HRM4006 Planning and Managing Resources

Programme Name: Ba (Hons.) Healthcare Management

Module Name (and Part if applicable): Planning and Managing Resources part 2 

Assessment Title: HRM 4006 

Word Count: 1500 words 

Sources of Healthcare Funds

Three main sources of funds for the health sector discussed in this essay include income streams, taxes, and public finance.

Income streams

This source of finance mostly applies to privatized public utilities such as telephone, postal, water, broadcasting and electricity services. However, in NHS the income streams can be through the charging of private patients (Neun, 2003). The NHS does not actually charge private patients, sometimes the NHS may use private beds if they are short, but the care is still paid for by the NHS.


Taxes are the main source of revenue for governments. The revenues are then distributed to public utilities. Health and social care receive most of their funds from taxes. The taxes are of different types that are direct taxes which are levied on profits, income, and wealth. The category of direct tax includes taxes such as corporation tax, income tax and inheritance tax (Neun, 2003). The other type of taxes is indirect taxes which are levied on expenditure. These taxes include purchase tax, sales tax, fuel tax, value-added tax and the excise duties (which are collected on tobacco and alcohol). This is going off point a bit, you are asked to discuss the different sources of funding for the NHS, not for the Government

Public finance

This is formed by approximately 10 to 15 percent balance of bank borrowing and risk capital. The funds are obtained through construction of health care facilities. The NHS enters into a contract with private sector company to construct a new facility with the agreement that the construction running cost be funded almost entirely from charges levied on NHS over the lifetime of contract (Neun, 2003). The lifetime is always between 15-20 years. The figure below shows a model for health care financing

HRM4006 Planning and Managing Resources img1

Source: Stephen P. (2003)

Role of Project Managers in Managing Resources

Project managers are people who manage all the resources of an organization. It is the responsibility of the resource managers to ensure that their organization or entity has the right people with appropriate skills to complete the work needed. Project managers need to effectively articulate and set performance standards and goals (Neun, 2003). It is the responsibility of a project manager to manage the limited supply of resources in line with the dynamic demands. To cope up with the continuous changes in demand project managers to formulate and create short, medium and long-term resource management plans.

Short Term Plans

In the short term, the resource manager is mandated to look out a limited amount of time at specific task assignments. These plans help by providing information needed to make adjustments for urgent priorities. The urgent adjustments may be due to changes in scope, changes in an available resource pool and changes in schedules. Short-term plans are more precise because the management has a higher level of confidence in the foreseen events (Zahra & George, 2002).

Medium Term Plans

This varies from one month to six months ( medium term plans in the context of a big organisation such as the Health Service, would be 3-5 years) and it involves committing a specific type of resources or personnel in an organization. The importance of medium-term plan is that it can provide more accurate and detailed strategy in the utilization of resources. However, it not subject to constant changes. Therefore, it is the role of project managers in devising these medium-term plans aimed at utilization of available resources.

Long term plans

This is plans that take into consideration longer view of resources demanded. The duration is usually more than 5 years six months. In long term plans the resource manager is not bound to plan an individual task against a specific time frame, but they rather look at general tasks and the resources needed in general category of demand. As part of planning, the project managers are required to be aware of changing wants and priorities of a health or social care facility in order to optimally utilize available resources.

Financial Risks

The concept of financial risk in health and social care is similar to any other organization. Financial risks refer to the possibility that shareholders will lose money when they invest in the health or social care facility.  If for example a hospital is financed through debts and credit, there exist a possibility of the health care not repaying its suppliers. Financial risk can also be defined as the probability of an organization not honoring its obligations. There are several types of financial risk that can be experienced in a health or social care including liquidity risks, credit risk, equity risk, currency risk, asset-backed risks and foreign investment risks. Remember to add references

Credit risk- This type of risk is also referred to as default risk. It is associated with organizations which obtain funds from investors and due to some reasons are unable to payback. This results in loss of principal amount, interest earned and decreased income for the investors.

Liquidity risk – This involves assets and securities that are hard to sell or purchase in a short period of time for markets which are volatile.

Asset-backed risk – This involves changes in the value of securities underlying assets. The risks embodied in asset-backed risk are interest rate and prepayment risk.

Equity risk – this risks involve risks that are associated with volatile price changes of shares of stock.

Factors Affecting Management Healthcare Funding Decision Markings

This section presents four factors affecting the process of decision making in the management of health and social case funds. They include characteristics of decisions, characteristics of decision makers, information and external environment.

1. Characteristics of Decisions

The characteristics of the decision include the complexity of the decision. Complexity influence the speed of decision making. If the decision is complex, then the level of uncertainty reduce adherence to rational decision-making process (Zahra & George, 2002). Another characteristic of decision making is the implication of the decision, if the impact of the decision is expected to be huge then the duration of decision making will take longer.

2. Characteristics of Decision Makers

Characteristics including values, personality, group dynamics, loyalties, affiliations and cognitive style. The other factors are demographic which include education level, duration of tenure and age of the decision maker. These factors influence certain aspects of decision-making process including risk-taking levels, types, and level of data consulted and the rationale in making decision. However, the link between these characteristics and decision making are often related, unpredictable and influenced by other external factors.

3. Information

Analytical resources levels and information have been proved significantly shape decision-making processes. For instance, decisions on the extent of technology are affected by cost and clinical aspect considerations. In allocation decision-making in health and social care evidence and information are used (Zahra & George, 2002). To contradict these findings the function of information in organizational and decision-making on technical issues are less understood. However, this evidence existing suggest that decision makers refer to a wide collection of information sources. The information sources include media, academic journals, and perspectives of other decision makers.

4. External Environment

A range of contextual factors has been argued to determine value decision making in health care. Some salient external environment factors influencing health and social care decision making include; economic factors, political and regulation, and upheaval and change. Several studies on non-health strategic decision making, environmental factors including levels of munificence or hostility in the environment of politics have been found to be significant (Shepherd & Rudd 2013; Goll & Rasheed 2005).

Economic factors- These factors are in the form of resource constraints and pressures and they influence technical decision-making processes. For example, Castro et al. (2014) found out that levels of technology and patterns are affected by reimbursement regimes in a health or social care facility.

Regulation and politics- Bodies such as the public, legal bodies, media, professional representative bodies and government. The role that these bodies play in decision making have been proved to lie within technical decision making in health care contexts.

In conclusion, three sources of funds in health care discussed are taxes, income streams, and public finance. The roles of project managers in making short, medium and long-term plans in accordance to the proper utilization of health care funds and resources. The project managers are fully responsible for all optimal utilization of resources available within the health or social care facility. 


Neun, S. P., 2003. Economics Interactions With Other Disciplines. Sources of Health Care Funding Throughout the Globe, Volume 1, pp. 5-8.

Castro, C., Guccio, C., Pignataro & Rizzo, I., 2014. The Effects of Reimbursement Mechanisms on Medical Technology Diffusion in the Hospital Sector in The Italian NHS. Health Policy 115: 215–229.

Goll, I. & Rasheed, A., 2005. The Relationships between Top Management Demographic Characteristics, Rational Decision Making, Environmental Munificence, and Firm Performance. Organization Studies 26(7): 999–1023.

Shepherd, N. & Rudd, JM., 2013. The Influence of Context on the Strategic Decision-making Process: a review of the literature. International Journal of Management Reviews. 2(3). 60-71.

Zahra, A. & George, G., 2002. Absorptive Capacity: a review, reconceptualization, and extension. Academy of Management Review 27(2): 185–203.