St Petersburg College Implications of A Health Services Department Discussion
Elaborate on the implications of a Health Services Department moving from a cost center to a profit center. Information discussed must include:
The difference between a cost and a profit center.
Decentralization versus centralization within the health service business.
How the health service department can stick to its historic mission of serving those without insurance and/or those that are historically underserved.
The implications of having public health professionals that are not permitted to bill or have reimbursable codes.
first response
There are many implications that can occur when a Health Services Department is moving from a cost center to a profit center. First, looking specifically at cost centers and profit centers, there are many differences between them. A cost center is responsible for the cost of an organization (Kaplan, 2006). Specifically, it incurs a cost for the organization, but it doesn’t generate a profit for the organization (Kaplan, 2006). These cost center departments are needed in the organization because they help improve customer experiences, perform research, do data analysis, manage different departments, and help maintain the organization (Kaplan, 2006). Examples of cost centers include: the Service, Administrative, or Support units (Kaplan, 2006). On the other hand profit centers do incur costs and they generate revenue for the organization unlike cost centers (Kaplan, 2006). Examples of profit centers include: inpatient care units, or sales units for an organization (Kaplan, 2006). So, there can be implications for a Health Services Department when it comes to moving to a profit center, they have to figure out how they will be making the profit for the organization which can be a tricky aspect.
In addition barriers that a Health Services Department could face include if the organization is centralized or decentralized. A centralized organization is typically one that has one individual making the decisions for the organization, usually this is seen when it is a smaller business or organization (Panda & Thakur, 2016). Whereas a decentralized organization has many individuals and different board members/teams that help make decisions for an organization so that it is more of a collaborative effort (Panda & Thakur, 2016). Some of the issues that can arise within decentralized organizations include, that there are multiple levels of teams and they can all have differing opinions, which can lead to situations of having difficulties with getting everyone to agree (Vinaytosh et al., 2018). On the other hand when it comes to Centralized, since there is only one or two people in charge it can lead to tasks taking much longer and decisions taking much longer to be put in place (Vinaytosh et al., 2018). With either of these depending on the Health Service Department and if they are centralized or decentralized, it can lead to there being delays or unsatisfaction with decisions to move from a cost center to a profit center approach.
Another area of concern when moving from a cost center to a profit center is continuing to stay true to the historic mission of serving those without insurance or those that are underserved. For a profit center the main goal is being able to bring in a profit for the organization, so it can be difficult to figure out how to do this and still stick to the mission of serving those that need the help. From current studies and articles it was found that the best way for healthcare facilities to still be able to do this and meet the profits that they need, it is important for public policy changes to occur to help health facilities (Elrod & Fortenberry, 2017). Until that may happen organizations have to find ways to help, which can include making sure to provide education on ways that people can help their own health, having provider volunteer during specific months to see patient’s that may not have insurance or be undeserved, as well as getting the community involved in helping to volunteer for events that could help people that are underserved as well as help raise money for these efforts, and having partnerships with other organizations to help meet the needs of this mission as well (Elrod & Fortenberry, 2017).
Lastly, is looking at the implications of having public health professionals that can not bill or don’t have reimbursable codes. This implication can be a bit of an issue for a health organization that is trying to move to a profit center because it’s an area where the organization may not get the payment for the services that are provided. This is an area where the healthcare organization may have to realize that this is a liability that occurs, but is important for the community. So, a fixed budget item will have to be made for this to understand what the cost is and, how much the organization may be losing from these service (Harrington, 2021). A verse that stands out when looking at this situation is as follows. “And do not forget to do good and to share with others, for with such sacrifices God is pleased.” (Hebrews 13:16, New International Version). So, since an organization has the skills and abilities to help others, we have to realize that this is a way to show the love of the Lord. In showing others that we can help them in their time of needs, and doing our best to show the presence and love of the Lord in the good work that is done.
second response
The healthcare systems in the United States are constantly changing. The constant new demands in the healthcare systems cause a lot of instability in service delivery and hence calls for flexibility of the health service department. Even the bible says, “For when there is a change in the priesthood, there is necessarily a change in the law as well” (Hebrews 7:12, ESV).
Managing cost is one of the works done by the leadership team in healthcare organizations, helping them realize success. The health services department is also responsible for controlling costs in a healthcare setting by identifying the business units as the profit centers or as cost centers. A cost center is accountable for evaluating and upholding the organization's expenditure as low as possible. This is done by analyzing all its processes while making relevant changes where necessary. A profit center is different from a cost center for it concentrates on creating and capitalizing on the organization's revenue sources. This is done by identifying and improving various healthcare organizations' practices, such as its sales (Niles, 2019). The health service department's services depend on the work's scope to determine whether to use a cost or a profit center.
For any healthcare to be successive and survive all the challenges it may be facing; it should identify strategies that will help them solve their problems immediately. The healthcare facilities must ensure that they are consistent in offering quality, effective and efficient healthcare services to their patients. The health services department has a significant role in coming up with an efficient strategic plan that will push the healthcare organizations towards success (Panth et al., 2018). The health services department structure the healthcare organization into two different models that decentralized and centralized designs. In ancient days, the healthcare organizations worked through the centralized design until the modern days where the healthcare operations have taken a drastic change and gone for decentralized structures. Centralization follows the procedure in which all health care organizations' processes and activities depend on the organizational leaders' decision-making (Niles, 2019). The power given in the healthcare organization through the centralization models is retained in its head office, and the subordinates receive commands from there. Decentralization in the healthcare sector is responsible for promoting accountability and competence among healthcare workers. When a healthcare organization employs decentralization in their activities, they boost governance and uphold responsibility among the healthcare systems.
It is true to say that in the United States, there is are also Minorities who are part of the population, and they are primarily found in the rural areas geographically. Via the decentralization, smaller organizations are availing services to this population in their remote areas since most of them cannot access the centralized services from big hospitals (Harrington, 2016). Their needs have been met courtesy of the improvements in IT where health records can be digitally accessed, and there have also been advancements in imaging. There is a dire need to care for the underserved, especially in healthcare, and the decentralization of healthcare has played a crucial role in ensuring that it has been achieved.
There are also some implications of having public health professionals that are not permitted to bill or have reimbursable codes. There is no adherence to the fee-for-service model in the United States by healthcare providers. The healthcare receives the payments mainly from the insurance that follows the bill for service that is indicated. Most of the costs for healthcare comes from the patient care they offer. There is a need to have an accurate and detailed record. There is a chance that the ability to collect financial data can diminish if the organization cannot have the bill codes and effectively use the reimbursable codes. Data is usually used in decision-making in the organization, and it is essential.
