Table of Contents
Since its establishment, Warwick Referral Hospital has been offering a wide range of healthcare services to the residents of New York City and beyond. These services include short-term hospitalization, emergency room services, general and specialty surgical services, x-ray/radiology services, laboratory services, blood services, pharmaceuticals, pediatric specialty care, greater access to surgical specialists, physical therapy and rehabilitation services, prescription services, home nursing services, nutritional counseling, mental health care, family support services, genetic counseling and testing, social work or case management services and financial services among others (Jenks 1991).
Performance Evaluation Public Sector
However, over the past one and a half decades, there has been a significant drop in the overall performance of the organization both in service provision and annual revenues. This can be greatly attributed to lack of accountability when it comes to allocation of funds and the organization's resources. Various departments within the hospital have fallen victim to fraudulent activities by staff members and other hospital personnel who have deliberately misappropriated fund allocations to their own personal use. However, since no one has been charged with felony, the culture of corruption seems to have thrived very well within the hospital jeopardizing the hospital's activities, service production and overall performance. As a result, this has raised concerns within the publicity serves as well as other stakeholders prompting the need for a credible performance evaluation of the whole organization (Manasa & Reddy 2009).
Magnitude of the Problem
A close evaluation the corruption situation in Warwick Referral Hospital shows that the level of fraudulent activities within its departments is very high and this has been taking place for quite a long time, about fifteen (15) years now. This is subject to the rough evaluation of various aspects in each and every unit within the hospital. The exact size and nature of the situation was evaluated by breaking down and getting a detailed representation of information of embezzlement cases touching on various personnel working in each department. A close look at the hospital's annual budget and its overall expenditure per annum reveals a great discrepancy (Soltani 2005).
The performance evaluation process of Warwick Referral Hospital is supposed to be carried out in both short-term as well as long-term basis. However, the evaluation process to be carried out in the first instance should take at most four weeks whereby sufficient data and information about the organization should be collected, consolidated, analyzed and appropriate recommendations given on the necessary steps the management should take in order to stem corruption and embezzlement of hospital's funds (Soltani 2005).
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All the staff should be interviewed on their individual performance. This should be done through interviews by the evaluator in which the evaluator shall ask each and every member particular questions on their duties. The employees will be required to fully cooperate by willingly giving information about how they go about their day to day activities, tasks and responsibilities. The evaluator will also need to establish from them the department's goals and objectives, and try to know if they are working in line with the set targets. Besides, the evaluation seeks to discover what each personnel in each unit of the organization has contributed in terms of individual output and overall achievements of the departments (Jenks 1991).
The heads of each department will also need to be evaluated in order to determine their general performance in terms of managerial responsibilities as well as output in their respective departments. This involves their supervision duties as well as their monitoring levels of each personnel under their supervision. This would therefore mean that, the evaluator will want to establish the budget projections submitted by each departmental manager, budgetary allocation assigned to each of the departments and how the funds are used (Manasa & Reddy 2009).
Evaluation of Procurements
The evaluation will involve a thorough examination of the procurements made on a daily, weekly, monthly and annual basis. This will be done based on the availation and comparisons done with the departmental budget plans. Necessary discrepancies will be calculated and made known for each department so as to establish the levels of misappropriation of funds. The relevant personnel responsible should be able to account for the differences and if necessary through requisition receipts and order forms. This will also involve the staff in charge of stores to give records of all transactions involved during purchasing of drugs, pharmaceuticals and other items for hospital's use or sale (Jenks 1991).
The Evaluation of Financial Performance
The financial status of the hospital is a key element in assessing financial performance. It is imperative to have an assessment of the financial situation of Warwick Referral Hospital in order to form a just opinion and a clear and accurate presentation of income, liabilities, costs and financial efficiency. Evaluation of financial status has as a fundamental objective to illustrate the interest sectors of the financial condition, as well as of the management of the organization. The hospital must prepare financial statements that reflect a true picture of assets, liabilities, financial position and financial performance but also the result of its heritage. It is also required to prepare quarterly and annual financial statements under the provisions of Ministry of Finance (Soltani 2005).
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The financial situation of Warwick Referral Hospital is the main way to get information about the situation of the state patrimony and of territorial administrative units, as well as information related to the execution of budget revenues and expenses. Both the quarterly and annual financial statements provides information on the annual financial performance of public organizations and consist of the following essential components which include: the Balance sheet; Account of the results of heritage; Statement of cash flows; The situation of changes in the structure of assets; Account of budget execution; Annex to the financial statements consisting of accounting policies and explanatory notes (Manasa & Reddy 2009).
In order for the annual financial statements to be properly elaborated, an inventory is required: inventory of all assets and liabilities and other assets and valuables under the management of Warwick Referral Hospital. Measuring the financial performance through financial statements is done by measuring the financial performance indicators corresponding to each component of the financial statements. Thus, in the case of account balance and account of patrimonial result, the indicator for measuring financial performance is represented by the patrimonial outcome, cash flow statement has as an indicator of financial performance measurement the results of the treasury, the changes in structured asset capital has as an indicator the overall outcome, respectively the budget execution result for the financial situation has as an indicator the budgetary execution account (Jenks 1991).
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Performance evaluation of public health organizations plays an important role in setting the direction in which to move a system of health care and public health policy making. The starting point in evaluating the organization must consist of the definition of the following dimensions:
Technical - efficiency - technical efficiency principle is to use a minimum cost no matter what is produced. This implies effective combination of resources - doctors, nurses, equipment, medicines, etc., considering the costs to be paid for them.
Cost - efficiency - a criterion that is objective and involves combining services that were produced efficiently in order to maximize a certain measure of population health.
Locative - efficiency - comes from the sphere of economics and is an alternative to cost - efficiency. It is a subjective utility criterion and requires resources to produce goods that meet the utmost desires of the individual, based on his own tastes and preferences.
Equity in health sector - this criterion supports a fair distribution of: effects – health state; products - use of health care; opportunities - access;
Cost / economic sustainability - the criterion of cost / economic sustainability brings into question both the results outside the hospital's health sphere and those in health. This criterion draws attention that even a cost effective and efficient system can be considered too costly and therefore cannot be sustained economically.
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Economic - equity - refers to the distribution of health sector financing burdens.
quality - quality refers to two aspects, namely: technical quality refers to how well the system is working in terms of decision-making and related to skills in providing care and service quality that refers to accessibility to services, the level of offered facilities, convenience, the way the patients are treated etc.
The evaluation of financial performance in the hospital's financial system requires the use of a system of indicators showing a large number of financial medical issues. In order to analyze the performance in Warwick Referral Hospital necessary to compute some financial indicators, as follows:
- The cost of hospitalization day - is the ratio between total costs and the number of days of hospitalization.
- The cost per patient hospitalized - is calculated as the ratio between total expenditures and number of hospitalized patients.
- The cost of a hospital bed - is calculated as the ratio between total costs and number of beds.
- Specific investment – the indicator that reflects the investment effort to achieve a new medical object, development and modernization of existing ones or to compare the investment alternatives. The investment value is calculated by reference to the utilization capacity.
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- Fixed capital value of the new / modernized - expresses the total amount of resources spent on medical devices purchase and commissioning.
- Expenses processing - volume indicator which reflects the financial
Resources necessary to ensure that medical staff training to use their new devices.
- The expenditure pattern according to types of services depending on sources of income.
- The percentage of own income from the total hospital income means all the income that is obtained from contracts with health insurance house, also from subsidies from the local budget, state budget, donations, sponsorships and other revenues that are collected by the hospital.
- The percentage of the total costs of hospital personnel refers to budget
Provisions for staff expenditure, and here it is included the expenditure on residents and on staff on practice supervised in relation to the provisions of the budget total hospital spending.
- The percentage of the total drugs costs in relation with hospital budgetary provisions on medicines expenditure.
- The percentage of the expenditure of the total capital is in relation to hospital budgetary provisions for capital expenditure.
Financial indicators play a key role in evaluating financial performance because it provides information to users. They reflect the issues in depth, regarding how financial performance can be measured and analyzed (Jenks 1991).
In my opinion, the financial performance is not only a good result recorded in a certain period of time, but it means much more. It should be viewed and analyzed over a longer period of time. The Warwick Referral Hospital personnel have a fundamental objective to improve health. But for this objective to be achieved successfully and for the results to reflect the performance, they should assess the effects of public health actions as well as accountability.
Financial performance evaluation in Warwick Referral Hospital plays an important role in setting the direction in which to move to a better health care service provision and in establishing accountability. An effective evaluation is a systematic way to improve public health.
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