Weekly tasks or assignments (Individual or Group Projects) will be due by Monday, and late submissions will be assigned a late penalty in accordance with the late penalty policy found in the syllabus. NOTE: All submission posting times are based on midnight Central Time.

Key Assignment

Established in 1987, ABC Community Hospital not-for-profit is an acute care hospital located in an east coast Metropolitan area. With a staff of nearly 200 physicians and specialists, 800 employees and 100 volunteers, they offer a full range of healthcare services. They are accredited by the Joint Commission on Accreditation of Healthcare Organizations. The hospital has been profitable for the last 5 years with a profit margin of 3-4%.

In March 2012, XYZ Healthcare System, a private, for-profit health care chain, took over management of the 400-bed ABC Community Hospital. In May 2013, officials began to discuss a proposal to build a new wing devoted to a Cancer Center and ancillary services devoted to the treatment of Cancer. The new wing would have 30 acute care beds, four surgical operating rooms, intensive care unit and extensive support services, including physical therapy and Hospice care. All patient rooms would be private. There is no Cancer Centers within a 200 mile radius of the hospital service area.

The board has come back with more question that they want you to add to the original paper:

Compare and contrast the kinds of decisions that are made in the Cancer Center capital investment decision analysis for the for-profit and non-profit healthcare facilities using the four stages of capital decision making process.
What information is needed by the CFO to evaluate the Cancer Center capital investment project?
Who, internally from the healthcare system and externally, should be involved in the capital investment decision process to determine the feasibility of the Cancer Center?

preview of the answer..

The investment decisions made by the ABC community hospital will have several similarities and differences with those made by the XYZ Systems. The differences are brought about by the fact that the ABC is non-profit organization whereas the XYZ is a profitable organization. This implies that the two organizations have different intentions for investment. While making investment decisions, the XYZ systems will be looking to increase the value of the organization. This stems from the fact that investments will increase revenue hence profitability which will in turn attract new investors. At the same time, the stocks of the organization are likely to increase because of an increase in the profitability margin. ABC on the …

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