Chapter Nine 1-2
- 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 $1,000,000, and the estimated net reimbursement level is $1,500 per procedure. Physician and other provider salaries on a direct basis are $340 each procedure, and total operating expenses will add another $160 per procedure. Calculate the breakeven point for this potential new service line.
- 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 stay the same, how many procedures would be required to break even?
Chapter Ten 1-7
- What are some ways that hospitals can avoid qualitative that hospitals can avoid qualitative and politically based decision making around technology investments?
- What are the advantages to taking a portfolio approach to information technology?
- What are the six recommendations for improving capital budgeting process?
- Should return on in investments be analyzed at multiple points during a projects life cycle? Why?
- How does a hospital calculate its cost of capital? Which data sources are necessary?
- Does the time value of money really affect the long-term financial outcomes for a hospital?
- What are the limitations to net present value, payback and internal rate of return?
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