Capital Budgeting Forecast

Capital budgeting are used to forecast expenses. Those expended are usually expected to provide benefits to organization during a specific time frame (Cleverley, Cleverley and Song, 2012, p.517). Health care budgeting is very crucial because of the rise in the health care cost. Without good capital budget health care industry will have cost that they will not be able to cover. According to Business and Health, capital budgeting is "analyzing investments that involve cash flows that have been paid or received over a specific period of time. The best solution for healthcare facilities is normally the one that offers the best cash flow rate over time (2012, para.2).

There are couple of ways to forecast capital budgeting in health care industry. The first way is to stay informed on current politics. Health care capital budgeting could be complicated due to the competition and good attention need to be paid when it comes to the selection of funds especially because politics can play important role when this choices are made. For example, federal and state funds depend on politics. Also, Medicare and Medicaid reimbursements depend on current politics. The second way is to monitor and watch closely employees turnover rates and find solution. Hospitals should have daycare facility for all staff. Turnover rates could be very costly for hospitals and with the day care facility a lot of qualified health care professionals could be drawn in the hospital that has day care. This solution may not necessarily increase hospital revenue, but it sure could save a lot of money to the hospital.


References:

Business and Health. (2012). Capital budgeting in the healthcare industry. Retrieved on May 3, 2015 from http://www.businessandhealth.com/capital-budgeting-in-the-healthcare-industry.html

Cleverley, W.O., Cleverley, J.O., & Song, P.H. (2012). Essentials of health care finances. (7th ed.). Sudbury, MA:Jones & Bartlett Learning.