Health Financial Effects

Health Financial Effects and Constraints
Lamont Hunter
OPS/HC 571
February- 28, 2011
Christopher Kelley

Health Financial Effects and Constraints
Hospitals are constantly faced with significant financial challenges to efficiently convert resources into outputs and simultaneously maximize quality of care in a cost-effective way.   This paper will discuss the challenges of financial effects and constraints faced by hospitals, specifically regarding cost issues of the pharmacy on operations management.   Additionally, the description of costs associated with inventory control, staffing, financial constraints, and proper financial reporting.
Pharmacy Effects on Operations Management
Hospital operations managers are facing increased demands to improve outcome values and the quality of patient care with controlled costs of various departments.   Specifically, pharmacy costs can easily exceed 10 percent of a hospitals total cost (Health Care Financial Management, 2010).   Understanding the challenges pharmacies face is essential for optimized clinical functions of an operations manager.  With the rising costs of prescription drugs, operations managers must find cost-effective ways to ensure quality and safety of care.  Pharmacies represent multiple operations management challenges including: inventory, personnel management, technology and automation, management controls, location analysis and selection, procurement, and network distribution (Langabeer, 2008).
Additional challenges are medication safety and supply utilization.  Operation managers must possess the ability to comprehend and adapt to changes that many pharmacies face daily as well as knowledge of how the effectiveness of the supply chain will enhance operations and the bottom line profits.  Understanding pharmacies challenges of growth of mail-order medications, technology, increased demands of aging population, and even the stress of attracting/ retaining employees greatly affect the success of the...