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Assessing present and future capital expense levels under PPS.

W O Cleverley

    Healthcare Financial Management : Journal of the Healthcare Financial Management Association
    |August 8, 1986
    PubMed
    Summary

    Hospital executives face changes in capital cost payments under a prospective payment system. The capital expense ratio model aids in assessing current and future capital expenses for better financial decision-making.

    Area of Science:

    • Healthcare finance
    • Hospital administration
    • Health economics

    Background:

    • The healthcare industry is transitioning towards new payment models for capital costs.
    • Hospital executives' decision-making processes are significantly influenced by financial reimbursement structures.
    • Prospective payment systems are increasingly adopted, altering financial dynamics.

    Purpose of the Study:

    • To introduce and explain the capital expense ratio model.
    • To provide hospital executives with a tool for assessing capital expenses under new payment systems.
    • To enhance financial planning and decision-making in hospitals.

    Main Methods:

    • Development of the capital expense ratio model.
    • Analysis of the impact of prospective payment systems on capital costs.

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  • Assessment of financial strategies for hospital executives.

    • Main Results:

    • The capital expense ratio model offers a framework for evaluating capital expenditure.
    • The prospective payment system necessitates a re-evaluation of capital cost management.
    • The model assists in predicting and managing future capital expense levels.

    Conclusions:

    • The capital expense ratio model is a valuable tool for hospital financial management.
    • Adapting to prospective payment systems requires strategic financial assessment.
    • Effective capital expense management is crucial for hospital sustainability.