Capital Investment In Health Care

Superior Essays
Financial capital is extremely vital to hospitals providing and maintaining high patient quality care. Also with keeping quality, patient care the hospital needs to remain financially stable. Being a health care manager, you oversee many expenditures that go to the hospital. Whether it is directly managing the cost of supplies, equipment in the hospital and, the staff that works in the hospital, much responsibility is placed on the healthcare manager. A healthcare manager also makes sure your hospital has access to capital which recently has become difficult due to the various changes in the market as well as changes in policy. One example of the market changing is the credit crisis at 2008. A policy change that took place was the Medicare …show more content…
This situation could be problematic because independent hospitals try to remain financially viable well while lot while allowing their buildings and equipment to age. The strategy is somewhat useful you sacrifice quality care by not allowing the building to age increasing the difficulty in recruiting and retaining staff. Also having a small number of beds with limited access to new technology makes it difficult for a hospital to stay financially viable without acquiring financial capital. Capital investment is a problem to health care managers because very crucial decisions must be made that significantly affect the business’s operation and financial standing for a long time. Capital investment must go through an analysis to fully explore any potential expenditures on the equipment, land even the infrastructure …show more content…
With a physician estimate, the figure shows a project lasting a total of three years, for the expansion to be 100% complete. Although capital investment analysis charts are imperfect, it aids health care managers that deal with enormous tasks like deciding where a business should go next. When dealing with a volatile industry, such as healthcare, being a health care manager these tools like capital investment analysis only show how vital they are to an organization. Being responsible for keeping the company on track is a great responsibility.
So with the Capital investment analysis, there are tools that can turn the cash flow into more clear-cut numbers if a plan works or not. One of the methods is the breakeven analysis, and its purpose is to give managers insight into the projects liquidity and risk. With the breakeven analysis, a healthcare manager can pinpoint the revenue needed to cover business expenses. In the breakeven analysis, payback is a measure of the cumulative cash flow turns positive and, at one time it was what managers used as a financial project worth developing (Gapenski, 2013). It is a system that gets

Related Documents

  • Improved Essays

    Shortage In Healthcare

    • 748 Words
    • 3 Pages

    “Although it is widely perceived that supplemental nurses cost hospitals more than permanent nurses, empirical evidence on the relative costs associated with using supplemental nurse is largely lacking” (Ying). With such a large nursing shortage hospitals have no choice but to hire supplemental nurses. “Use of supplemental nurses has been perceived as unsafe and a potential threat to patient safety” (Ying). With hospitals hiring supplemental nurses it has caused a lot of controversy. However, hospitals are concerned about the cost of hiring theses nurses, and the type of quality care the patients are receiving.…

    • 748 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Every healthcare organization in our country relies on financial and economic gains. In other words, without these two important factors, no healthcare facility would ever survive. For example, healthcare facilities rely on these supplies, staff and the proper financial knowledge to be available. The price and amount of healthcare supplies are rising, which in turn can increase the cost of healthcare (Kabene et al.). In fact, in non-profit hospitals like Yale New Haven, it is important to have an adequate balance of supplies in order to allow the healthcare providers to practice efficiently.…

    • 824 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    The use of electronic medical records has many advantages over the use of the other systems. However, there are also many obstacles that prevent execution fully still need to be addressed. Experts from smaller practices and hospitals embrace the Electronic Medical Records system more slowly and practice only a basic Electronic Medical Records system that provides limited benefits, which may not be as useful as high maintenance and maintenance costs. Better policies and more cost-on-execution may lead to better management practices so that issues here can be considered routine and not very important. Systems, people, processes and product factors play an important role in the fate of Electronic Medical Records implementation in every country.…

    • 1030 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Future Of Health Care

    • 958 Words
    • 4 Pages

    S. Kraft believes maintaining independent clinical judgment and avoiding burnout are the two biggest challenges providers will face in the future (personal communication, November 20, 2014). Dr. S. Kraft states providers will find challenges in not succumbing to do what is best for the government, insurance companies, and employing hospital systems, but doing what is best for the patients (personal communication, November 20, 2014). Also, the competing demands on providers’ time with spending enough time with patients, finishing documentation that meets all of the government requirements and spending time on obtaining prior authorizations for medication and procedures is putting an increased amount of stress on providers (Dr. S. Kraft, personal communication, November 20, 2014). Dr. S. Kraft explains recent research suggest approximately 50 percent of physicians are reporting at least moderate burnout (personal communication, November 20, 2014). Some of the burnout can be due to short supply of medical specialists in the field (Sultz and Young,…

    • 958 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    With predictions that this nursing shortage will be more severe and have a longer duration than previously experienced, traditional strategies implemented by employers will have limited success. The aging nursing workforce, low unemployment, and the global nature of this shortage compound the usual factors that contribute to nursing shortages. For sustained change and assurance of an adequate supply of nurses, solutions must be developed in several areas: education, healthcare delivery systems, policy and regulations, and image. This shortage is not solely nursing’s issues and requires a collaborative effort among nursing leaders in practice and education, health care executives, government, and the media. Every article, speech, and interview…

    • 2137 Words
    • 9 Pages
    Great Essays
  • Great Essays

    Introduction With patient safety being at the forefront of hospitals’ priority, it’s imperative for administration to implement infection control protocols. The practice of preventive measures along with staff education is necessary in the reduction of hospital liability, extended inpatient stays and loss in revenue. Although some strategies are standard throughout hospital organizations, data and con-stant monitoring of these procedures will provide insight into compliant areas or those that may need further improvement. According to an article found on the Center for Disease Control’s website, “Healthcare-associated infections (HAIs) in hospitals impose significant economic con-sequences on the nation’s healthcare system. With an incidence…

    • 885 Words
    • 4 Pages
    Great Essays
  • Great Essays

    Outsourcing In Healthcare

    • 710 Words
    • 3 Pages

    Outsourcing Healthcare Information Technology: Do the Benefits Outweigh the Risks? The IT department in a healthcare facility has several very important responsibilities in managing the clinical as well as administrative data involved in the facility’s daily function. Because the facility may be attempting to cut costs and the need for a competent, secure, and reliable IT department is critical to successful patient treatment, outsourcing the IT department is beginning to become more common in healthcare organizations. Outsourcing is effective in many healthcare environments; however, it can prove disastrous in some healthcare settings. It is a serious decision to outsource IT departments, so it is very important to consider the various benefits…

    • 710 Words
    • 3 Pages
    Great Essays
  • Improved Essays

    The effect of revenue sources on financial reporting depends on many factors which are the source where the revenue comes from. The hospital work very hard behind the scene to ensure that patients are getting very good care and service. One of the main sources of revenue for the hospital is the insurance billing, Medicare, Medicaid and private insurances are the ones that pay the hospital for the patient’s and they play a major part on the hospital revenue. Other sources are granted fund, test, and donation. Hospital received grant fund for researches and sometimes for their good service which also fall in the same category as the donation.…

    • 723 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    The efforts to introduce the change in the organization might be difficult and slow. An important component of change is an effective and involved leadership that understands the vision and facilitates the improvements across the departments. However, healthcare has been lagging behind when it comes to quality. On the other hand, there is an overwhelming pressure to improve the status quo, when it comes to quality in the healthcare industry, e.g. political pressure, the changes brought about by the healthcare reform and financial pressure (f. ex.…

    • 817 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Using financial statements in the health care organization can help those in that department double check their work to make sure the organization is financially viable. “These statements tell a story of where the organization is financially and how it arrived there” (Cleverley, Song, & Cleverley, 2011, pg. 198). Financial viability represents how a health care system is going financially and whether they can be trusted by investors. Investors will not want to invest their money into a health care system that has frequent variances within its budget and does not show stability within its finances.…

    • 792 Words
    • 4 Pages
    Improved Essays