Understanding Quality and Performance
Strategy can be defined as the work plan of an organisation to achieve its objectives. The organisation should have both a short term and long term strategy. On the other hand, finance is defined as the monetary asset that is budgeted for a specific obligation to facilitate the mission and vision of the organisation. In a business, quality defines the value of products or services offered to the clients. Organization performance is the outcome the organization will achieve after setting the right financial and quality measures. An organization achieves performance by having a strategic plan that is well financed to provide quality products and services.
Accountability within a healthcare system is managed by the board of directors of the facility. The board has responsibility over the management team and can remove and appoint Chief Executive Officers for the organisation. Board members are of different fields with either an advisory or a corporate role. The board has the representation of the physicians, community and committee members.
In addition, organisations have values, mission and vision statements which they enable them to maintain that long term strategy. They also assist in the evaluation of the organisational performance. Therefore, the decision made should provide a way of measuring the organisation’s achievement in comparison with the mission and vision statement. Quality is a major aspect of the mission statement in the organisation.
An organisation performance is influenced by several factors, both internal and external to the organisation. The internal factors that influence the organisation performance include: organisation identity, organisation orientation, governance and management, infrastructure and technology, finance and the staff. While those considered external factors that influence performance in an organisation include: regulatory and policy environment, competition and demand and input variability.
In healthcare, value is not determined by the consumption behaviour like in other products. Value in the healthcare facility is viewed either as low prices service but attending to many cases per time period or by offering quality service at a higher price. The healthcare consumers lack medical knowledge and hence it is not easy to give value to the services apart from the quotation of the physician. Therefore, cost cannot easily be determined in the healthcare system. This bring a challenge in determining the value of services in a healthcare system.
Decision making in an organisation can be done by using the finance decision metrics method. The finance decision making process can be attained by either the net present value or the internal rate of return. Net present value is usually preferred to evaluate an alternative strategic plan before implementation. The net present value method uses discounted cash flow techniques over the term period given the cost of capital and hurdle rate. Alternatively, the internal rate of return is the discounted rate at which the net present value equals zero. The hurdle rate represents the adjustments for risk of execution of the plan.
In conclusion, the quality decision metrics is determined as the return on investment which is the difference between the internal rate of return and the hurdle rate. The positivity of the rate of investment is a good indicator that the decision made is sustainable for the organisation. However, the strategy that utilises the full resources of an organisation with a small rate of investment is usually preferred to a strategy with a high rate of investment and uses only part of the resources. Therefore, the financial rate of investment in conjunction with risk adjusted rate of investment make a stronger and more reasonable determinant in decision making in an organisation.