Keeping finance honest, transparent, and collegial is a foundation for excellence, but financial management itself must improve. Areas known to be fruitful OFIs include accuracy of financial accounting, the accuracy of managerial accounting, and the reliability of estimates for goal setting and financial planning. Associates' understanding and acceptance of financial reports is also an area of concern; it must be addressed by training and senior leadership encouragement, as well as by finance.

Why are accounting measures and other performance measures so complicated? Concepts such as cost per case or percent postoperative infections seem simple enough. Why must an HCO use FASB rules and National Healthcare Safety Network definitions and maintain internal and external audits? If it does, can we always compare two nationally defined, audited values for these or other measures? If not, what questions should we answer? Would an HCO ever design its own measures that were different from the national ones?

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Financial and performance measures can seem complicated for several reasons Standardization and Comparability FASB rules and national healthcare defin... View the full answer