Hcs 405 Simulation Review Essay

1282 Words Nov 10th, 2012 6 Pages
Simulation Review Essay
Macy Skalski
HCS/405 Health Care Financial Accounting
University of Phoenix- AXIA
Instructor Sherida Douglass
November 19, 2012

Simulation Review Essay
The Elijah Heart Center is facing the financial distress common in specialized health care organizations. This is the combination of the need for improved technology, a reduced income, and the demand for expansion. Without the needed technology and expansion, there is little that the hospital can do to improve the income. The financial situation requires a combination of strategies to reduce costs and to make the wisest choices regarding acquiring needed technologies and expansion.
One of the main goals in this situation is to save $900,000 for the first
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This would mean that the hospital could not begin to pay this loan off for six-months adding more interest. By choosing the combination of these costs cutting options and the loan option patient care was minimally affected and the hospital will save a total of $811,249 in the first quarter alone, which will definitely be enough to meet the goal of saving 900,000 in the first year.
The facility is also in need of new equipment to make sure patients are receiving the proper care and to reduce costs in the long-term. The facility needs to purchase these machines. The machines needed are as followed: high-speed CT scanner, an x-ray machine, and an ultrasound system. There are a few different options when obtaining medical equipment and in this case the facility is purchasing new equipment, purchasing refurbished equipment, or obtaining an operation or capital lease. The best strategy for purchasing a high-speed CT scanner would be to purchase a refurbished machine. The useful and usual life of this equipment is approximately 10 years. Although the hospital may need to upgrade the technology of the scanner in five years, at this time buying a refurbished scanner is the best option. The hospital can upgrade the equipment at a later time extending the usual life of this device. This will be recorded as an asset, but at a lesser value. The loan rate is also low at 9%.
The best

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