In the current competitive environment, creating constructive strategies for enhancing the effectiveness of financial reporting practices of health care organizations is of critical significance. It is the path that contemporary health care professionals should take and achieve substantial growth. Efficient reporting strategies incorporate various elements of fiscal management and accounting principles and financial ethical standards.
One of the most essential elements of financial management is fiscal planning. The planning ensures that sufficient resources are available at the appropriate times to solve needs of the health organizations. These needs include long-term requirements, costly technical equipment, and short-term needs, such as employees’ payment and upgrading equipment. The next element is fiscal control. It enables organizations to meet their goals. Fiscal control evaluates the security of organizational assets, efficiency of the management and productivity of the assets (Financial management, n. d.).
The other elements are directing and organizing, which ensure that organization brings together human, financial, and physical resources and develop a positive relationship among the resources. This process entails delegation of authorities, identification of activities and coordination of responsibility relationships. The final element is fiscal decision-making. It helps develop a relationship among financing tools, investment, and dividends. In addition, it helps the management determine the most appropriate means of distributing profits (Financial management, n.d.).
Health care centers also incorporate accounting principles and general financial ethical standards in their management plans. Doctors and nurses abide by ethical standards that regulate the purchase of drugs and other health care related items. One of the key ethical standards that health care finance professionals uphold to achieve their objectives is competence. According to Morley (2013), to be competent, the professionals need to acquire quality formal education and continue learning by taking part in forums that equip them with new information that can have impact on their career. In addition, they need to be aware of changes in the accounting principles. Among other things, they must display integrity and be honest.
Additionally, accountants and financial experts must maintain objectivity. They need to be objective and avoid conflicts of interest to achieve institutional and individual goals. They must not work for their relatives, as most people have some significant interest in their relatives’ organizations. All associations of financial professionals discourage engaging in dishonest practices irrespective of the type of connections that may exist between the expert and the employer. The associations hold that practices such as manipulating records to enhance a firm’s reputation and perceived financial performance are against the accounting standards (Governance, n. d).
Another general accounting principle is confidentiality. Financial professionals have access to their employees’ vital and sensitive financial and personal information. Accounting principles and ethical standards oblige accountants to keep such pieces of information private with the exception of when a court of law orders for disclosure. Apart from keeping the data private, all associations for accountants and financial professionals require the professionals not to use the information to gain undue advantages.
Notably, Health Net has codes of conduct that comply with the standards. It has adopted a ‘report a potential violation policy’. The policy assures that the organization maintains a high level of transparency, objectivity and competence. According to credible information on the organization’s official website, the code ensures that nobody misuses its resources and no one suffers for reporting violation. Workers in the organization have the freedom to discuss with their supervisors matters relating to the violation of their code. Anyone who thinks a director of the company has violated the code has the option of reporting to the Chief Ethics officer or the Legal Department. The codes enable the managers to understand their roles and responsibilities, which ultimately leads to keeping of accurate and verifiable accounting records. The policy also requires people who have information regarding poor management of accounting and auditing activities to report the issues to the Audit Committee (Governance, n. d).
Health Net also requires its employees to avoid conflicts of interest. The company says that those who engage in activities such as working for its competitor, benefiting unduly from the information they have acquired in the course of work, or have a financial interest in other similar health care venture, should not continue working for the company. This policy ensures that stakeholders of the company keep ethical standards and safeguard the interests of the company.
Additionally, the organization has an anti-money laundering policy. The company has put measures in place to detect fraud and prevent its officers from using illegal means to make money. It requires its customers and staff to report officers that use transaction structures that lack commercial justification to the Legal Department.
Apart from Health Net, the National Association for Health Care Quality upholds similar ethical principles. The organization requires healthcare professionals to possess skills in health care information fundamentals such as reporting, computer use and statistical processes (NAHQ code of ethics and standards of practice, 2011). The ethical standards make the professionals competent. The standards also enhance reporting strategies of health centers and other institutions that adopt them.
References
Corporate governance. (n.d). Health.net. Web.
Financial management. (n.d.). Reaady Ratios: Financial Analysis and Accounting Book of Reference.
Morley, M. (2013). Accounting principles & general financial ethical standards. Small business.
NAHQ code of ethics and standards of practice. (2011). NAHQ.org. Web.