HCM 400 Final Project

Southern New Hampshire university

Healthcare is impacted by several factors today. Demographic changes, insufficient

preventive care, and legislative changes are some of the factors contributing to the problem.

Demographics play a crucial role in health care policy. Many people live far away from the

nearest hospital or health care facility in rural areas. Further, rural residents often lack access to

affordable healthcare, which could lead them to delay seeking medical assistance until they are

forced to do so, by which time they could be too ill to survive. This brings us to another factor,

the lack of preventive care. A large proportion of rural residents do not seek medical care for

preventative maintenance, and a large proportion of those with access to healthcare does not seek

preventive care. The healthcare system is still reactive rather than initiative-taking, as many

patients do not seek medical attention until they have felt symptoms for at least two to three

weeks. Changing regulations has also been a driving force over the past few years, whether

related to Medicare or private insurance. It has resulted in a reduction in health care expenditures

(Team, 2020).

Impact of Forces

In rural areas where there are few or no health care facilities or hospitals, patients living

with chronic illnesses cannot receive the proper medical care they require. Within the rural

communities, some changes have been made. Many hospitals establish Urgent Care centers or

smaller satellite branches to provide patients living in these communities with medical

services. Several other reasons contribute to the lack of access to medical care in rural areas.

Residents lack the finances to pay for a physician's visit, and some cannot even afford the co-pay

if they can afford the health insurance premium. Furthermore, so many people are dying in these
rural areas at such a young age. In some cases, patients cannot afford the medications, which

inevitably results in an increase in their condition rather than a decrease (Team, 2020). 

Opportunities

  To support HCA Healthcare Inc's long-term success, many opportunities exist that can be

leveraged to fulfill the organization's mission, vision, and values. A significant thing that can

affect the capital budget is a change in the number of cash donations the organization gives out.

It is a great way to give back to the community, but it does not necessarily offer medical

treatment to the community for which this organization was created. In providing support to the

community, donating money to charity is not equivalent to the degree of support that HCA

Healthcare Inc is striving to provide through its mission, vision, and values. The organization

commits to delivering high-quality, cost-effective healthcare to its employees, patients, and

community members (Our mission and values).

Healthcare is a necessity for human existence so long as humans can acquire diseases,

illnesses, and ailments, making it imperative that a healthcare organization strives to provide the

best care possible for patients within a competitive environment. If we look at the broader picture

of health care, the economic climate has already altered the availability and delivery of

healthcare since the Affordable Care Act was passed. HCA Healthcare Inc. could provide more

cost-effective and efficient care to the community if they used some charitable budgets on budget

areas that showed a deficit the previous year. The organization's desire to be committed to the

improvement and care of human life could be satisfied while at the same time upholding its

values and goals (Our mission and values). 

Proposal
  The organization has a deficit due to recovery after natural disasters in 2017. I propose a

reduction in the charity budget to offset the debt. Considering that the amount of insurance

assistance that the organization will receive is yet to be known, it is crucial to develop an

appropriate capital budget. Furthermore, a healthcare provider's general objective is to provide as

many services as possible with their resources (Walsh, 2016).

 The organization does not believe it would be appropriate to donate the same amount to

charity this year because it does not have sufficient funds in other areas. Despite reducing cash

donations, charity initiatives can still be conducted through discount clinics or free clinics at an

organization's existing facilities. The organization will still be able to fulfill its mission, vision,

and values by offering discounted or free services to the community while maintaining financial

stability during the 2018 fiscal year. As a result of the decline in revenues between 2016 and

2017, the organization should establish an optimal capital budget (Walsh, 2016).

Financial and Budgetary Considerations

 HCA Healthcare Inc. will develop urgent care centers as part of the proposal. The

company can capitalize on an additional market segment growing within the healthcare market

over the last few years by taking this strategic step. Proper planning, policies, and procedures are

essential for this expansion to be financially beneficial to the organization. To ensure that the

increases do not negatively impact the current facilities within HCA Healthcare Inc., the

organization must plan for the rise in advance. 

A. Financial Statements

  This proposal will include the following financial statements: balance sheets, contractual

obligations, and commitments, as well as cash flow statements. A balance sheet will enable the
organization to understand better its financial position, including what the organization owns and

owes and how much investment is being made by its investors. An organization’s contractual

obligations and commitments will demonstrate the extent of its present financial obligations. A

cash flow statement will provide the organization with a clear understanding of how adding a

new facility will affect cash flow, detailing what will contribute to an increase in cash and cash

equivalent equity (Surbhi, 2018).

B. Proposal Impact

As this proposal will impact its financial statements, it will be a long-term investment.

This investment is expected to increase the organization’s revenue. However, the cash flow is

likely to decrease during the startup phase. On the other hand, the organization’s assets are

expected to increase. Thus, the organization can expect long-term benefits from the investment,

experiencing the total value of the new building after a more extended period.

C. Flexed Versus Fixed

 Fixed budgets are those which remain consistent despite changes in activity levels.

Accordingly, a fixed budget is established based on a standard production deck. As a result, a

flexible budget can be described as one created to accommodate different production levels or

capacity utilization. In other words, the budget changes depending on the level of activity. A

budget based on assumptions is unrealistic and impractical, whereas those based on flexibility

are realistic and achievable. Since the organization’s future operating costs will likely differ from

its startup costs, HCA Healthcare Inc. should apply a flexible budget to its expansion into the

urgent care market. In the first year, operating the new facility is expected to increase
expenditures. Therefore, a flexible budget is essential to adjust accordingly once revenues have

accumulated and patients are beginning to seek treatment (Surbhi, 2018).

III. Proposal Justification

A. Ratio Selection

This proposal will be justified based on the operating margin and current ratio. Using the

operational margin eliminates the influence of non-operating income from the company’s

primary business line. A current balance estimates how much cash income would be provided for

every $1 of current liabilities if current assets were liquidated at book value. Based on these

ratios, the organization will be able to gauge its current position based on its existing facilities

and identify potential opportunities for growth in the urgent care sector. To determine whether an

organization can achieve its goals, it is essential to clarify its current liabilities. This proposal is

expected to generate enough positive revenues to mitigate the current liabilities. A high current

ratio indicates that the organization can meet its obligation to pay off its debt (Gapenski & Pink,

2015).

B. Ratio Results

Operating margin = Operating Income

Total Operating revenues

2,216/ 47,653 = 0.047

Current Ratio = Current Assets

Current Liabilities

$37,557/ 33,760 =1.11 (Form 10-K, n.d.-a)

The ratios indicate that the organization is in the proper financial position to undertake

the proposed urgent care facility. According to this proposal, there will be a short-term fiscal

impact due to increased liabilities. However, additional penalties are required for the

construction of the building and the purchase of equipment needed to improve the performance

of urgent care facilities. Overall, however, the assets obtained by the organization will increase

revenues and provide the potential for future growth if the organization continues to develop in

the current direction. This has a positive impact on the organization’s finances overall. An

analysis of the financial statements and ratios provided should demonstrate that the proposed

urgent care facility will benefit the organization (Gapenski & Pink, 2015).

Closing Statement/ Conclusion

Added Value

Based on these ratios, the organization appears to be able to develop a financially sound

urgent care facility. Based on the organization's 10-K form, it is evident that the ratios above are

significantly higher than those acquired the previous year. This proposal indicates that although

there may be a short-term deficit impact due to the increased liabilities, it is necessary to incur

these liabilities to expand into the urgent care arena. Although overall, the assets gained by the

organization will eventually enhance revenue and provide an opportunity for future growth if the

organization follows its current course. Consequently, the impact on the organization's finances

over the long term is favorable. 

urgent care facility is in the organization's best interests. In response to this decrease in charitable

donations, the organization will increase its cash flow to establish urgent care facilities that will

increase its revenues in the future. Due to these circumstances, the proposal offers the

organization a means to restore its financial stability following a year of deficits brought about

by unforeseen events about this year's natural disasters.

Financial Justification

 HCA Healthcare Inc. will have the opportunity to make a favorable financial decision

based on the organization's mission, vision, and values and grow to offer an upcoming healthcare

service it does not currently provide. It also allows the organization to move forward without

knowing how much money it will receive from insurance payments related to past events. This

proposal will facilitate a shift towards managed care as the future of healthcare continues to shift

towards managed care models, which will allow the organization to expand its current service

offering.
References

Gapenski, L. C., & Pink, G. H. (2015). Understanding healthcare financial management (7th

ed.). Chicago, IL: Healthcare Administration Press.

Form 10-K. (n.d.-a). SEC. Retrieved April 09, 2022, from

https://www.sec.gov/Archives/edgar/data/860730/000119312518056057/

d490041d10k.htm

Surbhi, S. (2018, July 26). Difference Between Fixed Budget and Flexible Budget (with

Comparison Chart). Key Differences. Retrieved April 9, 2022, from

https://keydifferences.com/difference-between-fixed-budget-and-flexible-budget.html

Our mission and values. HCA Healthcare. (n.d.). Retrieved March 15, 2022, from

https://hcahealthcare.com/about/our-mission-and-values.dot

Team, M. (2020, July 9). Patient Demographics: How They Can Improve Care. MindSea: App

Design & Dev Agency, Focusing on HealthTech. Retrieved March 10, 2022, from

https://mindsea.com/patient-demographics/

Walsh K. (2016). Managing a Budget in Healthcare Professional Education. Annals of medical

and health sciences research, 6(2), 71–73. https://doi.org/10.4103/2141-9248.181841