1. How is the current economic environment affecting hospitals?
According to the article, “The Economic Downturn and Its Impact on Hospitals”, the current economic environment is affecting hospitals and other heath care facilities in a number of ways. The most common issue relates to inability of the hospitals to obtain and secure relevant financing that enables health institutions to meet their daily obligations. Since most payments in hospitals lags behind the amount expected to deliver health care, most of the times hospitals are forced to borrow funds from financial institutions to meet their operating expenses. With this issue of economic downturn, borrowing funds from financial institutions has become very difficult, and the little loans obtained have become very expensive to repay (TREADWATCH, 2009).
Another effect include the problem of increased number of patients under the government Medicaid program, the uninsured, and the underinsured .The crisis made many people lose their jobs hence limiting the amount of money payable to medical insurance companies, which on the other hand reduce the amount payable to the hospitals. Another effect includes loss of jobs to both health specialists and low cadre staff, which has been attributed to increased uncertainty of when the current situation will improve (Jimmy, 2000). Many opponents of the recession claim that many health practitioners in the end might quit their medical practices rather than agree to receive reduced reimbursements from the government Medicare programs.
2. What changes in goals and strategy are hospitals likely to employ in the current environment?
Given the effects and seriousness of this situation, hospitals need to be very conventional in the way they operate, in order to maintain their niche and dual function has affordable health care providers, and health sector economic engine. Hospitals need to analyze their services and health programs, and only engage in activities which are beneficial and cost effective to them, taking into consideration the wellbeing of the patients (TREADWATCH, 2009).
The current Hospitals goals should be changed to focus on making health care affordable to all, by categorically making their patients to adopt government insurance programs, which are more stable and with fewer risks of problems associated with economic down turn. Hospitals should also adopt effective management systems, which would make them more competent in managing their debts and cash. The health care institutions should establish other money generating programs in order to reduce their over dependence on loans from banks.
Health is something important for a given nation, and the entire globe for that matter. This means that it would be necessary that a proper method for financing healthcare be formulated towards ensuring there is a proper health structure. This is the main reason why innovative finance comes in as a very good approach towards...