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What were Pearland Medical Center’s net income, cash flow, total profit margin, and total profit margin excluding grants and inv

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  • Post Date 2018-11-05T11:46:35+00:00
  • Post Category Essays

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What were Pearland Medical Center’s net income, cash flow, total profit margin, and total profit margin excluding grants and investments for each year?

Mechanisms for Evaluating Financial Health of Health Care Organizations

INSTRUCTIONS:

MECHANISMS FOR EVALUATING FINANCIAL HEALTH OF HEALTH CARE ORGANIZATIONS
Assignment Overview
Pearland Medical Center reported revenues of $1,500,000,000 in 2012 and $1,250,000,000 in 2013. The revenue streams comprised 25% patient self-pay revenue, 50% third-party payer’s revenue, and the remaining 25% was a combination of grants from the Grant Foundation and investments. The medical center spent $15,000,000 in marketing for each of the past two years. The average hospital daily patient census was 570 in 2012 and 470 patients in 2013; patient hospital days were 202,920 in 2012 and 171,500 in 2013. 
Pearland Medical Center reported operating expenses of $500,000,000 in 2012; but due to layoffs and reorganization, operating expenses decreased by $200,000,000 in 2013. Depreciation expense was $50,000,000 in both years. The medical center spent $20,000,000 on research and education each year. Executive administration anticipates little growth in patient population in the coming year and will likely need to invest in new equipment. The nonprofit facility pays no shareholder dividends or taxes.
Case Assignment
Create an income statement based on the scenario. Determine the financial health of Pearland Medical Center. What were Pearland Medical Center’s net income, cash flow, total profit margin, and total profit margin excluding grants and investments for each year?
Discuss your suggestions for Pearland Medical Center based on your interpretation of the income statement. Is the facility financially healthy? Should the Grant Foundation reconsider their grant? 

CONTENT:

Healthcare Finance: Mechanisms for Evaluating Financial Health of Health Care Organizations Name Course Instructor Date Background Hospitals and medical centers may either source for funds internally through revenue collected or externally through debts, donations, grants and gifts. The provision of grants tends to be competitive and funding may be limited while donations are unpredictable. Big hospitals tap into the long-term debts to access capital, but the credit characteristics of the organization influences the decision to choose debt-financing (Paterson & Telyukov, 2014). It is necessary to evaluate the need for financing to identify optimal financing options, with the leadership at Pearland Medical Center evaluating the capacity of the organization to use different funding options. Foundations look into the financial situation of medical centers focusing more on the income statements to determine how the revenue streams and expenses affect the net income levels. It is necessary for any organiz

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