would relish the challenge of this role and enjoy a vibrant working environment can enroll on the University of Ottawa’s Executive Master of Health Administration online Canada. Delivered by the university’s Telfer School of Management, the course is ideal for working professionals who hope to graduate within two years.

Which facilities do health administrators oversee?

Health administrators are employed in the offices of medical laboratories, private physician’s practices, local clinics and hospitals. The scope of their financial work extends to liaising with government agencies, insurance companies and pharmaceutical companies. To drive the success of their organization, they have to keep extremely accurate financial records and ensure that budgets are adhered to once they have been signed off and finalized. Nevertheless, however meticulous a health administrator is in their work, they will inevitably face economic challenges throughout their career. These can make it difficult for patients to access the care they need, and also for the facility to meet its financial obligations. Therefore, to maintain a healthy, functioning facility with happy staff and patients, health administrators need to use a range of strategies.

Develop a budget for operations management

Good operations management is key to the smooth running of any large facility, and hospitals are no different. For a health administrator, taking care of this side of things involves completing tasks that are designed to maintain a solid organizational structure. They develop an overarching budget that takes into account the smaller budgets allocated to different floors or units in the building. In doing so, they consider the way that healthcare management is run in other facilities and what organizational practices have been a success. They will factor in the provision of technology updates, supply chain issues and the performance of outsourced services.

Write guidelines for staff

It often falls to staff to discuss health insurance with patients, and when things go wrong with this source of funding, the impact can be significant. Therefore, in order to keep the building’s finances under control, the health administrator advises staff on checking the insurance eligibility of patients before their care plan is established. This ensures that the information they work with is up to date and gets the best possible outcome for patients. If they find that a specific treatment is not covered by their policy, there may be an equally helpful alternative that is, or they might choose to enroll with Medicaid to have their expenses taken care of. This also means that patients are not shocked by a hefty bill at an already distressing time in their life.

Manage the hospital’s records carefully

Although there are reams of medical and staff records to manage, even a minor incorrect detail can leave the hospital paying out for unnecessary products or services. For example, medical equipment that is being hired from a supplier, or that is being insured, should be actively used. When equipment is no longer needed, it makes no financial sense to keep it in the hospital and it should be removed. Records that monitor the usage of medical apparatus are therefore crucial in saving the organization money.

Trying to boost staff satisfaction levels

Staff who are satisfied in their role will perform well, and this will be evident in patient feedback. Happy patients who are impressed with the level of care they received will come back, but moreover, they will tell their friends, who might also choose to receive care at that facility. As well as maintaining a steady flow of patients, boosting staff morale means that people remain in the same job for longer. This means that the facility spends less money on the recruitment and training of new team members. If there are problems, conflicts or any other underlying issues that affect employees, health administrators will seek immediate and effective solutions.

Make it easy for patients to clear their invoices

Healthcare centers and hospitals need to adopt the same approach to payment methods as any other business – they need to offer variety. Health administrators ensure that they have the facilities for patients to clear an invoice in a way that suits them, whether they prefer to pay by cash, credit card or debit card. This can avoid unnecessary delays caused when a patient does not have an accepted method, despite having access to the required funds. Moreover, given the choice, a patient will always go to a hospital that accepts their preferred payment option. Therefore, a health administrator will ensure that the organization’s literature includes information on payment methods.

Being a patient advocate

Nurses are considered the most prominent advocate for patients in a hospital, but in some cases, health administrators can also play this role. With their knowledge of the law and financial regulations, they can assist patients who have been caught off guard because their insurer has unexpectedly declined to cover their treatment. An administrator can advocate for the patient in a negotiation with the insurer. This can help to prevent a bill from going unpaid for a lengthy period and ensures that the patient gets the care they need.

Work with outside agencies and non-profits

Occasionally, the insurance provider will not budge and there is no recourse for a worried patient who cannot fund their care. In these instances, health administrators can use their contacts to find an organization that would help. Furthermore, they can ask partners in the medical industry or charitable organizations to offer educational services. By distributing pamphlets or giving talks, they might encourage patients to learn more about their condition and how to manage it independently. Collaborations of this sort allow medical centers to fill gaps in patient care without taking on the sole responsibility for doing so.

Ensure that outstanding balances are dealt with

Smooth cash flow is what governs the financial health of any organization. For the hospital to operate optimally, there should be available funds. Frequently, it is the unpaid fees of patients that result in a limited income. As well as encouraging patients to keep their policies paid up, health administrators can also give patients achievable ways of clearing their debt.

Create payment plans that suit each patient

Faced with a sizable debt, most patients are often stressed and concerned about how to manage the problem. Nobody should avoid getting the care they need because of financial constraints, but on the other hand, not everyone has insurance cover or the money upfront to clear their debt. To manage this issue, health administrators can set up a payment schedule that gives people flexibility. This takes the financial strain away from a patient and ensures that the facility has a constant income. The administrator can discuss this in advance with patients where appropriate so that they are prepared. Then, once a schedule has been agreed upon, they can send email reminders and have an online payment system set up so that the patient has a financial record of their own.

Maintaining effective data collection procedures

In most medical facilities, patient outcomes are measured through questionnaires after their course of treatment has ended. This gives everyone who comes into contact with patients the chance to see the bigger picture. The information is collected and processed by software that can highlight areas of concern where better delivery of care is needed. Tracking care outcomes in this way enhances the patient’s experience, and also allows the hospital to identify areas of waste and where savings could be made. Even basic customer satisfaction surveys give an insight into what the hospital looks like from another perspective, and health administrators can use this information to develop new, more efficient procedures.

Minimizing the number of readmissions

Researchers have found that “nearly 20% of all Medicare discharges had a readmission within 30 days”. This figure represents a huge annual cost for hospitals, but there are many ways to avoid the problem. Once again, data can assist health administrators when it comes to establishing the type of conditions that often result in a readmission. They can then focus their attention on the causes of the problem. Frequently, it is a lack of information or misunderstanding that forces a patient to return because their health is worsening.

Therefore, a health administrator might work in collaboration with frontline staff to establish more thorough discharge protocols. These could include thoroughly briefing the patient and their caregiver, setting up the appropriate prescription, and ensuring that the person leaves with any medication they will immediately need. An effective strategy for reducing admissions is not just about saving money – it also improves patient outcomes and their experience.

Cutting costs without compromising on the quality of care provided

There are ways to maintain the same level of care but to cut the facility’s spending. From waste disposal to property maintenance and supplies, some expenses cannot be avoided, but they can be reduced. Health administrators could prompt nurses and physicians to maintain thorough patient records, as this ensures that tests are not duplicated. Furthermore, they could look into the potential of technologies such as telehealth to reduce waiting lists. They might also consider energy-efficient practices, such as reducing lights in areas where they are not needed or changing fixtures that use multiple lights. A proactive health administrator will seek out solutions such as these and many more, and then regularly review their progress to ensure that the organization is benefiting.

Negotiate with vendors to get a better deal for the facility

Medical facilities need vendors to supply their surgical instruments, cleaning requirements and software. A range of essential tools and services is paid for each month, and to avoid ever-increasing invoices, health administrators need excellent negotiation skills. This helps them to build a good foundation with the vendor and explain the issue from their perspective, while remaining positive. Before a meeting, administrators will carry out some research into a vendor’s competitors and their pricing to ensure that they are prepared. That way, they can request a lower rate for specific items or services, and they can ask the supplier about discounts or more favorable terms.

Patient welfare is linked to the financial health of a medical center

A health administrator’s role centers on managing resources, lowering financial risks and ensuring that the facility remains within budget. Their well-organized planning means that funds are available as required and that compliance with healthcare regulations and law is adhered to. As a result of excellent health administration, an organization can thrive financially and provide care to any patient who needs it.

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