MHA 612 Financial & Managerial Accounting
The Report describes a proposal for the group of 20 of doctors with regard to the creating a hospital. Due to the 500,000 population of the city $100 million dollars would actually be a great start. Because the facility would be located 30 miles from the downtown area it would allow the facility to attract patients without being crowded. On the downside this affects its financial position and market condition because of distance. A lot of patients are not able to get to the doctor due to the high gas prices. Using various strategies, such as looking into ways to connect with public transportation to deal with this problem and gain …show more content…
The effects of capital budgeting can be beneficial or detrimental if it’s not aligned with the organizational structure of the hospital. Hospitals are organized into departments and, since we want to strengthen the management of these departments, it is useful to have cost centers that correspond to the existing organizational structure of the hospital. This provides: (1) the road map by which costs can be routed, through the process of cost finding, to final cost centers; and (2) a framework for costing the distinct functions of each center. Following this road map shows individual managers how they are using available resources in relation to what has been budgeted and the services that they are providing.
After working out the inability to maximize opportunities, resources and budgets, the next step in making this expenditure work is working out the legal issues that may come. Avoiding the risk of begin sued when it comes to things like mergering with other healthcare organizations is something we have to seriously look at. With HCOs merging being a prominent area of antitrust enforcement and an area where economic analysis is vital, you maybe wondering why some hospitals still consider this option. For the buyer, with the market changing so rapidly, product development has become a luxury that is not always a viable option. Merger and acquisitions has essentially become an efficient means to enter a new market. Buyers are more than willing to