You are a junior analyst at a 500-bed nonprofit hospital in a competitive metropolitan market. You have been asked by the CFO to work on the financial operating plan for the upcoming fiscal year. The finance department has stated that the hospital’s anticipated revenue is $60,000,000, with a 6% operating margin. The hospital administration is only allowing you to recommend up to a maximum of two projects to the CFO.
You have been asked to consider making a proposal for the following service line requests:
A new EMR system, 10-year payback with $1,000,000 outlay. The system will update current the platform to meet new regulations and, according to the vendor, provide better clinical outcomes.
Overhaul of the cardiovascular lab, rooms 2 and 3. Costs of $900,000 a room are estimated. The updates will generate a 3% return above what the hospital has historically seen due to advances in operational efficiencies.
New parking garage with an estimated cost of $3,600,000 (can be amortized over 5 years). The garage will add an additional 125 covered parking spots on the campus.
Purchase a 50-physician practice at a cost of $2,800,000. The group is also considering a similar offer at a competing hospital. The practice presently has a strong utilization in your facility.
In a 750-1,000 word proposal, answer the following questions:
Name and describe three components of the health care finance system that are present in the assignment.
Describe how the components you selected interact with one another and how this interaction informs your decision-making process.
Explain the steps and information you would need to make your recommendations.
Describe which two projects you would recommend and provide rationale.
Explain why you would not recommend the other two projects and provide rationale.
What if this hospital was a for-profit system, would your answer change? Why or why not?
Cite a minimum of three references to support your rationale.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
You are required to submit this assignment to Turnitin. Please refer to the directions in the Student Success Center.
This assignment assesses the following programmatic competencies:
MPA: 4.3: Analyze how components of the health care finance system interact with each other.
HCA: 3.6: Develop and apply skills necessary to manage finances, evaluate financial performance, and develop financial plans at the departmental/organization level.
MBA: 5.1: Develop financial plans to support the viability of health care organizations.
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