Essay on Hcs 405 Week 4 Simulation Reveiw

1072 Words Mar 16th, 2013 5 Pages
Simulation Review

HCS483-Health Care Financial Accounting

Simulation Review When working as a health care administrator, one must make important financial decisions that can make or break the future of the organization. To give students a peak into some of these financial decisions, online simulations are used. This is the breakdown of one such simulation. The simulation in question deals with the Elijah Heart Center in New York State. The simulation covers three very distinction aspects of healthcare financial decisions that an administrator may have to make. First, a capital shortage and cost cutting techniques are delved into. What techniques can be employed that will provide adequate
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I chose to get an ultrasound system under an operating lease. This technology is rapidly changing and the equipment will likely be outdated before a new one would be paid for. An operating lease allows for the latest technology without dedicating too much money to something that will only be good for a limited time. According to the simulation, I made the correct choice on buying a new X-ray machine and operating leasing the ultrasound system. These would prove to be the most cost effective manner of acquiring these pieces of equipment. However, it seems that purchasing a refurbished high-speed CT scanner is the most cost efficient method. It seems that the price difference between a new and refurbished piece of equipment is about thirty percent, which is substantial.
Funding Option for Capital Expansion The final segment of the simulation deals with the prospect of major expansion and the need to acquire the appropriate funding source for such a venture. The simulation offered three possible avenues of acquiring funds; tax exempt revenue bonds, HUD 242 Loan Insurance Program, and Private Bank Funding. Tax exempt revenue bonds have one of the higher interest rates but are the cheapest to get issued. They have a high ten year prepayment limitation and a 3 year period of the use of the funds. Private bank funding comes with the highest interest rate and a medium cost of issuance. There is also a 2% of principle prepayment

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