Financial Management System in Hospital – ROJoson’s Notes

Financial Management System in a Hospital

A hospital needs a structured and comprehensive financial management system to ensure viability and sustainability.

Financial management system deals with the money to collect; accounting of money collected; safekeeping of collected money; and how to use the money.

The simplest organizational structure of a financial management system of a hospital can be as follows:

Financial Chief – overall head of the Finance Unit

Within the Finance Unit, 3 subunits:

  • Accounting
  • Treasury Management
  • Client Account Service

 

Accounting Unit

The Accounting Unit will do the traditional functions of financial accounting which include:

  • methods for recording transactions
  • keeping financial records
  • performing internal audits
  • reporting and analyzing financial information to the management
  • advising on taxation matters

Accounting is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information.

Accounting reveals profit or loss for a given period, and the value and nature of a firm’s assets, liabilities and owners’ equity.

Accounting provides information on

 

Treasury Management

The Treasury Management Unit will do the traditional functions of treasury management which includes management of an enterprise’s holdings, with the ultimate goal of managing the firm’s liquidity and mitigating its operational, financial and reputational risk.

Treasury management includes a hospital’s collections, disbursements, concentration, investment and funding activities.

Cashier is under Treasury.
Client Account Service  
The Client Account Service Unit will do the traditional functions of preparing a statement of account or billing for services rendered to clients.  Clients are mainly patient-clients. They may be other clients like corporate accounts and lessees of hospital spaces..

Billing is under Client Account Service.

PhilHealth, Health Maintenance Organizations, and Companies accounts are under the Client Account Service.

 

Manual of Governance and Operations and Management Systems 

For all the subunits under the Finance Unit, there must be a manual of governance and operations or a structured and comprehensive management system following the ROJoson’s Department Development Framework.

Flow of money from cashier to bank

Cashier Treasurer Officer

 

Collect money Place money in vault (during off-banking hours/days) Deposit in bank

 

Cashier 

Main station

Substation (DEMS)

 

Security from external theft / robbery

Security from internal theft

 

Records of transaction / movement

Personnel

 

Relationship of Accounting, Billing, and Treasury

Accounting
Money Billing Cashier Treasury
Inventory Department Inventory

 

Treasury  (based BOD policies and decisions)

  • Disbursement
  • Investment

 

ROJ@17apr10

Posted in Financial Management System | Leave a comment

Graphs Depicting MDH Journey Towards Excellence

MDH Journey Towards Excellence

I am happy to see this graph being presented by Dr. Bernadette Hogar, MDH Quality Management Officer in a public forum in March 30, 2017.

17554172_10212788248086237_263111957388450444_n

Looks familiar. The first graph was made in 2012.

mdh_journey_excellence_rj_12jun22

Then, updated in 2013.

MDH Journey_Excellence_rj_diagram_13sept5

Subsequent updating of the graph was done by Dr. Hogar after my retirement from MDH Administration in 2014.

I will ask Dr. Hogar to furnish updated graphs.

Happy to receive this delighful feedback from Dr. Hogar (17mar31): Thanks, Dr. Reynaldo O Joson for this legacy and the vision of continual healthcare improvement for Manila Doctors Hospital and the Asia- Pacific Region!

ROJ@17mar31

Posted in MDH Journey Towards Excellence | Leave a comment

PH Certificate of Need in Establishing Hospitals and Health Care Facilities

Before one can establish a hospital or a health care facility, one must strictly acquire a Certificate of Need (CON) from the Department of Health.

Administrative Order 2006-00o4, containing the “Guidelines for the Issuance of Certificate of Need to Establish a New Hospital” was issued on March 2006 to “address the maldistribution of hospital beds resulting in inaccessibility and inadequacy of the hospital delivery system in most regions of the country since most hospital beds are clustered in the urban areas.”   Under the order, Certificate of Need (CON) must be secured before a new hospital can be constructed.

ao2006-0004

There are changes and amendments from 2006 to present (2017).

ao2006-0004-a (2007)

ao2006-0004-b (2008)

ao2006-0004-c (2013)

The 2013 amendments (ao2006-0004) stipulate the following:

  • The requirement for a Certificate of Need (CON) shall only apply to proposed new government general hospitals.
  • Private individuals or corporations who shall establish new hospitals shall no longer be required to secure a Certificate of Need.
  • Proposed new private general hospitals should have at least one hundred (100) hospital beds.
  • Proposed new private general hospitals will less than one hundred (100) beds shall apply for CON.

ROJ@17mar3

 

 

 

Posted in DOH Licensing, DOH Regulatory Requirements | Leave a comment

PH DOH Rules and Regulations on New Classification of Hospitals – A Must-Know

All health sciences undergraduate students, all masteral students on hospital administration and all staff of hospitals and other health care facilities in the Philippines must know the most recent rules and regulations of hospitals and other health care facilities of the Philippines Department of Health.

The health sciences undergraduate students and masteral students on hospital administration must know the most recent rules and regulations so that they will have a comprehensive knowledge of the health care system in the Philippines and having such knowledge, will prepare them for involvement in hospital administration and activities in the future in case they decide to do so.

All staff of hospitals and other health care facilities in the Philippines must know the most recent rules and regulations so that they will know the legal requirements and conform; they will know their limits in terms of certified capacity of their hospitals and health care facilities; and they will know how to inform their clients and the public of their limits so as to avoid misunderstanding.

The most recent and still in force is the DOH Administrative Order No. 2012-2012 (promulgated on July 18, 2012; effective on August 18, 2012; transitory period up to December 31, 2017).

See attached DOH documents:

Administrative Order No. 2012 – 0012

ao2012-0012_reclassification_hospitals_2012

Administrative Order 2012-0012A

ao2012-0012-a_amendments_classification_hospital_2015

Administrative Order 2012-0012B

ao2012-0012-b_amendments_classification_hospital_2017

Amendment to Section XIII: Transitory Provisions:

“The moratorium given to ALL GENERAL HOSPITALS  including INFIRMARIES to complete all requirements under the new classification of health facilities is hereby extended up to 31 December 2017.” 

ROJ@17feb24

Posted in DOH Licensing, DOH Regulatory Requirements | 2 Comments

ISO Vocabulary on Auditing

http://www.praxiom.com/iso-19011-definitions.htm

Audit

An audit is an evidence gathering process. Audit evidence is
used to evaluate how well audit criteria are being met. Audits
must be objective, impartial, and independent, and the audit
process must be both systematic and documented.

There are three types of audits: first-party, second-party, and
third-party. First-party audits are internal audits. Second and
third party audits are external audits.

Organizations use first party audits to audit themselves. First
party audits are used to confirm or improve the effectiveness
of management systems. They’re also used to declare that an
organization complies with an ISO standard (this is called a
self-declaration). Of course, such a declaration is credible
only if first party auditors are genuinely independent and
free of bias. If you decide to use first party auditors to
make a self-declaration of compliance, make sure
that they aren’t auditing their own work.

Second party audits are external audits. They’re usually
done by customers or by others on their behalf. However,
they can also be done by regulators or any other external
party that has a formal interest in an organization.

Third party audits are external audits as well. However,
they’re performed by independent organizations such
as registrars (certification bodies) or regulators.

ISO 19011 2011 also distinguishes between combined
audits
and joint audits. When two or more management
systems of different disciplines are audited together at the
same time, it’s called a combined audit; and when two or
more auditing organizations cooperate to audit a single
auditee organization it’s called a joint audit.

ISO 19011 2011 should be used by those who carry out
first and second party audits. ISO/IEC 17021 2011 should
be used by those who carry out third party audits
.

PBLI: ISO/IEC 17021 2011

Audit evidence

Audit evidence includes records, factual statements, and other
verifiable information that is related to the audit criteria being used.
Audit criteria include policies, procedures, and requirements.

Audit evidence can be either qualitative or quantitative.
Objective evidence is information that shows or proves
that something exists or is true.

Audit findings

Audit findings result from a process that evaluates audit
evidence and compares it against audit criteria. Audit findings
can show that audit criteria are being met (conformity) or that
they are not being met (nonconformity). They can also identify
best practices or improvement opportunities.

Audit evidence includes records, factual statements, and other
verifiable information that is related to the audit criteria being used.
Audit criteria include policies, procedures, and requirements.

 


ROJ@17jan3

 

Posted in ISO | Leave a comment

Policies vs Rules

Policies are specific statements of principles and guiding actions that provides a basis for consistent decision-making.

Policies of an organization are meant to guide behavior and activities in a particular direction to help achieve goals and aims.

Rules are meant to guide the behavior and attitude of the employees to help them behave according to situations arising in day to day operations.

Rules are clear instructions that must be followed by the entities.

Examples:

Policy: Safety is our first concern.

Rule: A hard hat must be worn in a construction site.

Policy: Cigarette smoking is detrimental to health.

Rule: No smoking is allowed in the hospital premises.

ROJ@16dec11

 

Posted in Policies and Procedures | Leave a comment

Master Service Pathways of Department of Emergency Medical Services

Master Service Pathways of Department of Emergency Medical Services

service_pathway_dems_roj_16dec11

ROJ@16dec11

Posted in Service Pathways | Leave a comment