Capital investment

Discussion of topic one should be at least 300 words for a total of two pages. Be thoughtful, creative, and work to advance the Discussion. Discuss the process of capital investment and the importance of capital investment decisions for health care managers today. In your Discussion, use three key terms from Chapters 9 and 10 from Gapenski, L. C. (2012). Healthcare finance: An introduction to accounting and financial management. Chicago, Ill: . Then On two different paragraph give your personal opinion to Mercedes Whitted and Alicia Renville

Mercedes Whitted

Capital investment is when funds are invented into a firm or organization to gain invest and further business plan and growth (Kenton, 2011). Capital investment consists of seven steps such as: project identification, project definition, analyze the benefits (financial and non-financial), approve capital investment, implement the project, project management, and audit and report actual benefits versus assumptions (Mendrala, 2017). As a healthcare manager is it vital to review the time line to determine so the capital investment has made any improvement or decrease to business. Compounding should be done by the healthcare manager to determine the cash flow. Once the manager completes compounding it is important to perform an post-audit to see if capital investment has made any kind of improvement.

Mercedes Whitted

References

Kenton, W. (2011, July 13). Capital Investment. Retrieved January 6, 2019, from https://www.investopedia.com/terms/c/capital-investment.asp

Mendrala, J. (2017, October 16). Capital Investment Decisions – Process. Retrieved January 6, 2019, from http://magnusequipment.com/blog/2016/02/14/capital-investment-decisions-process/

Alicia Renville

I understand the process of capital investment to be investing money into your organization with the expectation of receiving a positive return of investment , which is defined in our text as the “financial attractiveness  of such investments” (Gapenski, 2012, p. 312). This type of investment looks toward the financial future rather than current day-to-day profits. When making a capital investment, it could be useful to utilize a  time line to see potential increase in revenue in the future.

In healthcare, capital investment decisions are well-thought out due to the fact it could end up being a very costly error. The goal of a healthcare organization is to provide high-quality care that is also cost-effective. When it comes to capital investment decision making, the healthcare manager is often part of the deciding factor. An example of a common capital investment in healthcare would be the transition into electronic health records. In this case, they have to weigh the cons and pros of this type of large financial investment. An IT investment in healthcare often strives to improve patient care by providing better care management and reducing overall cost. In most cases, these investments produce a great amount of financial return for the company. This leads us to another decision the healthcare manager may have to make; where are these funds now going to be used? They must make sure that the funds are allocated properly to ensure the best possible return. After the investment has been made, you will want to review the process and outcome to analyze if the investment was indeed a positive one. One way you can do this is by using a  post-audit  feedback process. This will give you the necessary information you need to see if any changes need to be made.

Reference:

Gapenski, L. C. (2012). Healthcare Finance : An Introduction to Accounting and Financial Management (Vol. 5th ed). Chicago, Ill: Health Administration Press.

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