Capital Investment In Health Care
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