Using microcomputers to improve capital decision making

Health care organizations have traditionally selected capital projects based on subjective measures such as medical staff priority, accreditation criteria, and regulations. In some cases, basic qualitative measures, such as payback period or profitability indices, have been used. The expected reduction in available capital that will result from changes in Medicare reimbursement and from managed care, as well as increased competition, will require health care decision makers to adopt more sophisticated methods of capital project evaluation in the future if they expect their organizations to remain viable. This article demonstrates, through the use of microcomputers and commonly used spreadsheet software, that the capital selection decision process can be improved and the optimal combination of projects, from a financial perspective, selected.