Question one
The practices that are involved in the setup and management of healthcare organization budgets are the application of comparative standards, setting accurate and high departmental budgets, the establishment of the culture of accountability and expenses management, making corrective action plans, and using a balanced scorecard. The historical, zero-based, and flexible are some of the budgeting approaches that are used in any healthcare organization. For instance, historical methods assume that the past data has been updated by the current facts and proposals. Therefore, it incorporates trends into projections. The zero-based approach assumes the justification of all costs in the hospital, and there is non-existence of historical data. Lastly, the flexible approach tolerates some changes during the period of budgeting concerning the activities of the healthcare.
The flexible budgeting approach is the most efficient for instance; a given health care may face some variations regarding the cost of materials and salaries for the physicians (Aiena, 2011). Therefore, this approach considers these changes by making necessary adjustments. Since the deviations could have led to a critical role in the operational activities of the hospital, the application of flexible budgets will allow chief financial officers (CFOs) in such healthcare to measure the differences through variance analysis to make a comparison between the planned and the actual results.
Secondly, when a fixed budget is prepared, there is an assumption that production quantities in the hospital will be predetermined. Due to some factors that may arise beyond control such as an urgent need to hire an x-ray machine, it is important to adopt a flexible budget to take care of any level of activity within the correct range. That is a dynamic budget provide for adjustments especially when certain undertakings fail to meet certain expectations.
Question two
The new-eye popping technology will offer the provision for earlier diagnoses, modified treatments, and awesome range of benefits for the doctors and patients. By complying with the regulations in the health care, it is critical to acquire such technologies since it will enable the hospital to develop and formulate strategic objectives in the long run. Moreover, the ability to set goals is essential particularly to the growth and prosperity of the hospital.
The acquisition of new technology is like appraising the value of investment through capital budgeting, and this will enable our health care to make plans for long term direction. Additionally, a hospital should always invest in new technologies especially on medical equipment. Therefore, the acquisition of the eye-popping technology will represent significant expenses on the budgets. The new technology is valuable to the health care in the sense that it will save cash by continuous leasing or by purchasing used equipment.
References
Aiena, C. (2011). Budgeting Basics. Nuts And Bolts of Budget Planning In Massachusetts General Hospital.
