Explain what the case study is about.
Comprehensive capital investment is vital, especially in health care institutions. The recent years have seen an increase in the need for more capital investment in health care systems. This is primarily due to an increase in both inpatient and outpatient admittances, which have exerted undue pressure on the available facilities. The excess pressure means that the available facilities must be expanded. Thus, the margin of the operational cost has expanded against the meager capital finances, which have only increased at average rates. This case study is about an assessment of the capital budgeting practices that have not been in use in previous literature.
Importance of finance or accounting in healthcare. Discuss the possible sources of human and statistical input needed when developing a capital budget?
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Capital budgeting involves timely and thorough planning and the comprehensive management of all assets. One of the most common sources of statistical input is the information gained from the modern finance theory and the net present value analysis. Budget proposals from department levels of healthcare institutions also provide vital information for the development of capital budgets. The most crucial human input in developing a comprehensive capital budget is the advisories of the Chief Financial Officer (CFO) and financial managers. Before a capital budget is developed, CFOs of health care systems evaluate projects against the mission statement and strategic plans of their healthcare care institutions.
Student conclusion. Does the knowledge help you as a student better understand the value of Finance and Accounting in Healthcare?
Capital budgeting is a fundamental process in the success and effectiveness of the daily operations of healthcare systems. The knowledge accrued from this case study is crucial to me as it especially enhances my understanding of the importance of financing and accounting in health care systems. The case study has also helped me understand the process of developing capital budgets, and the standard practices involved in capital budgeting. Furthermore, the case study reveals covers the necessary steps and requirements in completing the deployment of capital budgets. Generally, this case study is a good source of vital information on capital budgeting.
