Management Goals of the Capital Purchase - Research Paper Example

? Capital Project Capital Project Introduction Like any other firm, health care organizations periodically perform capital purchases so as to improve the quality of care and patient safety. Although such purchases may cause the organization to incur additional costs, they may benefit the organization in the long run. In the case of a health care organization, a capital purchase has a range of management as well as organizational goals. Furthermore, it is expected that a capital purchase would improve an organization’s economic environment as it is likely to reduce manual efforts and improve overall operational efficiency. With every capital purchase, an organization aims to meet a set of organizational needs. A capital purchase would not benefit an organization unless it contributes to the organization’s productivity or overall performance efficacy. This paper will discuss a software purchase a healthcare organization made for filing patient records properly. The paper will give particular focus on managerial, organizational, and economic benefits of this capital purchase. Capital purchase To define, “a capital purchase is defined as any purchase of $1000 and over” (Novak, 1996, p.335). Capital purchases are considered as long term assets of an organization. Generally, capital purchases are viewed as capital investments, capital assets, or capital acquisitions. The process of capital acquisition can benefit a healthcare organization in a number of ways. In the view of Gitman and McDaniel (2008, p.434), capital acquisitions add to an organization’s asset strength, which in turn contributes to the firm’s value chain efficiency and service efficiency. In the case of healthcare organizations like hospitals, a capital purchase is mainly intended to improve the quality of care delivery and thereby promoting patient safety. Undoubtedly, capital acquisitions provide an organization with a number of competencies that are helpful to obtain an edge over other market players. In many cases, capital purchase is a legal as well as an ethical obligation of healthcare administrations as better patient health is the primary goal of every healthcare. Researchers argue that proper capital acquisition in patient care is a better approach to improve a region’s life expectancy. The planned software purchase for filing patient records costs more than $5,000, and therefore, it is a capital purchase. This capital acquisition may assist the healthcare environment to deliver improved patient care services at affordable costs. Management goals of the purchase This capital acquisition would support many management goals including revenue growth, operational efficiency improvement, improved productivity, quality assurance, performance evaluation, reduced employee hiring and training costs. Loretz (2005) says that filing patient records manually is a difficult task because a large number of patients visit a healthcare institution every day. Hence, a healthcare institution needs to employ a large workforce to manage patient records appropriately. Evidently, an organization is forced to spend huge amounts on employee hiring and training in order to file patient records manually (p.2). This situation would probably reduce the firm’s profitability. However, computerized patient records handling system would assist a healthcare environment to manage patient data effectively and inexpensively. A software-based patient information filing system is beneficial for the organization to minimize the level of employee hiring because such a program may be capable of handling patient data more accurately and quickly. Even though this purchase may cost huge money initially, this acquisition would benefit the organization to trim down employee hiring and training expenses in the long term. Consequently, this may aid the firm to reduce its operating expenses and thereby improve profitability. As we discussed earlier, a software-based program can more quickly and accurately manage patient information; hence, it assists the organization to increase productivity. Improved productivity is a major objective of any organization as this condition contributes to revenue growth. Unlike manual patient record handling system, chances of errors are minimal when patient information are filed using well-developed software. Hence, this capital asset would greatly benefit the healthcare environment to promote quality assurance. In the opinion of Lima (1998), it may take a long time to find a previous patient record if patient information are filed manually and this situation would cause delay in care delivery. In contrast, it is possible to get any older patient record with just a mouse click if the organization has well-designed and customized software (p.6). Therefore, the identified capital purchase will certainly contribute to the organization’s operational efficiency improvement. Performance evaluation is another important goal of healthcare managements. When patient records are filed using improved software, it is easy to evaluate the performance of the patient record keeping system. If the healthcare management finds that the acquired software underperforms or fails to meet some of its objectives, they can easily make necessary changes to the software. Similarly, the software-based patient record filing system would assist the healthcare management to effectively deal with its fundamental management functions including planning, organizing, communicating, and decision making. This capital acquisition may aid the management to determine adequate level of human capital and other resources essential to deliver effective patient care services. In addition, the software would benefit the healthcare administration to better organize various managerial activities such as distribution of job tasks among employees. Effective communication across various management levels is necessary for a healthcare organization to deliver improved patient services. Evidently, a software-based record keeping system may be better to effectively connect different areas of patient care management. Finally, this asset purchase may benefit the organization to make decisions immediately because the software is able to provide required information without any time delay. Economic benefits The stated capital acquisition would enhance the organization’s economic environment in a number of ways. Primarily, a healthcare organization can continue its operations with less number of employees if it maintains good software for filing patient records. Hence, this item greatly assists the organization to cut down employee expenses to a large extent. In addition, this software is helpful for the organization to store huge volume of patient data using minimum space. If the organization maintains patient information manually, it needs to find extensive physical storage facilities to keep records. Naturally, the organization has to set aside huge amount of money to maintain such physical facilities (National Research Council, 1997, p.26). In short, this capital asset would benefit the healthcare institution to minimize the physical space needed to store data and thereby reduce operating costs. As this software greatly promotes speed and accuracy, the organization can better serve its clients’ needs. In this way, the organization can easily attract clients and this situation would improve the economic performance of the healthcare environment. Decision making and strategy implementation are complex, expensive, and time consuming tasks for any organizational management. Speed and accuracy in patient data management may assist the organization to easily collect information whenever it needs and thereby promote immediate decision making. Often, fast decision making is necessary for healthcare organizations to take advantage of emerging favorable situations, and hence contribute to profit maximization. Similarly, strategy implementation is a key management process, which is capable of determining future performance of an organization. Hill and Jones (2009, p.20) argue that a strategy implementation will be economic and effective only if it is planned and executed well within the stipulated time period. In order to effectively plan a strategy, the organization has to conduct a needs and requirements analysis and obtain extensive data and information about the particular area of concern. Under a manual patient record keeping system, the healthcare organization may face difficulties in accumulating required patient data and information as there are copious amounts of files to be checked manually. However, the software based system would aid the organization to instantly collect historical patient records that are necessary to plan the strategy development effectively. Probably, such a systematic process may benefit the healthcare institution to restrict implementation costs to the planned budget and complete the strategy execution within the predicted timeframe. Thus, the capital acquisition is helpful in effectively dealing with strategy execution and thereby taking advantage of the desired economic outcomes. The software for filing patient records can be used for a long time by timely updating it. Hence, the organization does not incur huge additional costs once the software is installed. As a result, this capital asset is greatly beneficial for the organization to cut down its operating costs in the long term. In addition, top level management does not need to pay much attention to patient records handling system if the organization possesses well developed software for doing so. Therefore, top executives can focus more on other economically productive activities and thereby contribute to the organization’s long term sustainability. Organizational goals of the purchase In addition to meeting management goals and enhancing economic environment of the healthcare organization, this capital acquisition is useful to achieve several organizational goals. The major organizational goals this capital purchase would support include patient care, medical and allied health education, community service, cost containment, leadership role, and clinical research. Patient care is the most important objective of any healthcare department regardless of its nature and size. “The ultimate goals of health management are (1) disease prevention, (2) reduction of infectious disease incidence, and (3) reduction of disease severity when it occurs” (Plumb & Hanson, 2010, p. 1). Better evaluation of past patient records is an effective way to enhance disease prevention and minimize infectious disease incidence. Based on such evaluations, the health care management can form potential healthcare policies to curb the impacts of the spread of infectious diseases. In addition, previous patient records assessment may also assist the health management to develop effective care plans that would reduce the severity of diseases. As we discussed earlier, a software-based file keeping system would enhance immediate decision making, which is a key to effective patient care. To illustrate, a physician can quickly diagnose his/her client’s disease if he/she has immediate access to the client’s previous case records. Under such a situation, the physician can immediately intervene in the patient’s disease progression. This may prevent the disease from worsening and the patient from incurring unnecessary costs. To be more specific, this capital acquisition would contribute to the accomplishment of patient care. Similarly, this software would greatly benefit the health care management to promote medical and allied health education. As we mentioned above, the software is very helpful to evaluate historical patient records and thereby identify common disease-causing factors and prevention approaches. This information is beneficial for the management to educate nurses and other caregivers about proper care plans that are needed to reduce the prevalence of infectious diseases and similar medical conditions. In addition, such information may be useful for the healthcare authorities also to enlighten general public on common disease-causing situations and disease prevention methods. Through such community services, healthcare authorities can significantly improve overall health status of a region. Furthermore, this type of services would assist healthcare professionals to keep its beneficiaries (general public) aware of the significance of disease prevention. Undoubtedly, better disease prevention practices would help people reduce their healthcare costs to a great extent. Hence, this capital purchase noticeably contributes to health cost containment. Another benefit of this software is that it may aid the health institutions/professionals to perform their leadership role efficiently. For instance, since healthcare professionals can better access historical patient data using this software, they can provide people with timely suggestions regarding healthy life practices. The most fascinating benefit of this capital acquisition is that it would be helpful for the organization to conduct clinical researches. As this software has the capacity to manage huge volume of historical patient data effectively, the healthcare management can easily analyze prevalence rate of various diseases, seasonal diseases, and possible risk factors. In addition, it is possible to research the influence of factors such as gender, age, ethnicity, and geography on a particular disease using the patient records. Based on such information, healthcare researchers can develop more improved medications and treatment methods for various life threatening diseases. How does it satisfy organizational needs? As per expert’s suggestion, “the greatest challenge in the new world of integrated healthcare delivery is to provide comprehensive, reliable, relevant, accessible, and timely patient information to each member of the healthcare team, whether in primary or secondary care and whether a doctor, nurse and allied health professional” (Mani, 2012). He adds that technology has a key role to play in managing healthcare data effectively. Undoubtedly, efficiency is the major benefit of this capital purchase because this software facilitates storing and sharing of huge volume of patient records. Generally, organizations including healthcare facilities specifically focus on client satisfaction, which in turn can be achieved by better client services. An individual gets faster and safer care if his previous records are kept with the hospital. Usually, patient records include blood group, prescription drugs, and his/her existing medical conditions. Such information is of great help to healthcare environments in delivering immediate care in emergency situations and facilitating emergency decision making process. Tragic events like hurricanes and 9/11 showed the fruitfulness of electronic medical records. Under such situations, patients with electronic medical records were more easily treated than those without previous medical records. This software would greatly assist the health management to maintain electronic medical records of patients. Relative to conventional patient record keeping systems, these electronic medical records are more powerful because they are easy to access and less likely to lose. As it is possible to easily share electronically recorded patient data, calamities like floods, earthquakes, or terrorist attacks cannot easily destroy patient records. Using this software, the healthcare management can offer more improved services to its clients. To illustrate, the organization may share its electronically stored patient files with other healthcare facilities. Therefore, an individual’s previous case files can be accessed from any part of the country and hence the patient may obtain better care and treatment. Often, patients forget to reveal some piece of health information including previous surgeries and drug intakes to their doctor and this situation would adversely affect disease diagnosis and treatment decisions, and ultimately patient safety. However, a doctor can easily obtain comprehensive patient information by simply asking the patient’s name, birth date, and place if he/she has access to electronic medical records. Another important benefit of this capital asset is that it would be helpful to save time at the physician’s office. In other words, a physician can attend more patients if he/she has access to the patient’s electronically stored medical records. Therefore, this new software may assist the health management to improve its overall productivity and organizational performance. This software assists the health management to effectively keep electronic patient records, which in turn may benefit the organization to defend future lawsuits. It is clear that patients are likely to file suits against the hospital administration if they sustain health problems due to medical errors. If hospitals do not keep proper patient records, they are more likely to be found liable for damages. However, the health administration can avoid such issues to a great extent if it maintains proper patient records to produce as evidence against patients’ allegations in a court of law. Justification of the expense The sections discussed above depict the long term benefits of this capital purchase. It can be undoubtedly stated that this purchase assists the healthcare organization to meet its several hospital goals including departmental and management goals. Every hospital management aims to deliver high quality services to its clients at affordable costs. Evidently, this software purchase is useful for the organization to improve the quality of patient care services. As it is possible to manage patient records easily and flexibly using the software, the health management can extend its services to larger groups of clients at fairly low costs. Hence, the huge one-time expense associated with this software purchase would benefit the health organization to trim down its operating expenses in the long run that might have incurred from manual way of patient records keeping. Cost reduction is a major goal of any hospital management. In addition to reducing employee costs and other data management costs, this capital acquisition is likely to cut down possible future costs, like those associated with lawsuits. This capital asset is able to notably reduce workplace inefficiencies because it completely replaces manual record keeping systems. Scholars argue that paper based patient data recording system are no longer able to fulfill the needs of clinicians and other healthcare professionals (WHO). This software based file keeping system has some built-in intelligence capabilities and this feature may be useful for the health management to easily detect abnormal lab results or harmful drug interactions. Researchers indicate that electronically stored patient data characterized with built-in intelligence features greatly aids hospitals to reduce the risk of clinical errors to a large extent. Hence, this software is helpful for the organization to maintain its good will. Furthermore, this capital acquisition would better aid the organization to add value to patient rights. A patient has the basic right to obtain better healthcare services, which in turn are promoted by a software based patient data management system. However, it is undoubted that effective risk management is the most important factor that supports the huge expense associated with this capital acquisition. Evidently, this feature would provide the healthcare organization with a set of potential competencies over other healthcare settings. Conclusion From the above discussion, it is clear that the software purchase for filing patient records would benefit the healthcare management in the long term even if it costs high. Cost reduction, productivity improvement, and better operational performance are some of the major management goals related with this capital purchase. Through the installation of this system, the health management can significantly reduce employee costs and other data maintenance expenses. Cost effective strategy implementation is one of the major factor that would enhance the economic environment of the organization. Better information flow may be beneficial for the organization to plan and execute a strategy within the fixed time at estimated costs. Effective patient care, good health education, treatment cost minimization, and clinical research are some organizational goals that support this capital acquisition. This capital asset is useful to take immediate decisions and quickly react to clinical emergencies. Finally, the built-in intelligence feature is helpful to minimize the chances of clinical errors. References Gitman & McDaniel. (2008).The Future of Business: The Essentials. USA: Cengage Learning. Hill, C. W & Jones, G. R. (2009). Strategic Management Theory: An Integrated Approach. USA: Cengage Learning. Loretz, L. (2005). Primary Care Tools For Clinicians: A Compendium of Forms, Questionnaires, and Rating Scales for Everyday Practice. USA: Elsevier Health Sciences. Lima, S. N. D. (1998). A Practical Introduction to Health Information Management. USA:  Aspen Reference Group. Mani, A. (2012). Health it takes a giant leap. E-Health. Retrieved from http://ehealth.eletsonline.com/2012/04/health-it-takes-a-giant-leap/ Novak, A. (1996). Governing Policies Manual for Medical Practices. Medical Group Management Assn. National Research Council: Computer Science and Telecommunications Board. (1997). For the Record: Protecting Electronic Health Information. USA: National Academies Press. Plumb, J. A & Hanson, L. A. (2010). Health Maintenance and Principal Microbial Diseases of Cultured Fishes. USA: John Wiley & Sons. World Health Organization. (2012). Electronic recording and reporting for tuberculosis care and control, 1-76. Retrieved from http://whqlibdoc.who.int/publications/2012/9789241564465_eng.pdf Read More