Health Care Financial Accounting Essay

1230 WordsDec 6, 20105 Pages
Simulation Review Paper By Johnna HCS/405 Health Care Financial Accounting Instructor: Donna Pearson “Concern about the growth of healthcare a cost is widespread and continuing increases in hospital cost per day are a significant component of this concern” (2009). In this paper it shows an example of how healthcare cost is constantly increasing and what the hospitals have to do to keep up with the increase of costs. This paper is a simulation paper that analyzes financial indicators for decision making. In this simulation the financial accounting from a Cardiac Care Hospital’s Perspective had to bridge a working capital shortage, evaluate funding options for acquiring medical…show more content…
In phase two, I was to decide the best strategy to acquire new equipment for the hospital. The new equipment that needed to be purchased was a High Speed CT Scanner, X-Ray machine, and an Ultrasound system. I had to decide if the facility needed to apply for a loan to buy new equipment or refurbished equipment. If the new equipment or refurbished equipment was not feasible for EHC, then I had to decide if an Operating lease or a Capital lease was better. The choices that I decided were to Buy Refurbished Equipment for High-Speed CT Scanner, Equipment Capital Lease for X-Ray Machine and Equipment Operating Lease for Ultrasound System. The reason I chose these options was because buying the Refurbished Equipment was a better choice for the facility. A CT scanner becomes obsolescent in five years or less and their life span is 10 years so it would be better to buy a refurbished CT scanner and use that one until it is at its life span, and then upgrade. I chose a Capital lease for the X-Ray machine because “buying the equipment at a bargain price will be a good option because the equipment will last for a very long time” (University of Phoenix. (n.d). This was a good deal because an X-Ray machine lifespan is only 15 years. I chose Operating lease because there was a lower upfront payment and a lower monthly payment. Also an Ultrasound system has a lifespan of five years, so with the operating lease there
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