IMPROVING ORGANIZATIONAL PROFITABILITY 2
IMPROVING ORGANIZATIONAL PROFITABILITY
Skilled Health Managers in an organizational setting must understand financial aspects to
assist in a firm's profit maximizations. They must be able to understand the relationships
between costs and expenses. In today's modern society, the reimbursement issue has continued to
decline because of the best practices required to do more for less. If the physician's offices need
to make a profit, the health managers show proactive, think critically and creatively. Nowickim
(2015) stated that health care managers should understand the accounting equation:
Profit=Revenues- Expenses. Profits refer to the amount of money received less the costs
incurred. Health managers must evaluate the avenues that increase revenue without increasing
the cost incurred. Therefore, they would need to identify the breakeven point where the expenses
incurred and profits generated are equal and continue to grow upward.
One of the recommendations health managers utilize to increase revenue without
increasing costs is the continuous provision of best coding practices. Cooper hypothesized
“Health care managers must ensure earnings from their practices are collected as much as they
receive reimbursements for any services rendered as possible.” He added that lack of attention to
coding or coding improperly tends to leave potential reimbursements out if not appropriately
coded. Consequently, the medical coding and billing staff must attend continued seminars and
training sessions regularly to ensure current coding regulations do not pass unnoticed. This
practice is likely to multiply the income generated by 20 percent through ensuring that all staff
understand coding correctly.
The second recommendation is to identify in-office products sales. Physicians, during
their duty, send patients to purchase products from a local pharmacy. They should identify
specific and often required products by patients and initiate channels of stocking and selling
