BHA 4053 Unit II Assessment

Question 1

20 out of 25 points

  Using the example balance sheet and statement of operations (Tables 2.2 and 2.3) provided in Chapter 2, calculate the three bond repayment ratios. Use your calculations to comment on the financial condition of Ridgeland Heights Medical Center. Your response must be at least 200 words in length.      
  Selected Answer:Long Term Debt to Capitalization Ratio: This is calculated as: Long Term Liabilities/long tern Liabilities + unrestricted net assets. In Table 2.2, page 40-41, this is as follows: $143,500/145,400 + 67,900+61,500 = 129,401 (Rounded). I am using the numbers from 2011 and 2012 as the table presents. Debt-Service Coverage Ratio:  Cash Flow to Total Debt Ratio: This one doesn’t show what I need either. I am sorry, but based on the text and the information given, I cannot adequately answer this question. I am away on military training, have limited internet, and I have zero training on this type of calculation. Unless and until real education (and this text is not sufficient) on such a question is provided to the students, I would suggest this question be deleted. I hope others had better luck finding the answers and did not suffer the same way I did. ReferencesSteven Berger. (2014). Strategic Financial Planning Five Year Projections. In Fundamentals of Healthcare Financial Management (pp. 39-59). San Francisco:Jossey-Bass. Retrieved September 16, 2016 Correct Answer:[None]Response Feedback:Thank you for your honesty.  Can you tell me what edition of the textbook you are using?        

Question 2

25 out of 25 points

  Everything in the hospital needs to be replaced. What a statement that is to make, but it is true! Every piece of equipment, every piece of furniture, every mechanical system, the hospital roof, the heating and air conditioning system. Even the hospital building itself eventually needs to be replaced. Of course, not all of that can be done in one year’s budget. As a healthcare administrator, how will you determine how much money you can spend on capital replacements and upgrades in a particular year? Explain the three approaches to determining capital affordability. Your response must be at least 200 words in length.      
  Selected Answer:The most obvious decision maker in this question is what needs to be replaced immediately and what can be fixed, appropriately, and replaced later. In doing this, there are things to consider. How your equipment and facilities are treated in every day use, and how often you evaluated the condition of the equipment and facility. If you have not made it a priority to take good care of what you have, you are making conditions unsafe and wasting your budget. Is it less expensive to report and replace a failing in the roof or pay for the health care and unemployment of an employee who had that roof fall in on him or her? In calculating the capital affordability, you have to do three things: You cannot spend more than your facility depreciation, meaning spend only when you have to, not over spend on what is required. You can also spend according to only a percentage of the depreciation, meaning you are saving money by only spending a small amount of what the depreciation will be. Also, you want to spend according to the realistic cash flow you have coming in at the time. In any case, the basic premise is to stay within your means, not over spend to the point you will never catch up. ReferencesSteven Berger. (2014). Strategic Financial Planning Five Year Projections. In Fundamentals of Healthcare Financial Management (pp. 88-89). San Francisco: Jossey-Bass. Retrieved September 15, 2016 Correct Answer:[None]Response Feedback:[None Given]      

Question 3

25 out of 25 points

  Why is it so important for a healthcare organization to develop a five-year strategic financial plan, not just an annual budget? Your response must be at least 200 words in length.      
  Selected Answer:An annual budget is simply a way that tells you how to spend for the very short term. A five year plan gives you options for expansion, planning for future upgrades, and staff, as well as other options to make your organization better. In an annual budget, you are concentrating on salary and expenses for manpower, essentials such as supplies and minor upgrades to equipment and building repairs. This is the kind of planning you budget for every year. The same items on the spreadsheet. With a five year plan, you can look ahead at a wish list, so to speak. If you want to add on to your facility, you can do so. If you want to add a new department, such as a pediatrics clinic, you can plan for it here. If you want to plan on an acquisition, this is where you plan for it. You do both, an annual plan and a five year plan. It is important for an organization to have a short term, cover budget while also planning for the future. There has to be continued budget negotiations within an organization in order to keep up with a five year plan. For an annual budget, you adjust on the go and work with what you have. It is also important, if you have a five year plan, to stay on budget with your annual plan. Correct Answer:[None]Response Feedback:[None Given]      

Question 4

25 out of 25 points

  Explain the difference between direct and indirect costs for a healthcare organization. Provide and discuss at least one example of a direct cost in health care and one example of an indirect cost in health care. Your response must be at least 200 words in length.      
  Selected Answer:In any business, there are Direct and Indirect costs associated with your production and services you provide. You have costs that are necessary to make the product or provide the service, and you have costs associated with supporting your production or service. Direct costs are those that are involved with actually making your product such as cloth, plastic, wood or other items and materials. Costs associated with producing but directly involved or in the product itself is an indirect cost and this can include rent or insurance on the building you use for your production or services. Direct costs can also be the building you buy to store or ship your product. You need the extra space because you produced something. Also included in direct cost categories, are employee wages. You need workers and they are the ones that are producing your product, so they are a direct cost. Indirect costs are also include employees, just not the ones producing pr making the product. Office workers, human resources and other employees not directly involved in the making are indirect costs. The costs of equipment used by these indirect cost employees are also indirect costs. The can be phones, office supplies and machines. ReferencesSam Ashe-Edmunds. (n.d.). Examples of Direct and Indirect Costs. Retrieved September 16, 2016, from Correct Answer:[None]Response Feedback:[None Given]      

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