capital in health care organizations
Review these three articles related to capital in health care organizations. Â What do you find as some of the main take-away or interesting points of these articles
Â
CAPITAL FINANCE Cara Casolari Steve Womack prioritizing capital projects when cash is scarce Today's economic conditions have exacerbated the liquidity problems faced by many healthcare organizations, whether they wish to access outside capital or make use of internally generated funds. In both good times and not so good times, three strategic factors influence capital allocation deci- sions by managers of all organizations, not only healthcare companies: organizational mission, availability of funds, and cost of funds. Organizational Mission Defining the organization s mission is para- mount to any organization s success. Times of tumult, like the present, challenge an organiza- tion to refine and refocus its mission. Refining the mission requires an assessment of the needs of the community or population served to deter- mine whether the healthcare system provides the most critical and pervasive services. Refocusing allows the system to define areas of expertise on which to focus, thus creating a competitive advantage. This refocus serves to eliminate counterproductive strategies such as attempts to be all things to all people, growth of self-serving "fiefdoms" in the organization, and duplicative programs and serv- ices within the system. Prioritizing capital projects is more of a straight- forward process when the organization's mission is clearly defined. Availability of Funds One of the key drivers of a capital budget is the available cash for required expenditures. The determination of capital allocation begins upon management's completion of the organization's financial projections, including its cash position. When reviewing the financial budget and allocating cash for capital projects, managers charged with the capital budgeting process should reevaluate the organization's ability to meet its financial projections and examine what external or inter- nal constraints may limit available funding for capital projects. Four issues influence these considerations. Projections. Financial budgeting wül provide the first insights into expected cashflows and capital funds availability. Liquidity events. Anticipated debt issues, restruc- turings, and/or fund drives—as well as any upcoming sales of assets—should be considered as a part of this planning process. In addition, the analysis may include any upcoming sales of assets. Risks. The managers should objectively assess the organization's ability to achieve its operating budgets, including volumes, case and payer mixes, staffing, and costs. Results may need to be adjusted for risk to determine a likely level of performance and capital for allocation. Constraints. The managers should identify and adjust their analysis to account for spending constraints, such as bond covenants and debt serv- ice requirements. Appropriate planning is essen- tial if a significant portion of existing debt is maturing and if refinancing and/or restructuring is required because the doldrums of the current capital markets may have caused transactions to take longer to close. After managers have reviewed their organization's mission and determined the available cash level for capital projects, only then can they evaluate, prioritize, and select projects. The initial phase of the project evaluation process should include the 114 MARCH 2010 healthcare financial management
Â
Attachments:
Answers
Status NEW
Posted 13 Dec 2017 04:12 PM
My Price 10.00
----------- Â ----------- H-----------ell-----------o S-----------ir/-----------Mad-----------am ----------- Th-----------ank----------- yo-----------u f-----------or -----------usi-----------ng -----------our----------- we-----------bsi-----------te -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------ns.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age-----------
Not Rated(0)
