Health Care Financial Accounting 2 Simulation Review Phase I: Capital Shortage The cost-cutting option that I selected was Reducing Agency Staff and Reducing Benefits because these two options will produce the biggest savings annually. In choosing reducing the agency’s staff members, it provides good cost cutting measures without there being any significant drop in the organization’s revenue. This type of reduction will only slightly affect patient care. The most important reason this cost-cutting option was selected was that in hiring staff from an agency it is more costly than hiring employees to work full-time. It will save on the management fees billed to the organization and premiums that must be paid out to the agency. The salaries for individuals that are contracted through the agency are twice the cost of hospital’s staff members. However, if it deemed necessary to bring in agency workers then that option can be evaluated for each job’s position that have been vacated. The second option was to reduce benefits and this particular change will help Elijah Health Center with a 20-30 percent cost reduction. It will also only cause a slight affect to the quality of care the patient receives. Downsizing, reducing the length-of-stay, and changing the skill mix provides the least savings annually to the health center. Therefore, in choosing this option along with the reduction of agency staff it only slightly affects the quality of patient care and annual savings The loan option to improve the current working capital situation at Elijah Health Center was loan option two. This option was selected because it provides a lower interest rate of nine percent, and would solve the current cash flow problem. The hospital will also receive payments from Medicare, as well as other managed care payers and in three months, it will solve the current cash flow situation.
SIMILATION REVIEW PAPER2Simulation Review PaperIn life we often have to cross bridges to get where we are going. But not all bridges we cross are surrounded by water. There is also a financial bridge we cross. This bridge is full of decisions and choices, the decisions we make are financial decisions, economic decisions and not all decisions involve matters of the heart. We often have to make business decisions and it is not always easy. We often have to be on the outside looking in or vice versa. Today I will be looking inside the Cardiac’s care hospital’s financial accounting from their perspective. This hospital is facing a lot of downfall involving, accounting matters, capital shortage, funding options and capital expansion. Come with me and take a journey through Cardiac Care Hospital. Help me come in from the outside and figure out ways to fix the inside.To help with capital shortage within a company we have to make the right choices, however this is not always easy. To help with capital shortage we have to by cost-cutting. I chose to cut down the staff to control rising costs. I chose to downsize the staff because that decision slightly effects the hospital, however when the capital shortage decreases those loyal staff members will be able to return if they would like to.