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Healthcare Finance and Economics: Cleverly’s and Eastlaugh’s Views

Originally, the importance of this issue may be estimated in accordance with the generally accepted practice of providing the health care economic analysis. In general, the economic information provided by the hospital department depends on the costs of the equipment, costs of the analyses, salaries of the medical workers, rent, etc. Surely, the more patients are served, the more income is registered. (O’Cleverly, Cameron, 2007) Considering the fact that hospitals are regarded to be non-profit organizations, the costs of the equipment, analyses, lab, and pharmacy costs can not vary. Nevertheless, the salaries and nursing costs may de slightly different due to various salary policies.

In order to give the distinct answer for the question of what accounts for the difference in costs, there is a strong necessity to review and analyze the costs.

Your Hospital Competitor
Discharges 150 90
Average Age 68 50
Length of Stay 4.4 4.1
Average Cost $10,550 $7,108
Nursing Cost $1,998 $1,208
Ancillary Cost $8,552 $5,900
Operating Room Cost $2,405 $2,158
Lab Cost $836 $484
Radiology Cost $277 $191
Medical Supplies Cos $3,022 $1,690
Pharmacy Cost $857 $335
Other Costs $1,156 $1,042

Originally, the key factors of these differences are covered in the values of discharges and length of stay. The fact is that, the more discharges are registered, the more patients the hospital was able to serve. The average stay defines the length of the treatment process, thus, more forces are spent for each patient, and more equipment capacity is applied. Thus, the difference in the costs is obvious, and there is no necessity to go in-depth for reviewing these costs. (O’Cleverly, Cameron, 2007)


Capital Lease and Purchase

First, it should be emphasized that capital leases and purchases generally differ with the approach, which is used for the transmission of the ownership rights, and are used for various purposes. Thus, as it is stated in Eastlaugh (2006) capital leases are used for long-term leases, and for various types of equipment, machinery, and other technical appliances which may become obsolete. The capital lease gives the leasing person all the benefits and disadvantages of ownership of the necessary goods, thus, the property in leasing is considered to be an asset, and maybe depreciated as any other property. The main difference of these approaches is generally covered in the notion that lease generally entails the option of the further purchase of the property, consequently, these approaches are close enough, nevertheless, the purchase presupposes the immediate financial contribution, while leasing provides an opportunity of the delayed payments and delayed ownership transmission. (Eastlaugh, 2006)

Retrospective financial analysis is generally used for forecasting the further financial performance of any company, basing on the tendencies and processes, which were used and observed in the past. The fact is that the retrospective analysis may be also used for preventing problems and difficulties, which are rooted in the past. Consequently, by analyzing the past, and realizing the tendencies and possible mistakes, disasters in the future may be avoided. In the light of this fact, it should be emphasized that the retrospective analysis can not predict future problems, nevertheless, it may help find the root of these problems.


The CEO of the hospital should primarily mention the possibility of entering the network of the largest commercial payers in the sphere of healthcare. Originally, if this was the primary reason for the decrease in the incomes and erosion of the funds, this possibility should be regarded in the first turn. Considering the matters of the impossibility of negotiating a new type of contract, Joshua’s response is satisfactory, as instructing the workers along with the analysis of the environment from the position of the controlling system may be regarded as the first necessary step for overcoming the possible employment crisis. (O’Cleverly, Cameron, 2007)

To sort out the situation and resolve the employment crisis there is a strong necessity to analyze the possibility of compensation in the matters of ripping up the contract. The analysis should also touch upon the matters of employment or the financial capability to withstand the current challenges, and compensate these efforts later. Along with the analysis of the employment practices, it should be emphasized that reconsideration of the network integration should be performed. Basing on the results of this reconsideration, further changes to the working practices should be performed. (O’Cleverly, Cameron, 2007)

If a new plan was not reached, the contingency plan would be based on the issues of the contract negotiations, restructuring the employment practices, as well as the working environment. Considering the matters of the financial erosion, the claim should be addressed to the government of the state to regulate the appeared situation. At least the matters of network integration should be resolved by this claim. Nevertheless, the main accent should be made on the independent resolution of the appeared situation. Thus, the most troublesome departments should be either restructured or joined with the others.


To make health care more available in the USA, there is no necessity to increase the salaries for physicians. Originally, if the main aim is to increase salaries, they should be increased for all types of medical specialists. Nevertheless, if the availability of health care will be increased, and the number of patients will be growing, the salaries will increase automatically, as the amount of work done will be essentially larger. (Eastlaugh, 2006)

The effect of the governmental directions is direct, as the innovations may be promoted by the governmental directions; these may be blocked or forbidden by some directions. Considering the matters of the governmental directions, and their impact on the medical innovations, it should be emphasized that the considerations produced by governments do not touch upon the innovations directly, nevertheless, the principles of these innovations may be regulated directly: blocking, promoting or restricting. (Eastlaugh, 2006)

The universal access to healthcare without losing our edge in medical research and education may be ensured by the matters of governmental directions, restructuring of the inner working performance practices. As for the matters of education research and development, it should be emphasized that educational promos should be arranged. The growth of the experts and professional growth of the practicing medical workers is the central issue of this development. In the light of the fact that the practical achievements of the medical workers and students may be achieved only by medical practice, the opportunities for the practice and research should be extended. Originally, this is the direct concern of the hospitals and government in order to keep the health care system active and with the sufficient amount of professionals.


Eastlaugh, S.R. (2006) “Healthcare Finance and Economics” New York Publishing.

O’Cleverly, W., Cameron, A. E. (2007) “Essentials of healthcare finance and economics” Jones & Bartlett Publishers


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