Healthcare Review

Good cash flow throughout an organization is often key to its success. Making financial decisions along the way can effect the effectiveness of the organization drastically. Being able to make the right short term and long term decisions takes skill and knowledge. Throughout the cash flow stimulation of Elijah Heart Center (EHC) my knowledge and decision making capabilities were tested. Throughout this paper I will review the decisions I made when put up to the task of dealing with working capital shortage, funding options for acquiring medical equipment and evaluating funding options for capital expansions.

The finance department at EHC is facing a likely working capital shortfall. To help combat the working capital shortfall I must choose two options to help reduce expenses and stimulate revenue. While evaluating my options I quickly threw out the option to reduce benefits. Although it would reduce costs by 20 to 30%, I did not feel it was in the best interest of EHC and their employees. By reducing their health insurance, paid leave benefits, bonuses, and retirement benefits. I felt as though employees may quit and it would cause potential candidates to not seek employment at EHC. I also threw out the option of reducing length-of-stay, I felt as though it would cause potential liability problems in the future, by possibly releasing a patient before they were ready. I ended up choosing to reduce staff, but not by downsizing the staff. I chose to reduce agency staff, which allowed me to reduce the portion of the staff that is agency contracted. This will reduce cost, because their salaries are twice as much as the other hospital staff. This will not have a large affect on patient care, but EHC will save money on the premiums and management fees they pay out to the staffing agency.