Back ground
Back ground Johns Hopkins Hospital was established in 1889 it’s a facility of John Hoskins School of medicine. It offers out and in-service medical services. The hospital has an effective finance management. (The Johns Hopkins Hospital official website, 2010). This paper analysis the financial management of the hospital
The goals of the financial leadership of the company
The hospital aims at efficient management of its resources to the benefit of the society. It aims at being accountable to all stake holders who are patients, owners, employees and suppliers.
The main aim of having financial leadership in the hospital is to ensure that money collected by the hospital is well utilized for the good of the company. There are financial targets set to be attained in a certain period of time; to attain this management determined the cost of services and products offered in the hospital. The following are the objectives of financial leadership in the hospital;
- For accountability in all monies collected.
- Keeping good books of record.
- Making accounts which will assist in decision making.
- Gauging the level at which the company is attaining its set targets (Cleverly & Cameron, 2007).
How does the management work toward achieving these goals
The management maintains a finance department which is mandated with the task of ensuring that all financial transitions in the company are well vetted. The department does not work in autonomy but collaborates with other departments. When funds are to be released from the company’s bank account, the company requires at least three signatories from different sections for accountability purposes.
The company has an internal audit/ internal control system which it ensures that there are adequate checks and balances.
What are the unique aspects of the financial strategies used in the organization?
The hospital has a different receipting system; this is where when someone has been treated, the doctor/medical personnel produce an invoice immediately and gives the patient to pay the bill at the cashier’s office.
The cashier collects what the invoice says. Invoice is computer generated and after a generation there is a set of record place in the hospitals accounting package database (the company uses Sun system as its accounting software). In case of those customers who want to use debit card, credit cards, and Visa Cards, the company has a system which accepts this kind of payment.
What are three reasons that the organization has been able to manage its finances effectively?
One, the company has employed a high technology financial management system. This system has checks and balances and records all financial transitions. This has reduced chance of fraud since detecting them is easy.
Second, the company has an effective internal audit/ internal control systems. The set internal control facilitates good financial management. They have developed mechanisms which facilitate an effective use of resources.
Third, the company has a high financial management team; this team assist in making financial decisions (Guy, 1999).
Which aspects of its financial management can the organization improve further?
The company has a policy with some well recognised companies where it treats the organisations employees and demand for money later. Though the system has been a success, there is a problem with the turnover time of payment. The hospital has received payments from these company’s even after four months. This is because of their delay to bill these companies. The resultant is liquidity problems.
The company should adopt an online debt payment system where it can receive payments online and pay for its obligations online. This has not been attained. When such a system is adopted, it will assist the company in making more sound financial decisions and making/receiving real time payments (Fred, 2008).
References
Cleverly, W. O., & Cameron, A. E. (2007). Essentials of health care finance (6th ed.). Sudbury, MA: Jones and Bartlett.
Fred, D. (2008). Strategic Management: Concepts and Cases. New Jersey: Pearson Education.
Guy, T. V. (1999). Readings in financial institution management: modern techniques for a global industry. Australia: Allen & Unwin.
The Johns Hopkins Hospital official website. (2010). Web.