1) Laying the Groundwork Scenario: Initially, the established leadership at the hospital was skeptical. Now they are at least willing to listen. So you decide it’s time to introduce a procedure that you think will improve the financial performance: the gastric sleeve procedure. Based on knowledge that you have gained in this course’s textbook: · Explain the different sources from which you may obtain the funds needed to introduce this procedure. · Assuming you have the resources to cover this new procedure, explain the implications of this new service to the revenue cycle of the hospital. 2) Crunching the Numbers Scenario: You’ve got the numbers and the CFO wants you to explain how this investment will be worth it. You will have to spend up front $2,000,000 to build a new OR and obtain equipment just to handle the procedure and then pay another $200,000 per year to a physician who will perform the procedure. You expect that it will take a while before the general public becomes aware of the availability of the procedure, so it will take $40,000 the first year, and $10,000 each year after that. For the sake of simplicity, assume that you will receive $1,000 from insurance for each procedure. The first year you will have 400 procedures and it will grow by 200 procedures each year. Use Excel to compute the following: · Using the payback method, how long will it take to recover the initial investment? · If the hurdle rate is 10%: o What is the future value of the initial investment? o Assume the future value is the cost of everything you will pay out over the five years, except for the initial investment. What is the present value? · What is the IRR? · Should you invest? Why or why not?
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.