Strategic planning

Strategic planning

Strategic planning is essential for any health care institution. It helps in lying down the goals and objectives supposed to be fulfilled and accomplish the organization’s mission and vision. Also, it is necessary as it helps in achieving the set goals and objectives with the allocated resources. Financial planning is also crucial in analyzing the feasibility of a project.

The board is responsible for determining the organization’s asset growth rate. When it is high or stable, it means that a particular venture that the organization is operating is moving in the right direction. Several methods may determine the asset growth rate, including the data historical growth rate. It is possible to use this method as assets may remain constant for an extended period. Past growth, therefore, can be used to determine the future growth rate. Assets growth is a crucial financial target which the board must be responsible for. Assets are very vital when it comes to attaining the health care facility mission.  It also includes specifying financial objectives. The board comes up with specific goals and targets to be achieved by the hospital, as well as outlining how the set economic objectives will be attained.

The board’s other role includes reviewing and aligning the set goals with the financial management plan. The board does this by comparing both goals and business plans and designing ways of incorporating both to ensure the organization’s objective is met. Another role of the board is ensuring the organization is creditworthy. Excessive borrowing may be a cause for concern to any board. It is essential to have a debt policy that will provide the hospital to do not borrow excessively — later affecting the hospital’s operations due to high operation costs brought by high-interest rates expenses. Excessive borrowing leads to financial collapse due to payment defaults. The board should there regulate the amount the hospital should borrow. They should also ensure equal distribution of resources to ensure all the hospital departments are catered for equally.

The board should also monitor the financial performance of the organization. Including determining whether the hospital’s operations are on the right track. And determining any weakness that may be affecting performance and coming up with ways on how to deal with the identified gap. Improving organization profitability is very critical for any organization. The profitability objective is a vital financial policy target. It is the board’s responsibility to set these targets as it is from the profits that the hospital will be able to meet its business objectives.

B        

Many nonprofit organizations historically were known to mainly rely on physical assets including, lands, properties, and pieces of equipment. However, due to the complexity of the environment today. Organizations are now relying on physician acquisition to ensure they transform their care deliveries and making clinical IT investments. In this scenario, XYZ center financial and strategic planning is in line with the needs of the ABC community center.

The proposed new cancer center wing and the ancillary center services for the treatment of cancer would lead to the increased financial position of the ABC community. It is giving them a competitive edge over the other hospitals, which, in return, will attract more patients to their hospital. The private hospital wing and the hospice would be ideal for many patients who want some privacy and enjoy some silence in their private ward. These factors would increase the number of patients, thus increasing the profit margin from 3%-4%. Within a radius of 200 miles, there are no other facilities that are offering these services — making it a perfect plan to build a facility that is offering these services to the current cancer patients.

C          

              The management plan combined with financial through though what is known as financial management. This is the process where an organization can strategize their performance and business direction in its day-to-day operations. Financial management is essential in that it helps in determining the economic direction an organization is supposed to take. This is the role of the chief financial officer (CFO).   Financial management also helps in managing the daily business operations usually performed by the second in command in the finance department.

With the takeover, the CFO of the ABC community should consult the executives of XYZ since they operate under them before making any decision. Significant decisions should be passed to the XYZ executives, but the ABC CFO can handle those minor decisions.

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D

During the creation of a projected balance sheet, several assumptions are made by the organization on how certain balance sheet items are bound to change in the future. The business plan mainly considers future anticipated sales. Sales revenues are first focused on the projected balance sheet. Various balance sheet items like, accounts receivables and accounts payables, depicts a constant relationship to projections and sales of things that can be achieved based on the projected sales. other things in the balance sheet like debt, fixed assets and other change due to business policies and decisions made by the management, and they are independent of future sales

Any assumptions made for any balance sheet should be based on reasonable expectations of assets acquired in the next five years. It is usually a significant concern for lenders and investors, mainly the inventory and accounts receivables. These are both the functions of sales. The inventory assumptions should be matched carefully with the gross income projections.  Unless an industry has large accounts receivables, then it is not advisable to project highly. Because small business usually faces a short supply of cash.