Key Factors Influencing the Provision of Healthcare Services
Financial
Major forces affecting the delivery of healthcare services include financial changes, political regulations, social trends, and technology introduction. The economic aspect is related to the fact that providing quality services requires significant funds, and their cost is constantly growing. Healthcare institutes must invest substantial efforts and resources to maintain financial stability and continue to work to care for patient’s well-being.
Political
At the same time, organizations also need to comply with political regulations, changing the approaches to providing services. For example, introducing The Patient Protection and Affordable Care Act was an influential event that changed the procedure of paying for medical assistance to make it more accessible to the public (Pink & Song, 2019). The influence of external forces contributes to a significant transformation of the health sector.
Social
Social and technological forces significantly affect health care, changing expectations towards services. For example, social trends manifest in changing demographics, particularly population aging, greater prevalence of chronic diseases, and reliance on technology (Schiavone & Ferretti, 2021). As a result, the demand for home and palliative care, preventive measures, digitalization of communication with providers, and similar aspects increases.
Technological
Technological innovations, in turn, empower healthcare organizations and their customers by creating diagnostic and treatment equipment, information-sharing capabilities, and other benefits (Singhal et al., 2022). The identified forces of influence interact to push transformations in health care.
Impact of Forces
Financial
Considering the forces of influence in health care, one can highlight opportunities and challenges for each. For example, in financial terms, organizations can find partners and receive additional funding from private investors (Singhal et al., 2022). At the same time, financial managers must still consider the challenge of high cost and resource constraints and devote a significant part of their work to efficiently allocating funds.
Political
Political regulation, in turn, aims to create opportunities for improvement for health organizations, and managers are faced with planning appropriate changes. However, adapting work processes to changing political requirements is challenging, as it interrupts the established routine (Singhal et al., 2022). Organization managers can significantly impact employees during transformations by supporting them and mitigating transition difficulties.
Social
It is also essential for organizations to pay attention to the opportunities and challenges growing from social and technological trends. In line with the increased demand for palliative and home care, specialists can create new programs and work methods to help their patients (Schiavone & Ferretti, 2021). Investing and allocating resources for such programs, in turn, is a challenge.
Technological
Finally, the introduction of technology into the work of health organizations is also an opportunity to improve the quality of work. Technology improves diagnostic capabilities, supports treatment, and allows critical information to be shared between patients and providers. However, managers still face the challenge of finding resources to use technology, organizing the implementation process, supporting employees, including their training, and similar tasks. While changes in service delivery processes are complicated, they provide significant opportunities for improvement.
Opportunities
Company Goals
The current proposal focuses on Sharecare Inc., which works under the influence of the forces presented and may find new development opportunities. The company works to fulfill its mission to simplify the interaction of providers and patients within the healthcare system and implement the vision of a long and healthy life for the population (“Sharecare Plus,” 2023). To achieve such goals, Sharecare has created a digital platform that connects providers, patients, health plans, and other elements in the healthcare system (“About Sharecare,” 2023). For example, in this way, the company provides health information to patients and connects them with the necessary services.
Company Influences
Given the significant forces of influence, which are the financial changes, demography, technology spread, and political transformations, it is essential to highlight the most significant to Sharecare Inc. This company needs to monitor technological trends since the specifics of its work require the constant use of technologies. Moreover, it is critical to comply with social trends and understand the target audience in order to provide current services. Finally, funding distribution, the search for investors and partners, and effective resource management are necessary for each organization to support its activities. Based on these assumptions, the company should focus on the forces of technology and social trends to blossom.
Company Opportunities
The opportunity for the growth and development of Sharecare Inc. is to expand the customer base. According to the company’s annual report, loss of profit due to excessive concentration on work with several large customers is a significant risk (Sharecare, Inc., 2023). At the same time, Sharecare bases its activities on the use of technology and understands the importance of operating in rapidly changing circumstances (Sharecare, Inc., 2023).
Consequently, the company made a significant contribution of resources to technological development and should pay attention to other factors. The company takes advantage of creating mobile technology and helping users better navigate healthcare. Given social trends, in particular the widespread use of technology by patients, such services should be in demand, and therefore, Sharecare will be able to find more customers and reduce the risks threatening the company’s income.
Proposal
The changes I would like to make for the selected organization are enhancing marketing effects to connect with potential customers. Given demographic changes and the emergence of new social trends, the company needs ongoing research by the target audience to adapt its marketing strategies. After analyzing the results of the study of its Sharecare audience, it is necessary to develop a marketing strategy.
For example, an influential trend is to shift the focus from treatment to prevention (Schiavone & Ferretti, 2021). The company can conduct an appropriate advertising company for the audience that cares for their health and wants to avoid diseases. The services offered by Sharecare are valuable for the health of the population. Therefore, its prosperity benefits the company and can lead to societal changes, improving people’s health.
Financial and Budgetary Considerations
Financial Statements
The balance sheet, cash flow statement, and income statement of Sharecare are financial statements that will provide the necessary information to understand the company’s economic situation and justify the offer to expand marketing activity. The balance sheet includes data on the assets and liabilities of the organization and is, therefore, often used for liquidity and solvency analysis (Schmidt, 2023). This statement is required for the proposal, as the information in it will help determine whether companies have the resources to invest in new projects or expand activities.
Analysis of the income statement is also necessary when implementing changes, as companies provide data on their expenses and income there, which gives an idea of their financial performance (Schmidt, 2023). Finally, studying the cash flow statement in Sharecare helps us understand the features of cash use. Such data is needed to decide whether the organization should find additional investments or whether it can use its resources for new projects.
Proposal Impact
Activity changes affect the company’s financial situation and are therefore reflected in its financial statements. In the event of an increase in marketing activity, the company’s expenses should increase, which will be presented in the expense section. At the same time, if the measures taken are successful, the company will attract more customers and impact its revenues by increasing net income in the income statement. Moreover, a successful marketing company that will attract new customers will also change the levels of capital and assets presented in the balance sheet. The information from the cash flow statement, in turn, will reflect whether investments were received for the project or whether the company used its resources.
Flexed Versus Fixed
The company’s flexible approach to budgeting is a more convenient option for implementing changes in marketing activity. This approach allows organizations to adjust and change the budget depending on the current situation, improving planning adaptability and accuracy (Gragg, 2018). Unlike the flexible approach, a fixed budget can be based on outdated data and cannot be changed since all planned expenses are fixed. With a fixed budget, Sharecare will not be able to implement changes in marketing activities as soon as necessary since it will be required to plan the corresponding costs. The flexible budget, in turn, will simplify changes through amendments to the budget.
Proposal Justification
Ratio Selection
Current Ratio, Return on Assets (ROA), and Return on Investment (ROI) support the current proposal to expand the company’s marketing activities. Attention to the Current Ratio is justified by the need to understand the present situation in the company. This indicator reports the ratio between the company’s liabilities and assets and assesses whether it can allocate additional project resources (Girardin, 2023).
The ROA assessment concentrates on the company’s profitability and helps evaluate how well it can use its resources. Considering the ROA before and after the changes will allow the company to consider how much marketing has affected the organization’s financial performance. The ROI coefficient is necessary to assess whether the funds invested in the project have paid off with its profitability (“ROA vs. ROI,” n.d.). It can be measured in the period after the expansion of marketing activities.
Ratio Results
The calculations are as follows:
- Current Ratio = Current Assets / Current Liabilities
- “Sharecare, Inc.” (2023) assets are $701,001, and liabilities are $701,001.
- Current Ratio = $701,001 / $701,001=1
- The company can pay over its liabilities, but opportunities for additional projects are limited.
- ROA = Net Income / Average Total Assets
- “Sharecare, Inc.” (2023) net income is $118,707 and assets are $701,001.
- ROA = $118,707 / $701,001 = 0.1695 or 16.95%
- ROA above 5% is usually considered a good result, indicating the company’s success (“ROA vs. ROI,” n.d.).
- ROI = Cost of Investment / Net Return on Investment * 100
- The ROI should be analyzed after transformations and its first results over a certain amount of time.
Short- and Long-Term Impact
Considering the results of the calculations, one may assume that in the short term, Sharecare will need additional investments to expand marketing and increase expenses for this purpose. However, improving marketing activities will help attract new customers and increase their profits in the long term. Risks accompany any changes, and to mitigate the impact on the financial state, it is necessary to constantly monitor the changes and their implications through analysis and calculations.
Moreover, when expanding marketing, it is crucial for a company not to invest resources in only one activity direction but to diversify expenses. The need for monitoring and potential changes the project may bring must be considered in long-term and short-term activity planning. The company needs to organize appropriate teams of employees and plan their actions in marketing and financial work.
Closing Statement/Conclusion
Added Value
The proposal to expand the organization’s marketing activities has value for Sharecare in the context of current trends in healthcare. The value is justified by attracting more customers through marketing, increasing the organization’s profit. Given the trend of more widespread use of technology, the digital company can reach more customers and adapt to the rapidly changing working conditions. Moreover, the proposal is consistent with social trends, as expanding the customer base means providing opportunities to take care of health and prevent chronic diseases for more people.
Futhermore, the company’s activities meet the current trends of personalized care and the application of technologies for the quality of services. Thus, the proposal’s value is that it benefits from the company’s characteristics and modern trends in health care. Therefore, the company can improve its performance and contribute to the population’s well-being by implementing changes.
Justification of Proposal
Given the calculations and analysis done, it can be assumed that the marketing expansion proposal is appropriate for Sharecare. In particular, although the Current Ratio indicates that opportunities for new projects are limited, it also demonstrates that the company can cover its liabilities, which means its financial stability. Therefore, allocating resources for such strategic initiatives as marketing expansion is possible. The ROA of 16.95% proves that the company uses its assets well and makes a profit.
Finally, monitoring changes with additional calculations such as ROI can be part of financial planning. In case of failure, the company can amend its project or stop its implementation. Given the value changes can bring to the company and Sharecare’s services to the public, the proposal should be considered for implementation.
References
About Sharecare. (2023). Sharecare, Inc. Web.
Girardin, M. (2023). What is the current ratio? Formula and definition. The Forage. Web.
Gragg, J. (2018). The next generation of budgeting for healthcare. Healthcare Financial Management Association. Web.
Pink, G. H., & Song, P. H. (2019). Gapenski’s understanding healthcare financial management (8th ed.). Health Administration Press.
ROA vs. ROI. (n.d.). Gini Technology Co. Web.
Schiavone, F., & Ferretti, M. (2021). The FutureS of healthcare. Futures, 134, 1-7. Web.
Schmidt, J. (2023). Three financial statements. Corporate Finance Institute. Web.
Sharecare Plus. (2023). Sharecare, Inc. Web.
Sharecare, Inc.: Form 10-K. (2023). U.S. Securities and Exchange Commission. Web.
Singhal, S., Radha, M., & Vinjamoori, N. (2022). The next frontier of care delivery in healthcare. McKinsey & Company. Web.
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