In a minimum of 150 words, discuss the two following questions:
1. Identify, and discuss, three financial aspects to consider for the initial budgeting plan?
2. How could one of the CMS value-based initiatives impact the budget?
Every successful business requires an efficient budget to guide its operations. In regards to the case study provided, as one of the financial managers, I will consider the following financial aspect during the initial budget plan. First, consider estimation in regards to the income of the business. It is important to identify what the business will make during the initial budget preparation (Gitman, Juchau & Flanagan, 2015). Second, consider the possible expense of the business. Information about the expense of the business will include the number of staffs to hire to deliver value. Third, I will also consider possible spending habits by evaluating the previous accounting information of healthcare. The last information accounting will give us the ability to understand the background of major spending areas. With this in mind, the initial budgeting process will be effective.
One of the CMC initiatives is accountable care organization (ACO). The ACO enables healthcare providers to benefit financially since they generate efficiencies by offering providers a way to stand fee cuts while offering better and improve quality care for their patients. In addition, the ACOs generates savings over time by allowing payers to create a successful payment strategy (Barnes et al., 2014). The beneficiaries achieve merits from the ACOs in the form of reduced premiums and advance the quality of care to the patients. Despite the challenges that might come along with the program, it is an effective strategy to lower spending. The program provides an appealing conceptual way to give providers control over spending. In regards to this, the program will lower the budget by reducing cash outflow for healthcare. Therefore, healthcare will be able to provide quality services with reduced spending.
Barnes, A. J., Unruh, L., Chukmaitov, A., & van Ginneken, E. (2014). Accountable care organizations in the USA: types, developments, and challenges. Health Policy, 118(1), 1-7.
Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson Higher Education AU.