Health Care Services Organizations

Subject: Administration and Regulation
Pages: 3
Words: 575
Reading time:
3 min
Study level: College

What are the largest expense categories incurred by health care services organizations?

America’s health care spending has increased at an alarming rate over the past few years. Cleverley, Cleverley, and Song (2010) note that government spending on health care has almost doubled in recent times compared to its spending in the 1970s. At the same time, findings show that most Americans currently spend a significant portion of their income on health care (Cleverley et al., 2010).

However, based on a thorough analysis of the health care spending in the U.S. medical facilities, unpaid services are by far the biggest health care spending in America. According to Cleverley et al. (2010), health care institutions incur massive expenses on claims for services unpaid for either privately or due to failure by insurance companies to reimburse the funds. This makes it the number one health care expense in the U.S.

Employee expenses also rank among the largest health care expenses. Employee expenses include salaries and benefits to the medical staff, as well as employee training expenses. Cleverley et al. (2010) noted that health care personnel are among the highest-paid in the country. They also found out that most health care facilities spend about 60% of their revenue on employee-related expenses. This makes it one of the largest expenses in the country.

Cleverley et al. (2010) also noted that America’s health care facilities spend millions of dollars on equipment. This, coupled with the additional training to staff operating the equipment, make expenses on equipment fall among the large health care expense list. In addition, health care facilities also incur large expenses in the form of fringe benefits (Cleverley et al., 2010).

What are the key components of a successful business office operation in a health care setting? What are some examples?

The successful functioning of a health care setting requires a number of key components. Firstly, the health care setting needs very committed and proactive employees (Pass, Pliskin, and Ronen, 2012). Health care settings are normally complex and involve several tasks that require proactive and self. As a result, a health care institution should ensure that the institution has enough proactive and self-starters to assist in undertaking tasks in the institution.

The health care setting also requires a determined staff (Pass et al., 2012). This is attributable to the nature and magnitude of works involved in the health care setting. In this regard, tasks such as cracking down payments and claims may appear pointless but may create business failure if not tracked. For example, a patient may require a detailed explanation as to how the health insurance plan works in order to understand. This normally requires a lot of determination from staff members to be able to explain how the health insurance plan works. However, in case a member of the staff ignores the patient, this may make the patient feel less important, which may prove detrimental to the health care organization, thus the need for determination.

Thirdly, the filling system is another component that is extremely crucial for the successful operation of a health care institution (Pass et al., 2012). The filling system is particularly vital for health care institutions that operate on paperwork. This ensures that all records can be availed as and when needed.

Finally, a health care organization requires an excellent contract negotiator. This can be a hired lawyer to assist the health care institution in contract negotiation with insurance companies (Pass et al., 2012).


Cleverley, J., Cleverley, W., & Song, P. H. (2010). Essentials of health care finance. New York, NY: Jones & Bartlett Learning.

Pass, S., Pliskin, J. S., & Ronen, B. (2012). Focused operations management for health services organizations. Hoboken, NJ: John Wiley & Sons.