White, Ph D, Chairman Medical University of South Carolina William Aaronson, Ph D Temple University Claudia Campbell, Ph D Tulane University M. Meacham Medical University of South Carolina Lydia Middleton AUPHA Bernardo Ramirez, MD University of Central Florida Lesly Wilson, Ph D University of South Carolina LT Suzanne J. Fundamental betas extend the adjustment process to include such fundamental risk variables as the use of debt financing, sales volatility, and the like. • Category 3: Expansion of existing services or markets.
Through real-world cases, it provides the opportunity to bridge the gap between learning concepts in a lecture setting and applying those concepts on the job. Like its predecessors, this book introduces readers to the basic concepts of healthcare finance, including accounting and financial management. ∞ ™ Acquisitions editor: Janet Davis; Project manager: Amy Carlton; Typesetting: Scott Miller Cover illustration by Anne Lo Casio. Health Administration Press A division of the Foundation of the American College of Healthcare Executives One North Franklin Street, Suite 1700 Chicago, IL 60606–3529 (312) 424–2800 Association of University Programs in Health Administration 2000 North 14th Street Suite 780 Arlington, VA 22201 (703) 894–0940 BRIEF CONTENTS Preface . Adjusted betas recognize the fact that true betas tend to move toward 1.0 over time. The purpose of these projects generally is to lower costs or to provide more clinically effective services.Be better prepared to deal with the multitude of issues that arise in the practice of healthcare finance. Gapenski, Ph D One North Franklin Street, Suite 1700 Chicago, Illinois 60606-3529 Phone: (301) 362-6905, Fax: (240) 396-5907 ache.org/hap Order No: 2192 FIFTH EDITION GAPENSKI Also available from Health Administration Press Understanding Healthcare Financial Management, sixth edition by Louis C. Pink, Ph D HEALTHCARE FINANCE Healthcare Finance: An Introduction to Accounting and Financial Management, fifth edition, is the latest book from the most trusted name in healthcare finance, Dr. AUPHA/HAP Editorial Board for Graduate Studies Andrea W. Therefore, one can begin with a firm’s pure historical statistical beta, make an adjustment for the expected future movement toward 1.0, and produce an adjusted beta that on average will be a better predictor of the future beta than would the unadjusted historical beta. Because Category 2 projects are not mandatory, a more detailed decision process is generally required to support the expenditure than that needed for Category 1 projects.Hilberman, Dr PH University of California-Los Angeles Diane M. Johnson, Ph D, FACHE Weber State University Ana Maria T. For more information on quantity discounts, contact the Health Administration Press Marketing Manager at (312) 424–9470. To illustrate the retention growth model, suppose Ann Arbor Health Systems has had an average return on equity of about 14 percent over the past 10 years. These decisions are more complex, so still more detailed analysis is required, and the final decision is made at a higher level within the organization.This publication is intended to provide accurate and authoritative information in regard to the subject matter covered. The ROE has been relatively steady, but even so it has ranged from a low of 8.9 percent to a high of 17.6 percent during this period. “The Link Between a Formal Debt Policy and Replacement Reserves.” Journal of Healthcare Management (May/June): 148–50. • Category 4: Expansion into new services or markets.
The statements and opinions contained in this book are strictly those of the author and do not represent the official positions of the American College of Healthcare Executives, the Foundation of the American College of Healthcare Executives, or the Association of University Programs in Health Administration. This book or parts thereof may not be reproduced in any form without written permission of the publisher. Conrad, F “Returns on Equity to Not-For-Profit Hospitals: Theory and Implementation,” Health Services Research (April 1984): 41–63. Invariably, a particularly detailed analysis is required, and the board of trustees generally makes the final decision as part of the hospital’s strategic plan. This category consists of expenditures necessary to comply with government orders, labor agreements, accreditation requirements, and so on.
Copyright © 2012 by the Foundation of the American College of Healthcare Executives. 16 15 14 13 12 5 4 3 2 1 Library of Congress Cataloging-in-Publication Data Gapenski, Louis C. Also, see the follow-up articles by Pauly, Conrad, and Silvers and Kauer in the April 1986 issue of Health Services Research. � or an excellent discussion of this position, see William O. Unless the expenditures are large, Category 5 expenditures are treated like Category 1 expenditures. This category is a catchall for projects that do not fit neatly into another category.