Introduction
In the U.S., the health system in most healthcare organizations is continuing to adopt digital tools, new software and strategies to bring modernization in every sector, such as how patients book appointments and how organizations make orders and manage supplies as they lower costs and improve results. These changes are connected to technological innovations, which most healthcare organizations have slowly adopted to improve their administrative and clinical systems, such as finance and patient-facing. A study by Thimbleby (2013) shows that despite being an essential force for public health, Technology will continue causing complex ways in the future, causing medical cost increases. Also, it has caused the establishment of reforms which affect the way the population access healthcare services. Due to the complexity of the process, all healthcare organization leaders need to gain knowledge on the current changes that take place in the health sector industry. Each healthcare organization within the U.S. tends to know what Technology to use and how it helps them offer the best services to their patients. For example, Cardinal Health Inc., the organization, understand the best and current technologies designed to aid community-based practices to be successful in a value–based care environment. However, it is essential to develop a proposal report indicating essential changes that Cardinal Health Inc. requires to overcome hurdles linked to the current changes within the Health sector.
Major Forces Affecting the Delivery of Healthcare Today
The current transformations experienced in the healthcare industry tend to be linked to various forces. Some of these forces include; technological advancements. In most healthcare organizations, technological advancement has affected how patients are handled, how a medication is administered, and how administrative processes such as financial processes are carried out. Some of the most used technology-based systems within the healthcare sectors are; VR/AR. Artificial Intelligence (A.I.), 3D-printing and use of robotics. Thus, healthcare organizations such as Cardinal Health Inc. must be familiar with current development to control Technology to stay relevant to the opportunities and challenges it may bring. Cost is The other force affecting healthcare delivery today (Ashrafi et al., 2014).In current healthcare operations, a financial factor is a key issue for healthcare delivery. There is a rise in the cost of medical treatments as a result of an ageing population, inflation, and chronic disease, which in turn affects the way healthcare services are delivered. Also, the high cost tends to affect the healthcare environment. Thus, it should depend on the cost information available for Cardinal Health Inc. to be cost-effective. High cost and inequality are some challenges that may affect healthcare organizations hence their ability to deliver healthcare to patients. For example, research by Porter (2008) indicates that the challenges of offering healthcare services in the U.S. are gaining huge attention as costs continue to increase. Such hurdles associated with the cost of delivering healthcare services have been there, although they are rising concerns in several countries, even those that use universal insurance coverage.
The third major force affecting health service delivery in today’s health industry is regulatory changes. Healthcare accessors and providers tend to be expected to adopt diverse strategic and regulatory priorities to create a better patient experience and huge transparency in the healthcare sector. Continued regulatory uncertainties in areas such as Medicare, the Affordable Care Act, and Medicaid and changes in interoperability regulations tend to cause critical hurdles for health sectors(Terry,2017). An so to avoid such as asses, healthcare organizations should have a track record of capitalizing and understanding the key regulatory change within the healthcare sector to move from reactive even and adopt a more proactive resilient growth approach.
Impact of the Forces
As indicated above, Technology advancements, cost and changes in regulatory reforms are some of the forces that affect healthcare delivery today. Each of these forces holds opportunities and challenges that managers from health organizations should understand and consider. For instance, using A.I. in the healthcare sector can transform how doctors diagnose, prevent and treat diseases. If used properly, Technology can improve patient outcomes, increasing efficiency and lower costs within the healthcare systems. Also, using A.I. creates opportunities such as; predictive analytics and drug discovery and development. However, A.I. is associated with challenges such as; a lack of quality medical data and methodological research flaws.
Conversely, using robots in the healthcare sector has transformed how surgeries tend to be performed, streamlining disinfection and supply delivery and enabling healthcare providers to concentrate and care for the patients(Zaydi et al., 2023). Thus, there is a need to acquire new talents to care for such technologies, which is challenging for some healthcare organizations. Thus healthcare managers tend to get the extra cost of recruiting and training new healthcare employees to equip them with the required skill. Thus, the increased cost is one big hurdle caused by technological advancement despite creating huge opportunities within the healthcare sector.
The other force that affects the delivery of healthcare today is cost. The cost of healthcare services has created opportunities and challenges for healthcare assessors and providers. For instance, the Affordable Care Act (ACA) has given many families opportunities to get affordable healthcare services(Katzen & Morgan,2014). As a result, there has been increased demand for healthcare providers, insurance companies and healthcare facilities. However, cost factors entail diverse challenges where it affects healthcare leaders. It has also hindered people from accessing quality care. A study by Montero and colleagues (2022) depicts that it is difficult for adults in the U.S. to afford healthcare costs. As a key force affecting healthcare delivery today, the high cost to access healthcare services causes healthcare manners to encounter.
Healthcare delivery is also affected by changes in regulatory reforms. In every healthcare organization, a regulatory system is essential since it offers them the opportunity to track the efficiency of the healthcare system and if it is complying with its contractual obligation. Also, regulatory bodies such as the Affordable Care Act of 2010 have affected the delivery of healthcare services in diverse ways, such as leading to incremental in the number of insured people, thus enabling them access to quality care. However, the presence of regulations such as Medicaid tends to prevent health insurers from refusing healthcare coverage as a result of some pre-existing conditions(Monahan,2018). Thus, the challenges and opportunities brought about by the forces affect the delivery of healthcare services and healthcare leaders.
The presence of advanced Technology such as A.I. has enabled healthcare leaders to solve healthcare-linked challenges where they are also enabled to process and convey large amounts of health information facilitated by the use of robots. The use of Technology has enabled healthcare leaders also to enhance patient safety. Elsewhere the presence of regulatory reforms has facilitated the presence of the solution to high healthcare costs hurden that healthcare leaders experiences. Being part of the healthcare industry, Cardinal Healthcare Inc faced diverse challenges due to Technology and other forces.
Cardinal Health Inc. is known to be a distributor of pharmaceuticals, global distributors and manufacturers of laboratory and medical products and also offers data and performance solutions for healthcare facilities. The Company happens to serve about 90% of United States hospitals. Over the past years, the Company engaged in different acquisitions that drove the expansion of the Company’s business, creating a complex I.T. environment that entailed various ERP systems and dozens. Thus, the Company had to adopt modernization, a concept that presented the Company with different challenges. The shifting process was supposed to occur within a narrow window and at 100% accuracy to avoid critical operational and financial impacts.
Opportunities
The modernization presents Cardinal Health Inc. with a variety of opportunities. The Company would require to use Google Cloud to scale its SAP-certified server systems beyond the Company’s previous 12 T.B. upper limit. The Google Cloud guarantees the Company a high bar with SAP certifying the Bare Meta solution sever option that can support up to 672 CPUs and 18 T.B. of spaces(Cook,2023). Also, the Company’s customers will have diverse storage options that offer about 96 T.B. and 400,000 IOPS per system. Also, the opportunity to acquire modernization will enable the Company to migrate business away from legacy systems to a unique, modern digital platform. The ability to leverage Google Clouds helps operate SAP application servers, offering the Company extensive advantages in efficiency and cost-effective terms.
Proposal
Cardinal Health Inc. has faced diverse challenges attached to its supply chain procedures. These include but are not limited to managing expired and recalled items, where 27% of hospital staff know expired or recalled supplies used on patients. Thus the Company needs to employ inventory management technology to improve on tracking expired products(Cardinal et al.,n.d.).Another challenge the Company faces is the lack of actionable data whereby through the adoption of modern Technology, the Company will be able to use predictive analytics to support better patient results.
Financial and Budgetary Considerations
Financial statements
In this proposal, different financial statements such as income statements, cash flow and audited balance sheets of Cardinal Health Inc. Using an income statement will offer the Company’s expenditures and income over a specific period. Using a cash flow stamen will indicate how cash entered and existed in the Company during a specific accounting period. Conversely, the use of an audited balance sheet will offer data regarding the Company’s performance within a specific period.
Proposal Impact.
In order to be said that Cardinal Health Inc. has fully transformed t modern Technology, the Company has used more funds to purchase new equipment that uses A.I. technology. The Company has to train more employees so as to have the necessary skill to run the Company as per modern Technology. Thus this proposal is more likely to affect the Company’s cash cycles. The Company must acquire capital from financial investors and institutions to sustain such an operation. These processes can only be traced if the Company’s managers understand the presence of income statements, balance sheets and cash flow statements.
Income statements
Using income statements will aid the company leaders in recording the depreciation values of every asset acquired. Calculated and recorded depreciation value will be shown in the income statements, whereby each year’s depreciation expense will be deducted on the expected period of the equipment. These statements will also include insurance, utility bills and other cost linked to I.T. projects that the Company requires to be fully modernized.
Balance sheets
This statement will contain capital spent on purchasing technology-based equipment such as A.I., robots and others(Thar et al., 2020). Also, the statements will contain working expenses incurred during running the new Technology.
Cash Flow Statements
Using the cash flow statement, the Company will record all cash received for eve spent purchasing the required equipment. The cash spent on the technology project and the day will be recorded. Also, any cash acquired from investors will be recorded to finance modernizing the Company.
Different between Flexed and Fixed Budget
Flexed budget tends to be a financial plan that changes based on activity level or production units. On the other hand, a fixed budget is a financial plan that does not change due to activity or output level(Adilli,2020).In another scenario flexed budget can be changed depending on how necessary a business activity is, while a fixed budget is rigid and cannot be changed. Conversely, it takes a long time to come up with a flexible budget because it is complicated, while it takes a little period to prepare a fixed budget since it is simple.
Proposal Justification
In order to successfully achieve the changes proposed in an organization especially, all teams need to be willing to execute the process. Thus, to ensure the proposal is easily implemented, the participating teams in decision-making must ask the Company if they are ready for changes. Ratios such as operational, debt, margin, and cash flow ratios will be used to show the proposal’s validity. The operational or efficiency ratio will be used to indicate the efficiency of the organizational management by comparing its total operating expense to its net sales. Debt ratios will measure how the Company uses debts in funding operations. There will be a margin ratio to measure the Company’s capacity to generate income relative to costs. Also, using cash flow ratios will be incorporated in measuring the times the Company can pay off current debts using the cash generated within the same period.
Ratio Results
Operating Capital ratio=Current Assets/Current Liabilities (FY2019/2018)
=40,963/ 33892
WCR =1.2
Having a WCR of 1.2 means the Company will be on the safe side and will be considered ideal. Thus, this WCR will enable Cardinal Health Inc. to pay off t s short-term liabilities. If the ratio could be over 2, it would show that the organization is hoarding cash instead of investing it back to facilitate growth.
Debt ratio=Total Liabilities /Total Assets ( FY2019/2018)
34,633/39,951
=0.9
Cardinal Health Inc is relatively safe, meaning the Company has more assets than its liabilities. This calculation will attract more investors who want to invest in the Company due to a positive debt ratio. Thus, the investors will not find supporting the Company’s I.T. project risky.
Long Terms and Short
Based on the above calculation, Cardinal Health Inc. will likely face short- and long-term impacts. For example, the WCR of 1.2 will enable the Company to invest its assets and hence be able to realize huge revenue from its operations. Also, results from the Company’s debt ratio will enable the Company to solve its long terms liabilities efficiently. Additionally, implementing the technology-based project will cause short- and long-term impacts on the Company’s financial statements. The Company will spend more on purchasing Ail equipment and training employees to be updated on Technology. In future, the project will help the Company realize huge revenue enhancements, causing long-term impacts.
Conclusion
Cardinal Health Inc. has encountered diverse challenges which, in one way or the other, affect operations procedures. These challenges have been linked to forces that impact healthcare delivery today. These include; technology advancement, cost and regulatory reforms. Despite causing challenges, these forces create opportunities for healthcare organizations that their leaders should consider. For instance, using A.I. in the healthcare sector can transform how doctors diagnose, prevent and treat diseases. Therefore, for Cardinal Health Inc. to solve its challenges especially facing its supply chain has to invest in a Technology project like A.I.And this proposal, if implemented, will add value to Cardinal Health Inc. by reducing cost, income, generation and patient safety efficiency.
References
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Cardinal Health Inc., (n.d.). Five Challenges Supply Chain Leaders Face. https://www.cardinalhealth.com/content/dam/corp/web/documents/infographic/Cardinal-Health-Supply-Chain-Leader-Infographic-Update.pdf
Cook, C. (2023). Cardinal Health goes big with Google Cloud Bare Metal Solution for SAP. https://cloud.google.com/blog/topics/partners/cardinal-health-transforms-with-sap-on-google-cloud
Montero, A., Kearney, A., Hamel, L., & Brodie, M. (2022). Americans’ Challenges with Health Care Costs. In KFF. https://www.kff.org/health-costs/issue-brief/americans-challenges-with-health-care-costs/
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Katzen, A., & Morgan, M. (2014). Affordable care act opportunities for community health workers. Cambridge, MA: Center for Health Law & Policy Innovation, Harvard Law School. https://chlpi.org/wp-content/uploads/2013/12/ACA-Opportunities-for-CHWsFINAL-8-12.pdf
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Thar, C. M., Jackson, R., Swinburn, B., & Mhurchu, C. N. (2020). A review of the uses and reliability of food balance sheets in health research. Nutrition Reviews, 78(12), 989-1000. https://academic.oup.com/nutritionreviews/article/78/12/989/5859719
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