Question

after reading and analyzing the los reyes hospital case (a) case study discuss the importance of departmental budgets and the discoveries you made from exploring the los reyes hospital case

Answer 1

Capital budgeting decisions are of fundamental importance to the success or failure of any business because a firm’s capital budgeting decision, more than anything else, shape its future (Gapenski & Pink, 2015. P. 469). In reading the case study Los Reyes Hospital, I think that Mr. Cohn was on the right track to start with preparing a budget for the four departments he had a cost analysis on. This gave him a starting point and from there he could move on to other departments within the hospital. Mr. Cohn also included the department managers in the budgeting of their department (THE CRIMSON PRESS CURRICULUM CENTER THE CRIMSON GROUP, INC)This was a good strategic move because then it made them feel involved and also aware of what their expenses were. He also present the budget in a way that would be easily understandable with the hopes that Dr. Delgado would be willing to utilize the same process for all other departments in the hospital.

Dr. Cohn with the assistance of the department managers effectively prepared departmental budges, cash flow estimate and also fixed cost estimates. This allows for a risk analysis and capital budget for the hospital to be performed. The reason this is important is because it is important for the hospital to continue providing services while improving and gaining revenue in the process.

Reference

Gapenski, L. C., & Pink, G. H. (2015). Understanding healthcare financial management (7th ed.). Chicago, IL: Health Administration Press.

THE CRIMSON PRESS CURRICULUM CENTER THE CRIMSON GROUP, INC. (n.d.). Los Reyes Hospital (A). Retrieved from http://snhu-media.snhu.edu/

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