ParadigmHTM Podcast

Financial management for HTM is highly dependent of an understanding of the technical, operational, and regulatory considerations for the medical devices and systems. Therefore, a basic introduction on HTM Service Management options and strategies is essential.

Medical equipment management, whether it is viewed from the perspective of a healthcare delivery organization, medical device manufacturer, or independent service organizations, is grounded in a complex framework of regulations, standards, and best practices. It is important to understand these foundational rules in order to grasp a deep understanding of why the medical device industry operates the way it does.

Healthcare Technology Management budgets have some distinct characteristics however the basic finance, accounting, and budget principles are they same. We will look at the HTM budget from two perspectives. The first is the basic budget outline for an HTM department and the second is the basic budget outline for an HTM services program. You will see later that these have significant overlap and interdependencies, but we will start off simple for the sake of explanation.

The general ledger is the “log book” for all financial transactions in a business. In Healthcare Technology Management (HTM), many of these transactions are a result of purchasing activities associate with the HTM supply chain. The basic financial statements, such as income and cashflow statements, can summarize and describe these transactions in a way that helps the business assess the effectiveness of their strategies and show the status of their accounts. However, the basic financial statements do not detail the business plans, projected performance, or validation of current performance against that plan. That is the purpose of the operational budget.

A familiarity with basic financial and accounting concepts will help build an understanding of how Healthcare Technology Management (HTM) operations contribute to business decisions or how business decisions drive HTM operations. In order to contribute to the short term or long term financial goals for a healthcare technology business (ie hospital or service provider) it is necessary to link HTM operations to that financial plan through structured documentation and budgets. However, before we discuss budgets we need to review a key concept in the HTM financial ecosystem. This topic is supply chain management (SCM).

Let's make lemonade and financial statements! In this episode we will review the primary types of financial statement. These are standard formats for how to represent a summary of accounting information for an organization. Understanding the basic concepts and terminology of these statements will help to deepen your understanding of HTM departments budgets, equipment services budgets, and capital equipment planning.

The cost of healthcare is a mystery for two reasons. First, the average consumer does not understand the essential costs of providing care such as clinical cost, facility costs, and ancillary support costs. Second, the methods for pricing, billing, and collecting payments is extraordinarily complex. Understanding both the total cost of care and the reimbursement for that care is important for an HTM professional as these factors can drive each other. In other words, the more it costs to treat patients (including equipment service operations) the more we must charge for the care. And conversely, the less the insurance companies are willing to pay, the more expense we need to cut out of our costs. It’s a push and pull relationship.

We are beginning our discussion from the very basic fundamentals of finance and accounting related to HTM. In this episode, we will cover some basic accounting practices and terminology that lay the foundation for our journey through HTM financial management. It is important for us to start from the ground up and you will find that you will be able to play the game, without knowledge barriers, and you will ultimately be able to function as part of the greater multidisciplinary team that drives HTM finances.

If you believe for a moment that the technology you support is separate from yourself, you are mistaken.

It is you. Just as your arms, your legs, and your heart are fully you.

It is your eyes watching over someone who deserves the attention, and your eyes looking for things that need to be noticed.

It is your ears listening to a symphony of life, or a desperate cry for help, or a quiet whisper of hope.

It is your hands on someone who is very, very afraid, or is finally relieved of their worries, or so full of joy they can’t hold it inside any longer.

You are there during the greatest of human miracles, and the deepest of personal tragedies, and you are there when lives change in a blink of an eye.

If a patient where to ask you, “what is your role in all of this?” You reply with conviction,

“All of these blinking lights and beeping noises, and all of these dangling cables and dancing screens, are my eyes, my ears, and my hands.

We are watching over you. We are finding you answers. We are caring for you with every part of ourselves.”

This ParadigmHTM Podcast Series covers key apsects of financial management related to healthcare technology. This introduction will provide an overview of why this topic is important and how it applies to the work you do. The subsequent episodes will describe basic accounting and financial concepts, budgeting, life cycle planning, and other topics that tie in to HTM financial management.