Read Chapters 4-5 in Gapenski (2013). And PowerPoint 4 and 5. Many hospitals use square footage to allocate housekeeping costs.

Read Chapters 4-5 in Gapenski (2013). And PowerPoint 4 and 5. Many hospitals use square footage to allocate housekeeping costs.

The rationale, of course, is that one patient services department that is twice as big as another will require twice the expenditure of housekeeping resources. The advantage of this cost driver is that it is easy to measure and typically remains constant for a relatively long period (department space allotments do not change very often).

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The disadvantage of using square footage as the cost driver is that some patient services departments require more housekeeping support per square foot of occupied space because of the nature of the service that the department provides. For example, emergency departments require more intense housekeeping services than do neonatal care units, and surgical suites require more intense services than do routine care departments.

What do you think? Is a more effective cost driver available for allocating housekeeping costs than square footage? If so, what is it? Describe how the suggested cost driver might work.
2. Read Chapters 12-13 in Gapenski (2013). And PowerPoints appendix A and B.
? Regardless of the specific line of business, should all healthcare businesses use the same set of ratios when conducting a financial statement analysis? Why or why not and what would you use. Explain.
3. Read Chapters 6-7 in Gapenski (2013). And PowerPoints chapters 6 and 7.
? Describe some recent trends in inventory management by healthcare providers.
4. Read Chapter 9 in Gapenski (2013). And PowerPoints chapter 9
? Should financial analysis play the dominant role in capital investment decisions? Why or why not? Explain.
5. Read Chapter 10 in Gapenski (2013). And powerpoints chapter 10
? Describe a strength and weakness of sensitivity analysis and scenario analysis.
6. The purpose of this assignment is to assess your ability to:
? Analyze a potential healthcare business for measures of financial health
? Action Items
? Review Chapters 1-13 in Gapenski (2013).
? Review the PowerPoint Presentations for Chapters 1-13 in Gapenski (2013).
? Compose a 500 – 750 page paper in which you:
? Identify a potential healthcare business interest.
? Discuss what measures you would utilize to evaluate the financial health of the business/venture.
7. The purpose of this assignment is to assess your ability to:
? Provide a financial analysis of a healthcare capital investment case study.
? Action Items

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