Qn. Identify the factors you believe to be the most critical to consider during this renovation bond decision .
One of the factors that are vital indecision concerning the renovation bond is the balanced scorecard. Cheryl posits that the balanced scorecard is essential as it filters any information that might be very important for any decisions made. The balanced scorecard helps in effective communication and the prioritization of the hospital's projects. It would help know the progress of the hospital towards decisions made for the renovation bond. Another factor that Cheryl Noki mentions is the dashboard report. Cheryl terms the dashboard report as very vital in the decisions made for the renovation bond. The nature of the dashboard report would help in knowing whether to finance or not. The analytics and the hospital’s business analytics derived from the dashboard report would assist in the decisions made for the renovation bond. Another critical factor of the decision is the critical hospital's drivers in their financial statements (Gapenski & Reiter, 2008). Also, both equity growth levels and sustainable levels of labor are an essential factor. The other significant factor is the macro-economic drivers of the hospital.
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Qn. Summary of the decision
The decision for the renovation bond was not approved. The hospital needed to use the new cost index that was updated and not the older one. The model created for the performance drivers helped in the final decision too. The hospital's labor costs needed to be reduced. The hospital's market share was huge. Then, there would be a better revenue generation. The level of competition would be redefined by the new strategies adopted (Porter & Teisberg, 2004). The previous renovation investment was spent on assets, and therefore there was no need to be provided with another renovation bond.
Qn. Identification of the information and its description that led to the decisions.
a. Investment Asset
The investment asset was vital in the final decision made not to take the renovation bond. It measures value for both the capital expenditure and the hospital’s working capital as responded by Cheryl. It was clear that the hospital had previously invested much on the facilities hence no need for any renovations.
b. Operational costs.
The decision was based on the outpatients, the inpatients, and the labor costs. Nonetheless, the hospital had a more significant market share. Hence, the contracts with the different payers would help the hospital generate more revenues. Also, the “Hospital Cost Index” determination helped in the decision provided. Nonetheless, the hospital had a substantial cost factor. It used 50% of the hospital system's cost to pay the staffs.
References
Gapenski, L. C., & Reiter, K. L. (2008). Healthcare finance: an introduction to accounting and financial management. Chicago, IL: Health Administration Press.
Porter, M. E., & Teisberg, E. O. (2004). Redefining competition in health care. Harvard business review, 64-77.
