Applied Healthcare Managerial Finance

Established in" rel="nofollow">in 1987, ABC Community Hospital not-for-profit is an acute care hospital located in" rel="nofollow">in an east coast Metropolitan area. With a staff of nearly 200 physicians and specialists, 800 employees and 100 volunteers, they offer a full range of healthcare services. They are accredited by the Join" rel="nofollow">int Commission. The hospital has been profitable for the last 5 years with a profit margin" rel="nofollow">in of 3-4%.In March 2012, XYZ Healthcare System, a private, for-profit health care chain" rel="nofollow">in, took over management of the 400-bed ABC Community Hospital. In May 2013, officials began to discuss a proposal to build a new win" rel="nofollow">ing devoted to a Cancer Center and ancillary services devoted to the treatment of Cancer. The new win" rel="nofollow">ing would have 30 acute care beds, four surgical operatin" rel="nofollow">ing rooms, in" rel="nofollow">intensive care unit and extensive support services in" rel="nofollow">includin" rel="nofollow">ing physical therapy and Hospice care. All patient rooms would be private. There are no Cancer Centers within" rel="nofollow">in a 200 mile radius of the hospital service area. The Board of directors is concerned with takin" rel="nofollow">ing on the additional debt of the Cancer Center. They have tasked the CEO with developin" rel="nofollow">ing a fin" rel="nofollow">inancial plan and strategic plan that will outlin" rel="nofollow">ine the impact of the Cancer Center. They want you to address the followin" rel="nofollow">ing areas: What are the key fin" rel="nofollow">inancial policy targets for which the board is responsible for? List and explain" rel="nofollow">in each. How does the fin" rel="nofollow">inancial plannin" rel="nofollow">ing and strategic plannin" rel="nofollow">ing of the new for-profit status align with the fin" rel="nofollow">inancial and strategic plans of the existin" rel="nofollow">ing community hospital status? Explain" rel="nofollow">in how management control is used in" rel="nofollow">in conjunction with the fin" rel="nofollow">inancial plan. With the takeover, would the ABC Community Hospital CFO need to consult with XYZ Healthcare System executives for the decision makin" rel="nofollow">ing? A fin" rel="nofollow">inancial plan may be thought of as a bridge between two balance sheets. What are the major categories of assumptions that must be specified to project a future balance sheet, given the current balance sheets from the ABC Community Hospital and now XYZ Healthcare System? Compare and contrast alternative valuation methodologies and explain" rel="nofollow">in how a healthcare organization can maximize its value.