Elijah Heart Center

Topics: Mortgage loan, Bond, Lease Pages: 4 (870 words) Published: August 19, 2014

Simulation Review

Simulation Review
This paper will highlight and review the options regarding the simulation from the Elijah Heart Center (EHC). I will discuss the best options for the healthcare center; this will include evaluating funding options for capital expansion, what the best option would be when it comes to upgrading the hospitals equipment, and how bridging a working capital shortage will help to turn financial matters around. Phase I: Capital Shortages

In 1998 – 1999 New York, the hospitals lost on an average $678 million due to Medicare cuts that were imposed by the Balanced Budget of 1997. It was difficult for managed care organizations to receive the full payments on managed care plans. I am assisting EHC in the best way possible to reach $750,000 for the first quarter. The simulation offered two options to choose from in order to receive the best loan to cover the remaining shortfall for Elijah Heart Center (EHC). I chose Loan option 1, it seemed to make more sense, and according to the simulation option 1 was the best to choose from to solve the working capital shortfall at EHC. In 3 months EHC will be receiving $2,300,000 from Medicare and Managed Care Organizations to assist in solving the cash flow issue. EHC will have to pay a higher rate interest at 9.45% but there is no repayment limitation. Loan option 2 had to be prepaid within six months (impossible without going further in debt). I also suggested that reducing a great amount of agency contracted staff would be beneficial for Elijah Heart Center as well, because the contracted workers receive much higher wages than those of the staff. The full – time staff at the care center has been there a long time and have established a patient worker relationship, the staff truly care for the patients whereas, the agency come and go. When this is implemented there will be a huge change in the “Revenue and Expenditure Projections”, and all will notice this is the most effective...

References: Rural Assistance Center. (2002 - 2014). Rural Assistance Center. Retrieved from http://www.raconline.org/funding/95.
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