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Student housing project completed recently at Research Hospital and Medical Center in Kansas City, Missouri, cost one-and-one-half million dollars. To adapt to a changing medical environment, hospital trustees and managers are continually striving to mod-ernize existing facilities to provide new services. Usually this modernization process evolves over a period of years and only rarely does a hospital undertake a sig-nificant capital expansion program. Consequently, when it becomes necessary to expand, even the most experi-enced and sophisticated hospital managements and boards find themselves unprepared for planning, de-signing, financing, constructing, and equipping an addi-tion to their facilities. Since most hospital board mem-bers serve in a part-time capacity and have careers of their own which require attention, the careful and de-tailed planning which should be completed before at-tempting to finance and construct hospital expansions often is not given sufficient attention. A hospital's expansion program usually begins with the observation that the historical utilization rate has been high and therefore an addition to the bed-comple-ment is needed. The parameters for an expansion plan are then developed, reviewed, and adopted by the board. Next, an architect is commissioned to prepare a set of plans for the addition of a certain number of beds. When the architect has completed his assignment and estimated the construction costs, only then does the board focus on the financing aspect of the problem. At this point, the goodwill of the hospital board mem-bers is called upon to assist in the financing. But how often is an orderly examination of the financing alterna-tives made with an analysis of the pros, cons, and costs of each method? Operating plans and projections are usually prepared to satisfy the minimum requirements set by the favored lender. But how often are such projections used in plan-ning the expansion itself? Heretofore, the unnecessary costs associated with such an ill-conceived expansion program have been re-covered from third-party reimbursement agencies and 23
Object Description
Title |
Financing hospital expansion |
Author |
McCormack, Robert C. Presby, J. Thomas |
Subject |
Hospital buildings -- Design and construction -- Finance |
Office/Department |
Touche Ross. New York Office |
Citation |
Tempo, Vol. 18, no. 3 (1972/73, winter), p. 23-26 |
Date-Issued | 1972/73 |
Source | Originally published by: Touche Ross, & Co. |
Rights | Copyright and permission to republish held by: Deloitte |
Type | Text |
Format | PDF page image with corrected OCR scanned at 400 dpi |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Library. Accounting Collection |
Date-Digitally Created | 2010 |
Language | eng |
Identifier | Tempo_1972_Winter-p23-26e |