MFR HSC Report: Income, Expenditure, and Finances in Healthcare

This report, based on a student's MFR HSC LO2 assignment, examines the financial aspects of health and social care organizations. It discusses diverse income sources, including client fees, sales, and government grants. The report analyzes factors influencing financial resource availability, such as creditworthiness, reputation, and government funding policies, while also considering the impact of Brexit. Different types of budget expenditure, including marketing, resource, operational, and human resource budgets, are reviewed. Finally, the report evaluates expenditure decisions, emphasizing cost-benefit analysis, emotionalism, and investment appraisal within the context of a specialist NHS hospital, the Queen Victoria Trust. The report utilizes various sources including books, journals, and online resources.

MFR- HSC

TABLE OF CONTENTS
LO2..................................................................................................................................................1
2.1 Discussing diverse sources of income that might encountered in health and social care.....1
2.2 Analysing factors which might influence availability of financial resources in health and
social care organizations.............................................................................................................1
2.3 Reviewing different types of budget expenditure within health or social care organizations
.....................................................................................................................................................2
2.4 Evaluating decisions related to expenditure made within health or social care
organizations...............................................................................................................................3
REFERENCES................................................................................................................................5

LO2
2.1 Discussing diverse sources of income that might encountered in health and social care
In the present scenario, there are various resources of income with availability in
organization along with health and social care sector. Generally organization directly varies
income type like sales revenue, earned dividends, gained investments, business loan, dividends
retained on share and interest gained through investment. Income is raised in economic benefits
during accounting period with form of inflows for enhancing to assist or with decrement in
liabilities as outcome with raise in equity instead of relating contribution through equity
participants. For purpose of health and social care organization for attaining success which
directly offers services to its clients as per requirement of source of income available to health
and care organization (Senier and et.al., 2019). The most important source of income is fees
charged to clients and in addition to this income through direct sales of goods and services,
company could produce extra income through investment activities.
On basis of NHS organization, it attains fund and grants through government directly or
with agencies like CCG, NHS along with local councils. The NHS is finance by general taxation
and supplemented through National Insurance contributions. NHS is described a free at the point
os use as patients are required for contributing for cost of some services such as prescriptions and
dental treatment etc. Furthermore, the relative contribution of each source of finance as general
taxation, user charges and national insurance (How health care is funded, 2019). It up brings lot
of problems to set up or moving forward with context to business.
2.2 Analysing factors which might influence availability of financial resources in health and
social care organizations
There are multiple factors within and outside organization which impacts availability of
funding in a company as these factors are stated below:
Creditworthiness is initial factor which is referred to future and current ability for entity for
attaining financial obligations. In case any business has history of defaulting with context to
financial obligation and it is difficult for attracting lenders. Furthermore, organization's
reputation directly influences to high extent with capability for attracting customers, lender and
investor. If there is presence of positive reputation, then it is easy for business for purpose of
attracting client more than revenue (Williams, Brown and Healy, 2018). Simultaneously, good
reputation creates ease for attracting equity , investors and enders. These both are major factors
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which influences of financial resources availability as in current scenario, Brexit has reflected
major implications for health and social care along with immigration policy with ability of NHS
for fulfilling vacancies.
Furthermore, Brexit has high potential for compounding pressures of workforce,
recruitment and retention problems faced in health and social care predate to decision of UK to
leave EU. Moreover, international recruitment is very effective in past and recommended to
government for creating ethical and robust infrastructure to recruit internationally. Working in
NHS is not easy and for EEA migrants, it is about to get high difficulties (Brexit: the
implications for health and social care, 2019).
With context to government funding policy, healthcare organizations under NHS system,
government finances them for enable offering service quality. Henceforth, amount available
from government id dependent on policy of government as these policies could bring movement
upwards and downwards of amount allocated to this healthcare sector along with funding to NHS
organisations. In the same series, challenging economic conditions in UK has raised risk faced
by company such as rising inflation, reductions of credit rating for counterparties investment,
prolonged period of rate of interest and decreased GDP could impact company's investment
strategy. However, sponsor could be referred as one of the main source of funds, lack of them
must have high impact on financial resources. Creativity in designing campaign and
differentiation must lay special emphasis to attract the major sponsors. Usually, company seeks
to minimise impact of some external events via diversified nature of its operations.
2.3 Reviewing different types of budget expenditure within health or social care organizations
Budget is considered as estimate cost, resources and revenue over as particular duration
and shows future financial goals and objectives. This is very important for business for placing
budget and helps for planning appropriately for expenditure along with income to attain financial
effectiveness and efficiency. It always comprises two sides as on 1st side it represents income
along with estimate of income anticipated to be earned and in other it deals about spending of
income. This helps company for controlling resources, motivating managers for attaining
budgeted targets and objectives such as financial performance, accountability against turnover
and outcome of project and this leads to decrease waste and raise profitability. Thus, companies
which adopt system of budgeting which is peculiar to nature of activities of business. There are
various types of budget which are stated below for health and social care organizations.
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 Marketing and communication budget: I various case, companies operate in competitive
environment. So in this aspect, there is need to reached and communicated to their target
customer. This budget leads to possibilities for purpose of allocating financial resources
for recouping marketing cost like communication cost among other and advertisement
cost.
 Resource budget: Generally, resources are essential for purpose of effective operation of
business and it explains about spending of income to acquire these resources (Barr and
McClellan, 2018).
 Operational budget as plan for monitoring regular activities, typically over one period
and it has separated budget for every department.
 Human resource budget: In this aspect, manpower is very essential asset of organization
as HR budget is developed for ensuring business to attaining the best manpower. The
budget recoup cost like training cost, selection, payroll and recruitment cost among
others.
When all budget are consolidated, they form master budget as it is the none which covers each
activities in a single unit of organization.
2.4 Evaluating decisions related to expenditure made within health or social care organizations
The main objective of queen Victoria trust as it is specialist NHS hospital which offers
life changing reconstructive surgery, rehabilitation services and burns care for people across
South of England is related to attain good returns of investment (Queen Victoria Hospital NHS
foundation trust, 2019). On basis of conducting some analysis for identifying viability and
profitability of its projects. There is consideration of analysis with context to make decisions
related to expenditure, cost benefits analysis, priorities, environmental analysis, emotionalism,
providing balance, accountability, adjusting strategies etc. Cost benefit analysis is considered as
procedure to be adopted through various organizations as Queen Victoria Trust has also implied
for evaluating total expenditure of the entire project, payback period, investment returns and
other issues such as life risk analysis prior to invest in any project.
Further, substituting emotionalism could be avoided in decision making related to
expenditure as Queen Victoria Trust has to set limit of expenditure against invested returns of
projected investment or for avoiding over spending. This would directly help organization for
monitoring budget and control expenditure to ignore losses for long term perspective even under
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pressure for attaining expenditure target. Simultaneously, there is requirement of organization as
Queen Victoria Trust for conducting investment appraiser through appraising and evaluating
each project to identify profitability and viability of projects. Thus, this would help Queen
Victoria Trust to lay emphasis on viable project to attain company set goal and targets to avoid
shortfalls. Lastly, virement process is used internally through business for transferring from fund
department.
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REFERENCES
Books and Journals
Barr, M. J. and McClellan, G. S., 2018. Budgets and financial management in higher education.
John Wiley & Sons.
Senier, L. and et.al., 2019. Understanding the potential of state-based public health genomics
programs to mitigate disparities in access to clinical genetic services. Genetics in
Medicine. 21(2). p.373.
Williams, I., Brown, H. and Healy, P., 2018. Contextual factors influencing cost and quality
decisions in health and care: a structured evidence review and narrative
synthesis. International journal of health policy and management. 7(8). p.683.
Online
Brexit: the implications for health and social care. 2019. [Online]. Available through
<https://www.kingsfund.org.uk/publications/articles/brexit-implications-health-social-
care>.
How health care is funded. 2019. [Online]. Available through
<https://www.kingsfund.org.uk/publications/how-health-care-is-funded>.
Queen Victoria Hospital NHS foundation trust. 2019. [Online]. Available through
<https://www.nhs.uk/Services/Trusts/Overview/DefaultView.aspx?id=1341>.
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