**Please Read Attachment**
Strategy and Capital Budget Presentation
You have made great strides in financial leadership in the first few months in your new role and have done a terrific job aligning your organization around a vision of pay-for-value Healthcare.
Your success has not gone unnoticed. You have been asked by the Board of Directors whether you have any ideas for strategies that can take the organization forward in its pursuit of pay-for-value. As it turns out, you have an idea for a technological innovation you have been reading about, but it requires a significant capital investment to make it happen. You have a strong feeling that your idea could make a big difference, but you know you can’t go to the Board with just “feelings.” Your pitch must be grounded in facts and numbers; a plan that cannot demonstrate financially viable will never get approved. So, you need to present not just your strategy, but a budget to support that strategy.
Instructions
The Board has invited you to give a 5-minute presentation outlining your proposal. They want you to explain your idea, walk them through the reasons you think it’s needed, explain how it will be funded, and how success will be measured. That’s a tall order, but you’re up to the challenge!
You’ve decided to organize your presentation around a 5-slide PowerPoint deck (plus one slide for references) as follows:
1. Executive Summary: Explain the proposed technology investment and give a synopsis of what
the Board can expect in the slides that follow. Explain why this is a meaningful innovation that
takes the organization forward.
2. Data Synopsis: Identify 5 budget inputs with estimated financial details that must be considered
when evaluating this project. Examples can include (but are not limited to):
a. Additional patients served
b. Changes in staffing
c. Variance in clinical outcomes
d. Operating revenue/profit increases
e. Additional space or renovation required
3. Run the Numbers: Build and explain a budget to support the project and give a clear summary of
the relevant financial data based on the following:
a.) You have up to limited dollars to spend.
b.) The proposed capital investment must be for a technology solution. This could include things such as: health records data management tools, robotics, telemedicine, etc.
c.) You must secure a “reasonable” estimate for the costs associated with the capital expenditure. This can be accomplished through contacting vendors, speaking with your finance department or a bit of research on the Internet.
d.) You must consider a “lease versus buy” evaluation for this project. You can obtain bank loan for 100% of the purchase.
e.) 5 Years MCARS (depreciation table) must be used for this project.
f.) Identify the Net Present Value for Leasing vs Buying.
4. Reflections on Other Capital Budgeting Methods: The Board has specifically asked you to explain why Net Present Value has been used for this project versus the Payback Method, Internal Rate of Return and Accounting Rate of Return.
5. State your Financial Conclusions
a.) What is your recommendation to the Board as to whether the organization should Lease
vs Buy?
b. Are there other non-financial factors you should consider that need to be conveyed to the
Board?
c. How will the project be monitored for ongoing assessment of performance?
6. References and Citations Appendix Slide (include sources for rates, prices and other data
used in the presentation)
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