Healthcare Operation Questions.
In MS Excel, complete the exercises in part 1. In APA format, respond to the questions in part 2.
1. Lutheran Regional Hospital uses a planning process to define a new radiology service line. The decision matrix gave it a high priority, and administrators want to evaluate its financial feasibility. Estimated fixed costs are $1 million, and the estimated net reimbursement level is $1,500 per procedure. Physician and other provider salaries on a direct basis are $340 per procedure, and total operating expenses will add another $160 per procedure. Calculate the breakeven point for this potential new service line.
2. If Lutheran Regional discovered a way to reduce the total initial investment to $600,000, causing the average pricing level to fall to $1,200 and the other assumptions to stay the same, how many procedures would be required to break even?
1. What are some ways that hospitals can avoid qualitative and politically based decision making around technology investments?
2. What are the advantages to taking a portfolio approach to information technology?
3. What are the six recommendations for improving capital budgeting processes?
4. Should return on investment be analyzed at multiple points during a project’s life cycle? Why?
5. How does a hospital calculate its cost of capital? Which data sources are necessary?
6. Does the time value of money really affect the long-term financial outcomes for a hospital?
7. What are the limitations to net present value, payback, and internal rate of return?