A Hospital’s Patient Safety Improvement & Financial Challenges

Topic: Administration
Words: 886 Pages: 3


Quality and safety standards at System X started to decline due to poor financing at the facility. Despite posting good financial results, the facility could have reached a point where it could not generate adequate monetary resources to ensure it provides high-quality and safe healthcare. In general, hospitals derive their revenues from offering medical and non-medical services, the government, investments, grants and donations from individuals and organizations. The primary source of revenue is generated by providing patient services. Therefore, a decline in the number of patients requiring medical attention could have caused System X to start experiencing financial difficulties.

The second major source of finances entails third-party sources that offer reimbursement for services offered to patients. The process through which these finances arrive at the hospital involves long processes that take time and is expensive (Costa-Font et al., 2017). Also, the reimbursement for health care services will vary greatly depending on the third-party payer. It is possible that the hospital could have offered many patients services that were to be paid for through third-party sources, but the finances failed to be paid in good time.

Furthermore, System X could have encountered financial challenges due to rising hospital expenses. The facility has 350 beds, an ambulatory surgery center (ASC), an oncology center, and large physician practice, all of which need to be managed and maintained. Figure 1 below indicates demotivated staff as a reason for poor quality of care. The problem could arise if the hospital did not have the finances to pay for adequate wages and salaries. It could further have been burdened by inadequate supplies such that the recommended treatment procedures could not be followed (Karaesmen & Nakshin, 2017). The overall economic environment could have been hostile to the hospital. In particular, the past ten years have been characterized by challenging financial and economic circumstances. The poor economic environment could mean people could not pay for medical services and the third-party entities could not remit their reimbursements on time (Ghaferi, 2018). Probably, System X could not access finances through the financial institutions leasing given the bad economic environment leading to deprived financial growth.

The financial challenges could cause the hospital to cut spending, making it difficult to provide quality and safe healthcare that requires adequate investment in technology. As indicated in figure 1 below, spending in System X meant that it could not catch up with the latest developments in healthcare (Karaesmen & Nakshin, 2017). As a result, System X could have lost patients who would prefer to seek better services in facilities with modern equipment. In addition, current technology in medicine has reduced patients’ need to stay in the hospital longer, such that System X from the bed facilities earns less revenue.

Root Causes of Poor Quality and Patient Safety at System X
Figure 1: Root Causes of Poor Quality and Patient Safety at System X


Short-term Recommendations

The most immediate intervention is to ensure the executive team implements a system for better financial oversight to help System X avoid bankruptcy and control its finances. For instance, there could be a requirement for monthly financial updates and statements. The move will help monitor financial directors’ actions and hold them accountable for their actions to promote good utilization of the hospital finances and capital resources (Karaesmen & Nakshin, 2017). Monitoring departmental overheads will help identify the hospital’s cost structure and implement flexible budgeting techniques that the management can adjust to fit the changing market conditions.

The hospitals should consider starting to charge uninsured patients requiring non-emergency treatment. Figure 2 below indicates the need to have march such patients with organizations offering medical financial assistance, such as charities, to avoid incurring losses for unpaid services to avoid financial losses. Ghaferi (2018) states that to improve the quality and safety levels, the management should ensure timely delivery from screening to treatment. System X service delivery can be enhanced by ensuring there are no delays and doctors do not perform unnecessary tests to provide quicker patient and save time and costs.

Long-term Recommendations

The hospital should consider investing in a system to help monitor labor and supply expenses that largely consume a bigger portion of a hospital’s budget. For instance, labor expenses can be managed by first considering the patient’s needs to ensure they are accorded the highest quality care (Costa-Font et al., 2017). The management can further invest in latest technology to improve quality of service and patient safety.

The management should develop clear performance metrics to ensure the delivery of quality and safe healthcare. The process could involve monitoring the productivity of each department and comparing it with the specific goals or benchmarks set (Campione & Famolaro, 2018). For example, the management can evaluate laboratory and testing department performances based on the tests conducted per hour, and the surgery unit can be evaluated by the productive hours per surgical procedure. The information will help the hospital’s management determine the staffing resources required for every department to make the most cost-effective decisions.

Figure 2: Recommendations


Campione, J., & Famolaro, T. (2018). Promising practices for improving hospital patient safety culture. The Joint Commission Journal on Quality and Patient Safety, 44(1), 23–32. Web.

Costa-Font, J., Norton, E. C., & Siciliani, L. (2017). The challenges of public financing and organisation of long-term care. Fiscal Studies, 38(3), 365–368. Web.

‌Ghaferi, A. (2018). Improving Patient Safety in Surgical Care. DeckerMed Critical Care of the Surgical Patient. Web.

Karaesmen, I. Z., & Nakshin, I. (2017). Applying pricing and revenue management in US hospitals — New perspectives. Journal of Revenue and Pricing Management, 6(4), 256–259. Web.

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