capital management – abc community hospital
The four stages of capital decision making process are: identify the need, analyze the investment, approve the project and monitor results.
For-profit healthcare facilities typically make decisions based on profit potential, while non-profit healthcare facilities focus more heavily on patient care needs. In terms of identifying the need for a capital investment, for-profit facilities tend to prioritize projects that will maximize profits and limit expenditures. Non-profits however may prioritize investments that improve patient care quality or access to services.
When it comes to analyzing an investment, both types of organizations consider elements such as return on investment (ROI) and payback period; however, non-profits may also factor in how an investment could improve overall patient outcomes or increase access to medical care for underserved populations.
In terms of approving a project, for-profit healthcare facilities often look at financial performance metrics such as internal rate of return (IRR). Non-profits may also consider these metrics but may take into account additional factors such as impact on patient care quality or community benefit when making final decisions.
Lastly when monitoring results both types of organizations track ROI and other key performance indicators (KPIs) but non-profits are likely to also track outcomes related to patient safety and satisfaction which can have a direct effect on reputation and long term sustainability.