Good Creative Writing On Financial Management In Healthcare

Discussion

1. The household budget is a monthly activity that takes place at home. The process follows a predictable pattern. The money that comes in to the bank is the amount with which the household is to be run, including savings if any. To begin with the fixed costs of mortgage and school fees are paid. After that, expenditures towards groceries, stationery, food as required for sustenance for the month is catered for. Entertainment comes at Priority 3. If money is left over, it goes into savings.
As the budget is limited, most of the time there has to be a decision between two alternatives. For instance, the family has to decide whether it should go for a movie or put down the money towards savings for college education of the elder child. Once either of the options is taken, the option that is left out represents the opportunity cost. Thus, if the family opts for the movie, the opportunity cost of adding to the college education corpus is incurred. If the family opts to save, then the opportunity cost of family harmony as could accrue from a movie together would be incurred.
The value of budgeting is evident as the budgeting exercise instills fiscal discipline in the family and initiates robust debate about what options to be taken for expenditure during the month. The budgeting process forces the family to prioritize its expenditures and cut out the optional in favor of the essential. For instance, in the family budget, priority is given to entertainment over savings at this point of time. This is because this is the last year the entire family is together. Next year, the family would be split in three parts, with the elder son going off to college and the head of the family in another location for work. Therefore, it has been decided that family time out together is more important this year than savings. This prioritization would not have been possible if the budgeting exercise were not done.
There is a pattern of boom and bust in the domestic budget over the financial year. In the beginning of every quarter, school fees have to be paid. In these times, there is a financial crunch. In June every year, the head of the family gets a bonus. Thus, during June, there is surplus cash that can be used for savings or big expenditures. Thus, the financial cycle of the household is built around major expenditures and incomes. The same analogy can be extended for organizations, where financial cycles indicate periods of expansion and recession.
2. Capital costs are fixed, one time costs needed to bring an organization to commercially viable status. In terms of a healthcare organization, the capital costs are costs that would go towards land, buildings and construction and would bring the healthcare organization into existence. Thus, capital costs are essential for the healthcare organization to commence operations.
Capital expenditures are divided into expenditures incurred to buy new equipment and expenditure to upgrade the life of existing equipment or buildings. In the context of a healthcare organization, if a new X-Ray machine is procured, it is a capital expenditure towards new equipment. However, if an existing X-Ray machine is overhauled to be effective for the next five years, the incurred expenditure would qualify as capital expenditure for upgradation of equipment. The same analogy could be applied to buildings and other assets of the healthcare organization.