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Capital optimization: linking investment with strategic intent.
Front Health Serv Manage. 2004 Winter; 21(2):3-13.FH

Abstract

With operating margins showing some improvement in 2003, Y2K being a distant memory, and many critical capital investment decisions delayed as long as possible, hospitals have been on a relative spending spree, building new facilities, renovating operating rooms and inpatient units, and investing in new medical and information technologies. However, with pressure on both cost and revenue expected to continue, if not increase, this spending spree may be short-lived, and hospitals must improve their capital planning efforts; align them with their mission, vision, and strategies; and ensure that capital is available when unplanned or even expected needs arise. This article explores some of the challenges that hospitals face in their capital planning efforts and, more importantly, suggests the necessity for hospitals to integrate capital and strategic planning. Capital planning must be driven by an organization's strategies; however, we also argue that an organization's ability to execute its strategies is highly dependent on the existence of a cohesive capital prioritization and planning process. In this article, we explore a number of issues critical to developing a comprehensive capital plan, including estimating capital costs, evaluating and designing strategies to contend with risk, saving for the proverbial "rainy day," and recognizing the role and value of philanthropy, while challenging some conventional thinking of hospital executives with respect to investment, growth, and planning.

Authors+Show Affiliations

Navigant Consulting in Chicago, USA.No affiliation info available

Pub Type(s)

Journal Article

Language

eng

PubMed ID

15641674

Citation

Fine, Allan, and J Alex Bacchetti. "Capital Optimization: Linking Investment With Strategic Intent." Frontiers of Health Services Management, vol. 21, no. 2, 2004, pp. 3-13.
Fine A, Bacchetti JA. Capital optimization: linking investment with strategic intent. Front Health Serv Manage. 2004;21(2):3-13.
Fine, A., & Bacchetti, J. A. (2004). Capital optimization: linking investment with strategic intent. Frontiers of Health Services Management, 21(2), 3-13.
Fine A, Bacchetti JA. Capital Optimization: Linking Investment With Strategic Intent. Front Health Serv Manage. 2004;21(2):3-13. PubMed PMID: 15641674.
* Article titles in AMA citation format should be in sentence-case
TY - JOUR T1 - Capital optimization: linking investment with strategic intent. AU - Fine,Allan, AU - Bacchetti,J Alex, PY - 2005/1/12/pubmed PY - 2005/2/18/medline PY - 2005/1/12/entrez SP - 3 EP - 13 JF - Frontiers of health services management JO - Front Health Serv Manage VL - 21 IS - 2 N2 - With operating margins showing some improvement in 2003, Y2K being a distant memory, and many critical capital investment decisions delayed as long as possible, hospitals have been on a relative spending spree, building new facilities, renovating operating rooms and inpatient units, and investing in new medical and information technologies. However, with pressure on both cost and revenue expected to continue, if not increase, this spending spree may be short-lived, and hospitals must improve their capital planning efforts; align them with their mission, vision, and strategies; and ensure that capital is available when unplanned or even expected needs arise. This article explores some of the challenges that hospitals face in their capital planning efforts and, more importantly, suggests the necessity for hospitals to integrate capital and strategic planning. Capital planning must be driven by an organization's strategies; however, we also argue that an organization's ability to execute its strategies is highly dependent on the existence of a cohesive capital prioritization and planning process. In this article, we explore a number of issues critical to developing a comprehensive capital plan, including estimating capital costs, evaluating and designing strategies to contend with risk, saving for the proverbial "rainy day," and recognizing the role and value of philanthropy, while challenging some conventional thinking of hospital executives with respect to investment, growth, and planning. SN - 0748-8157 UR - https://www.unboundmedicine.com/medline/citation/15641674/Capital_optimization:_linking_investment_with_strategic_intent_ L2 - http://ovidsp.ovid.com/ovidweb.cgi?T=JS&PAGE=linkout&SEARCH=15641674.ui DB - PRIME DP - Unbound Medicine ER -