Simply put, healthcare is the support offered to individuals for the improvement or maintenance of their health, whatever the problem may be. This care is given by healthcare professionals, who are often specialised to deal with different, specific healthcare issues. There are many different branches of healthcare, covering all aspects of human health. Among these branches are: - Dentistry - Midwifery - Nursing - Medicine - Optometry - Audiology - Pharmacy - Psychology - Therapy All of these areas require an element of financial planning in order to ensure their sustainability and perhaps even profitability.
The healthcare industry can play a huge part in the economy of any country. For instance, in 2011 the healthcare industry in the USA accounted for 9.3% of the country’s GDP. Furthermore, a study by CNBC showed that American citizens pay up to 3.4 trillion USD per annum on healthcare provision. It also highlighted the fact that in 2012, the average American citizen paid around 10,000 USD on their healthcare. It is evident that finance is a fundamental element of the healthcare industry, and as such, modelling the finances of your healthcare service is absolutely essential. There is also increasing competition within the healthcare industry, particularly in nations, like the US, whose governments do not provide universal healthcare. More and more private healthcare and healthcare startup services are beginning to emerge. This can even be seen in countries with free healthcare, like the UK, where private healthcare businesses like Bupa see huge profits from their services. More and more of these businesses are beginning to exploit the huge profitability of this vast market, and as such, financial models are essential.
As a result of this system of competing private healthcare services, healthcare providers need to develop effective financial strategies in order to be sustainable and profitable. Many of these private healthcare services and private hospitals are heavily reliant on private investors to survive. It is incredibly unlikely to receive these investments without a fully comprehensive financial plan, forecast and model. These financial models range from startup healthcare models to budget modelling and cash flow statements. This kind of financial planning in the healthcare industry is also essential due to the fact that much payment will come from insurance. As such, it is incredibly to keep track of the finances of your healthcare service without an incredibly detailed financial model to map, plan and forecast the financial performance of your business.
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