Simulation Review Paper|
HCS/405 Health Care Financial Accounting
My strategy will consist of three phases. These phases include: capital shortage, funding options for equipment acquisition and funding options for capital expansion. During these three phases I will observe the necessary financial statements and documents. From this information I will analyze the information and decide the best strategy for improvements. I will not only focus on the goals for the clinic, but long term budget goals as well.
Phase I: Capital Shortage
There were two options that I chose to cut costs. The two options that I chose was to reduce agency staff and changing the skill mix. I chose to reduce agency staff because “Reducing proportion of contract labor used to fill vacancies among patient care workers would reduce costs, staffing nursing units and other patient care areas. The salaries of agency contracted people are twice that of the other hospital staff. Reducing these personnel will tremendously cut down costs. Bridging a working capital shortage is one of the strategies that can help increase the hospital’s revenue if a true concrete plan can be formulated. (University of Phoenix, 2011). I chose changing the skill mix because “Changing the skill mix by hiring unlicensed assistive personnel will offer an effective means of addressing economic realities. This option will allow nurses to delegate simple tasks in order to concentrate on more complicated tasks” (University of Phoenix, 2011). To solve the cash flow situation at Elijah Heart Center, the loan option that I selected was loan option 1. For option 1 the loan amount is $1.5 million at an interest rate of 9.45% with a monthly installment of 131,490.00 for a 12 month term with no prepayment penalty. I chose option 1 because there was no prepayment limitation. The outcome for my decision was that “the working capital shortfall problem at Elijah Health Center is...