Elijah Heart Center

Elijah Heart Center (EHC) is a hospital based in New York that holds 140 beds and specialized cardiac catherization laboratories, provides surgical sites for open heart surgeries, necessary equipment for radiology, laboratory, nephrology, pulmonary, and other services that are needed to provide support to all cardiovascular patients. However, EHC is having financial problems. This paper will create an alternative working capitol policy to help to reduce future difficulties for EHC. Included in the policy will be alternative sources of short-term financing. Explain how accounts receivable and inventory has an effect on the business policies of EHC, review the cash conversion cycle, provide recommendations to reduced future risks, and provide recommendations to make EHC a better hospital in the future.
There are varieties of short-term financing that are available to EHC. Improving the cash flow is necessary and to do that EHC is going to have to implement the correct cost cutting measure that will not have a negative effect on patients and patient care, while saving as much money as possible. EHC has set a goal of $900,000 savings this year. EHC will also be receiving a quarterly payment of $2,300,000 from Medicare and other managed care companies. Reducing Agency staffing and hiring an untrained assistance to help the trained employee (nurses) to handle some of the less important tasks will save EHC $3,515,134 this year, and will only have a slight effect on their patients. This far exceeds the goals set forth by EHC and will end the cash flow issues.

Accounts receivable affects the financial stability and growth of an organization. Accounts receivable is the payments from the patients for services rendered. The incoming money must be received within a reasonable time, if not EHC will not have sufficient money to pay their bills, this will place EHC in the negative.   In health care, accounts receivable is an issue because patients do not pay their bills in...