QD1. Discuss the current and future macroeconomic challenges that healthcare sector is facing and will be facing. Why is a financial manager important for successfully addressing these challenges? Answer With the change in macroeconomic factors, every financial and non financial sector remained infected. The same effect will also have on the health care sector. There are many current and future macroeconomic challenges which are being faced currently and will be faced in future by healthcare sectors. Current macroeconomic issues faced by health care sector Macroeconomic factors includes uncertainty in populations, budgeted financial figures, funds allocation by government, populations needs, increasing cost, greater spending than GDP, economic recessions, demographics changes, increasing demand, increase life expectance etc (Bodrud-Doza et al., 2020). As the population increases, the demand for health sectors increase which leads to give rising trend in budgeted figures for hospitals. Such rise required additional resources which must be available at hospitals to address the uncertainty in health budgets. Due to the shortage of financial resources, hospital and healthcare sectors need to avail the financial lending from the Government or banking institution to fill the shortage of resources. Finally the repayment will become the burden on healthcare sector participants. Government authorities required information related to the needs of public related to medical need. Collection of the information related to that needs is challenging for the health care authorities as it required knowledge of each person’s past history of patient visit of hospital and their medical history. Such knowledge and need analysis will then become the basis of allocation of funds to healthcare sector. After gaining the approximate figures, the most important challenge faced is the rise of health expenditure as compare to gross domestic product of the country which is at higher side. It is worthy to mention that any future economic recessions conditions shall not be ignored while calculating the health sector budgetary figures. Future Macroeconomic issues which will be faced by health care sector. Based on the current issues faced by the health care sector, it is expected that challenges such as availability of required resources, it easily accessibility, 1 quality management, technological advancement and availability of technical staff may be faced by the healthcare sector (Lachman, 2020). Once the government authorities had budgeted the expenditure related to healthcare, there are chance that budget fell short of resources due to rising demand or rises in prices of resources. These challenges need to be faced by health sector such as in case of pandemic with the demand for ventilators has been increase many folds. Even the financial resources are available, there is high probability the availability of resources such as medical equipments (ventilators, doctors safety kits) has been fell short. The medical related manufacturing firm may not able to procedure the desired goods due to covid-19 lock down. These challenges may be faced in future as well. Even the firms are manufacturing the desired medical equipments; there are chances quality of good compromised in wake of fulfillment of desired equipments. The comprised goods may affect the results of output and may harm the life of patients which can raise the challenge for manufacturing firms and medical staff. Availability of technical staff to operate the technological advanced equipments is itself a challenge as the availability of skill resources is time taking exercise. For such purpose, it may required to import the desired resources to fill the gap of resources and challenge. Current and future Role of financial managers for addressing these challenges As the macroeconomic factors, financial managers also steps forward to perform their role in addressing the current and future macroeconomic challenges. The role of financial manager includes controlling of budgeting figures, bargaining with vendors for purchase of equipments, matching the revenue and expenditure items to reduce shortage of funds, contingency planning, and effective utilization of funds or investing ideal funds, appropriate cost of services in order to charge the appropriate price to patients (Williams and Radnor, 2021). From the current prospective , Financial managers shall control the expenditures as compare to budgets in order to remain in line with allocated fund and reduce possibility to avail the interest based funding. In order to support the working capital requirements, vendors, suppliers and tradesmen were negotiate on payment term in order to avail the maximum period of credit period which can used the funds for operating expenses. 2 Financial managers have to face the challenge of available of medical related asset at healthcare sector. Important and short equipment such as x-rays machines and laboratory testing devices shall remain in spare capacity to fulfill the emergency needed. This type of availability can be covered in strategic planning which shall be covered by financial manager. The strategic planning shall be prepared by financial manager to cover the needs and desire of resources which includes quality medical equipments, contingency planning and its funding and software use to control these activities. For the future prospective, one of the most challenging issue need to be faced by financial manager is charging of pricing to patients who avails the medical related services. For such purposes, services of cost management accountant need to be consulted which can calculate or implement the management information system for calculation of appropriate cost of services and its billing services to patient. In addition to above challenge, optimum utilization of resource shall remain the major focus in order to manage the scare resources in fruitful manner. References 1- Bodrud-Doza, M., Shammi, M., Bahlman, L., Islam, A. and Rahman, M., 2020. Psychosocial and Socio-Economic Crisis in Bangladesh Due to COVID-19 Pandemic: A Perception-Based Assessment. Frontiers in Public Health, [online] 8. Available at: https://www.frontiersin.org/articles/10.3389/fpubh.2020.00341/full?repo rt=reader. 2- Lachman, P., 2020. Looking to the Future. Textbook of Patient Safety and Clinical Risk Management, [online] pp.45-52. Available at: https://link.springer.com/chapter/10.1007/978-3-030-59403-9_4. 3- Williams, S. and Radnor, Z., 2021. Moving from service to sustainable services: a healthcare case study. International Journal of Productivity and Performance Management, [online] ahead-of-print(ahead-of-print). Available at: https://www.emerald.com/insight/content/doi/10.1108/IJPPM-122019-0583/full/html. 3
