Financial Aspect of Health Care Assignment Example | Topics and Well Written Essays - 250 words

Financial Aspect of Health Care - Assignment Example This is because knowing the healthcare costs ensures financial efficiency of the patient. Cost knowledge enables the consumer to plan (budget) for products and services; this will enable him or her to choose the most appropriate and affordable health product or service provider. The exact total fraud value in the healthcare sector in the USA is not known. The Government Accountability Office, in 2010, illustrated that $48 billion dollars were used in improper payments in the health sector. That is approximately 10% of the outlays for that year totaling to $500 billion. However, Erick Holder, the US Attorney General illustrates that approximately $60-90 billion fraud in 2010 in the Medicaid and Medicare fraud (Pear, 2008). Waste occurs in the health sector programs through misallocation of financial resources; for example allocating a lot of finances to non essential projects. Cost containment entails controlling the expenses or costs needed in operating a healthcare organization, or implementing a health project within planned budgetary limits. Cost containment exercise is a significant management function, because it ensures cost efficiency. This is through using appropriate expenses to achieve intended healthcare targets. The most appropriate metaphor for cost containment is financial budget. This is because it sets limits in the financial use in healthcare, so as to realize efficiency and effective management of funds allocated for healthcare (Pear, 2008). Healthcare is considered a business because it applies the theory and principles of management. One of the principles of management illustrates a scalar chain of command. This describes the flow of authority and power from a single top level, to the lower levels of the health organizations. In healthcare, instructions flow from the top management of the health institution, through the middle management, to the lower and non-managerial staffs. Healthcare is a delivery system because; it aims at