Factors Affecting Financial Viability of Healthcare Providers


The United States of America’s population consists of different kinds of people with different backgrounds, cultures, social and economic status as well as insurance. All these people are in need of healthcare provision. With all this diversity, there are some challenges in the healthcare sector that affect healthcare providers’ financial viability. This essay seeks to outline the external factors that negatively influence financial viability of healthcare providers and offer some strategies that can be adopted in order to mitigate the problems faced by healthcare centers.

Multiple Methods of Reimbursement

These are various means which a healthcare provider is given as plans for healthcare payment. Different health plans have been developed in the country in order to reimburse physicians and hospitals for the services provided to the citizens. These payment plans are fee-for-service (FFS) plans, capitation, salary and discounted fee-for-service (DFFS) plans (Hollander, 2013). Every method that has been adopted by the healthcare provider comes with different financial risk. For instance, healthcare providers using FFS have some incentives and stand a better financial position as compared to those reimbursed through capitation.

On the other hand, capitation has a risk of financial constraints due to the budget allocation to which is very fixed. These methods allowed healthcare service provider to reach some financial progress, which they could not do earlier due to the possible threat of going beyond the budget. These measures should be analyzed, and a standard plan should be adopted that will allow the renewal of contracts thus enabling changes in reimbursement addressing the financial needs of the healthcare providers. They can be adjustable depending on the size of the facility and the level of the center in terms of the standardization.


Unemployment is a crisis that cannot be underrated in the whole nation. There are limited opportunities for every qualified citizen (Baird, 2013). Sometimes, a person is not educated or does not have a skill that the market is demanding. As a result, many become unemployed and thus lack enough money to access proper healthcare services. It also becomes difficult to get the   necessary treatment since the government provides limited allocated benefits for every citizen. This means that if there is a prolonged illness, then the person may end up being not fully treated in such a case. It also takes some time to realize the compensation plans from the government, and the processes are very rigorous and slow.

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Financially, this can affect a healthcare center as the delayed financial operations can slow down or postpone treatment and other medical services. The government should increase the allocated amount to healthcare for the unemployed then make the necessary adjustments on how compensation is processed.

Uninsured and Under-Insured Groups

Uninsured and under-insured clients can pose a high risk to the centers’ financial position. This is because when treatments go beyond the under-insured people’s limit, then there are chances that the expenses will not be compensated. It is surprising that one in every eight Americans does not have medical insurance. Therefore, the rate of the uninsured in the U.S. is quite high (Quadagno, 2005). On the other hand, a patient cannot be left to suffer because he or she has exhausted his limit. This means that there should be provided some services free of charge. For those who are not insured, it means that if any service will be offered to them, they will need to pay from their pockets or get assistance from family and friends. There is no guarantee that this patient will pay for the service especially considering the fact that he or she does not have an insurance cover, which means that there could be a financial problem.

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Both uninsured and under-insured patients pose a risk of prolonged payment for the service provided while the center has to continue its operation. There are high chances that this group of patients will contribute to the provider’s slowness in operations or constraint on the service provision due to the limited funds. There should be developed some policies that permit both uninsured and under-insured to be admitted through an insured person with little or no claim history over a stipulated period of time.

Local Economy and Socio-Demographics

A local economy may determine financial position of healthcare centers. For instance, there are high chances of opening modernized, advanced health centers in rich environment in comparison with the places that are struggling economically. Though there are no equal opportunities to grow economically in the whole nation, there are plans and strategies that can be adopted to stimulate economic growth of the location. For instance, there can be adjusted investment policies in a certain state to attract more investors in comparison to other states. The local government can also find the means of improving the infrastructures and increasing the way business is run in such areas. As a result, a stable economic position of a location means that people are able to meet their daily financial needs and have enough savings for the health care. This, in turn, will be a financial progress for healthcare providers.

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Health Status of the Local Community

A deteriorated health status of locals in a community would be a blow on healthcare centers in comparison with that of the citizens with a better health status. For instance, if a location had a history of nuclear rays or related illness caused by the environmental exposure to some poisonous deposits, there is a high demand for health care services provision. Fiscally, this means that there is more finance allocated for better care of this group until reaching stability. Since such a situation in healthcare could have been caused by a recent or a long time disaster, the government should seriously consider the issue (Kollek, 2013). There can be developed some procedures for raising funds and supplies from unaffected states to support the health centers in these locations. As a result, it will lessen the financial constraints on healthcare providers in these communities.

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