Budget Cutting in a Health Care Organization

Budget Cutting in a Health Care Organization

As a manager of health care organization focusing on reducing 5% of the organization spending, I will first focus on reducing the overhead costs and administrative costs. I will focus more on embedded overhead in departments where the number of administrative staffs are much higher than required, and mostly in areas where the revenue generated is not comparable to the cost for instance in radiology department (Kalman et al., 2015). This cost cut will focus on eliminating excessive staff to remain with enough to handle the unit operations effectively.  I will also focus on lowering shadow staffing overhead, which will involves workers performing similar administrative activities in a decentralized system. I will consider centralizing the organization’s administrative system to eliminate shadow staffing who creates redundancy.  Automation will be done in most of administrative activities to ensure that most of the administrative operationsthat include accounting and billing among other activities are efficiently and accurately handled by a few personnel.The main cost cutting activities will include centralizing the administrative, non-differentiating operations that include procurement, human resources management, finance and marketing.  Automation will also be done on the most tedious administrative functions, and outsourcing some of the needed services such as IT services to reduce on employment costs (Kalman et al., 2015). Overhead administrative costs are the best to be reduced since they always offer a more affordable alternative such as automation, centralization and outsourcing which cannot be achieved in patient care units. The operations can even be more effectively done with the slight change of system or structure, to adopt a more cost saving alternatives. Although administrative functions are important in enhancing patient’s well-being, their effective restructuring are less likely to impact healthcare operations negatively and hence they are manageable.

How The Budget Cuts will Impact Patient-Centered Care

The strategy to be employed to reduce administrative overhead cost such as automation is likely to improve the patient-centered care in a health care organization. Automation enhance effective storage of patient data that include medical history, diagnosis, prescription, patient progress, medical reactions, and billing among other things. This implies that it is easy for any medical professional handling the patient to access all this information by use of patient identification number and hence, making it easy to handle the case. With this information, a medical professional can easily define the best individualized care and treatment needed. Automation also increases the level of patient data accuracy and easiness obtaining patient information (Snyder et al., 2011). The main negative impact is that the adopted method of cost cutting is likely to bring a hug structural and system changes that may create certain level of confusion and denial among the remaining workers, especially medical professions who depend on the provided administrative services to enhance their work efficiency. Time will thus be needed to ensure that everybody is used to the new system and operation structure. This period may negatively affect the patient-centered care.

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