CASE 20 QUESTIONS CORAL BAY HOSPITAL ? Traditional Project Analysis CASE 20 QUESTIONS CORAL BAY HOSPITAL ? Traditional Project Analysis Cases in Healthcare Finance, 5th Edition Copyright 2014 Health Administration Press 12/6/2013 CASE 20 QUESTIONS CORAL BAY HOSPITAL Traditional Project Analysis 1. What are the NPV, IRR, MIRR, and payback of the proposed ambulatory surgery center? Do the measures indicate acceptance or rejection of the proposed ambulatory surgery center? 2. Inflation is one of the most difficult factors to deal with in project analysis. a. Complete the inflation impact table shown in Exhibit 20.2. b. What management information is provided by the inflation impact table? 3. One board member wants to make sure that a complete risk analysis, including sensitivity and scenario analyses, is performed before the proposal is sent to the board. a. Perform a sensitivity analysis. b. What management information is provided by the sensitivity analysis? 4. a. Perform a scenario analysis. b. What management information is provided by the scenario analysis? c. Why is the expected NPV obtained in the scenario analysis different from the base case NPV? 5. A board member is interested in the utilization breakeven of the Center. a. What are the breakeven values of the three input variables that are highly uncertain? b. What management information is provided by the breakeven analysis? 6. To help with the risk-incorporation phase of the analysis, Jules consulted with Mark Hauser, the hospitals CFO, about both the risk inherent in the hospitals average project and how the hospital typically adjusts for risk. a. What is the projects differential risk-adjusted NPV? b. Assess the corporate risk of the project. (No calculations are required. Think about correlation of the surgery center and hospital cash flows.) 7. Jules Bergman is aware that there are some qualitative factors that are relevant to the surgery center decision. a. What qualitative factors might support project acceptance? b. What qualitative factors might preclude project acceptance? c. Can you think of any costs that might be associated with the project that have not been included in the analysis? d. Are there any potential benefits that have not been included? e. What additional data would you seek from other hospital staff members to conduct a more thorough analysis? 8. Considering all points, would you build the ambulatory surgery center? 9. In your opinion, what are three key learning points from this case? CASE 20 QUESTIONS CORAL BAY HOSPITAL ? Traditional Project Analysis Order Now

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• Revenue Management Services

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Accounts receivable management is an important part of the revenue cycle. It’s a process that includes collecting accounts receivable and managing cash flow by collecting payments on time, minimizing bad debt, and forecasting future sales.

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Healthcare Information Technology Consulting

Healthcare Information Technology Consulting

Providing advice on how to use technology to improve healthcare is the core of what we do. We work with clients to develop a strategy, help them implement their strategy, and help measure its impact on the organization.

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Revenue management services are a type of financial advisory that enables you to maximize your revenue. These services include:

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Takeaway:

So, what was the takeaway? The takeaway is that healthcare finance is a complex field with lots of different aspects. There are many different types of patients and providers, who have different needs and wants. And there are lots of options available when it comes to financing healthcare services. That’s why it’s important to understand all these things before making any decisions about your finances or how you pay for medical care.

Conclusion

Healthcare finance is a broad field that encompasses a variety of services. The industry has been growing steadily over the last few years as more companies seek ways to save money and improve their bottom lines. To best understand this industry, it’s important to be familiar with its main players: healthcare organizations such as hospitals and nursing homes; pharmaceutical manufacturers like Pfizer Inc.; health insurance providers like Blue Cross Blue Shield; and many others who provide financial services on behalf of patients or employers.