Finance in brief : six key concepts for healthcare leaders /
Kenneth Kaufman.
2nd ed.
Chicago : Health Administration Press, c2003.
xiv, 154 p. : ill. ; 26 cm.
1567931952 (alk. paper), 9781567931952 (alk. paper)
More Details
series title
Chicago : Health Administration Press, c2003.
1567931952 (alk. paper)
9781567931952 (alk. paper)
catalogue key
Includes bibliographical references (p. 147-151).
A Look Inside
This item was reviewed in:
Doody's Reviews, August 2004
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Table of Contents
Prefacep. ix
Introductionp. xi
Why this book?p. xi
What is in the book?p. xii
'Round and 'Round in the Circle Game: Managing the Capital Cyclep. 1
Why do leaders and trustees of healthcare organizations need to worry about the principles of corporate finance?p. 2
What is the capital management cycle?p. 4
Why is capital cycle management important to my healthcare organization?p. 4
What is capital structure?p. 6
Who is responsible for managing an organization's capital structure?p. 8
Why do so many organizations fail to achieve their financial goals?p. 9
How can healthcare leaders cure these financial management pathologies?p. 11
What are the characteristics of financially successful organizations?p. 12
What's My Line? Analyzing and Boosting Creditworthinessp. 15
Why is creditworthiness important to my healthcare organization?p. 15
What factors are influencing access to capital in the current healthcare environment?p. 18
What are the key determinants of creditworthiness? What do credit agencies review to determine an organization's credit rating?p. 21
What financial factors affect creditworthiness?p. 28
What factors lead to credit rating upgrades or downgrades?p. 28
How do we perform a financial credit analysis?p. 31
What are the key strategies for credit fitness?p. 35
What is the take-home message about creditworthiness?p. 36
Follow the Yellow Brick Road: Financial Planning in the New Healthcare Environmentp. 39
What is financial planning and why is it important to my healthcare organization?p. 40
Who is responsible for financial planning?p. 41
How does the financial plan relate to the organization's strategic plan?p. 42
What is included in a good financial plan?p. 46
What is the first step of the financial planning process?p. 47
What are the next steps of the financial planning process?p. 47
How do we estimate capital requirements? How much should we be investing?p. 48
How do we determine other capital uses on the left side of the equation?p. 49
How do we determine capital sources on the right side of the financial planning equation?p. 50
What happens when we put it all together?p. 51
How do we determine the level of profitability necessary to close the cash shortfall?p. 51
How do we test the reasonableness of the projections?p. 52
How can my organization enhance the effective implementation of the financial plan?p. 53
Case Example: Credit Analysis and Financial Planning in Practicep. 54
Hazards Ahead: Using "Painless" Simulation Analysis to Improve Financial Decision Makingp. 69
What is the difference between risk and uncertainty?p. 69
What are some important sources of risk?p. 70
Why should healthcare executives understand risk and uncertainty?p. 71
What shift in thinking is required for effective risk analysis?p. 72
What elements should be built into a financial model?p. 73
What is simulation and how can it be used to analyze uncertainty?p. 73
How can healthcare leaders put this approach into practice?p. 74
Example: An analysis of the achievability of an annual operating budgetp. 74
How might simulation be used to aid capital planning?p. 78
How else can simulation analysis be used?p. 81
Chapter Glossaryp. 83
Spending the Dough: Allocating Capitalp. 85
What is capital allocation and why is it important to the healthcare organization?p. 85
How does capital allocation differ from capital budgeting?p. 86
Who is responsible for the capital allocation process?p. 87
What approaches typically have been used to allocate capital and what can we learn from these?p. 87
What are the characteristics of a healthcare best practice capital allocation process?p. 89
What are the benefits of a one batch capital allocation process?p. 92
How do we ensure successful implementation?p. 93
What factors are key to the process design?p. 93
How do we define the capital constraint?p. 94
What factors are key to a successful rollout?p. 95
What governance factors are key to success?p. 97
What time frame can we expect for implementation?p. 97
How do we evaluate implementation progress?p. 97
Can and should the process evolve and change over time?p. 98
What are the specific goals of project analysis?p. 99
What factors should be considered as the first steps of project analysis?p. 100
What quantitative techniques can be used to analyze a potential investment?p. 101
What values must be known to perform a net present value analysis?p. 102
How do we select projects?p. 104
Case Example: Capital Allocation in Practicep. 107
Strategic Budgeting: A Healthcare Imperativep. 119
What is strategic budgeting and why is it important?p. 119
How does the typical approach to budgeting differ from strategic budgeting?p. 120
How does strategic budgeting fit into the financial management cycle?p. 122
Who is responsible for strategic budgeting?p. 122
What are the key steps of strategic budgeting?p. 123
What provides the initial impetus for the strategic budgeting process?p. 123
How do leaders gain organizationwide buy-in to identified operating targets?p. 124
How do the specific targets of the financial plan drive initial budget development?p. 125
How do department managers perform the first pass budget review?p. 126
How is the budget finalized?p. 127
What happens to the budget following finalization?p. 127
How long does it take to complete the full strategic budgeting process?p. 128
What tools are critical to best practice strategic budgeting?p. 129
What are the benefits of strategic budgeting?p. 130
Case Example: Strategic Budgeting in Practicep. 131
Concluding Comments: Corporate Finance: A New Management Paradigm for Healthcare Organizationsp. 141
Selected Bibliographyp. 147
About the Authorp. 153
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