Integrating financial modeling and patient care reengineering

Healthcare organizations face significant pressure to decrease costs and increase quality. In response, many organizations are attempting to reengineer patient care processes through standardization, using critical paths and processes such as total quality management. Many of the organizational initiatives to analyze patient care, explore alternative processes, and establish standardized patient care have been managed primarily by clinical personnel who have not adequately incorporated financial analyses. A thorough understanding and documentation of the costs of providing standardized patient care have become essential parts of hospital management, particularly with regard to managed care contracting and financial planning under healthcare reform. This article presents a practical methodology to integrate financial analysis with the development of standardized clinical practices.