Module 5

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Rural Hospital in Florida Module 1

Marion Allen

Rasmussen College

Financial Management of Healthcare Organizations

August 14th,2021

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Healthcare Organization

AdventHealth is a healthcare organization located in Altamonte Springs, Florida. The faith-

based hospital was founded in 1973 by a team of Adventist medical pioneers. The hospital was

launched at a time when the United States was facing many harmful illnesses. The founders

believed that good care does not only treat the body but helps in healing the mind and spirit.

AdventHealth has over 45 satellite campuses in nine states, including Colorado, Missouri,

Wisconsin, Georgia, and Illinois (Finelli, 2021). The healthcare organization has received

numerous awards for its continued support to the people and the community; they include the

Gallup Great Workplace Award and Healthcare's Most Wired Award. AdventHealth's mission is to

necessitate a continuum of quality care that exceeds expectations.

Financial challenge

Most hospitals in Florida have been hit hard by the Covid-19 epidemic, and AdventHealth

is not exceptional. According to American Hospital Association (AHA), AdventHealth is one of

the many hospitals in Florida heavily impacted by Covid-19, suffering a loss of close to $265

million. Although the institution is one of the beneficiaries of the Coronavirus Aid Act released by

the government, the hospital needs more money to offset debts and ensure full resumption. The

decline in elective procedures and surgeries has had a profound impact on the hospital. In March

alone, the institution saw revenue shortfalls of $ 61 million (Kim et al., 2021). The decline in

income has resulted in low procurement of personal protective equipment, which is crucial when

dealing with Covid-19 patients. As of May 2021, the hospital needed additional revenue to

withstand the epidemic while also necessitating much-needed care to patients suffering from heart

failure, heart attacks, and other chronic conditions.

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Extent of vulnerability

The implications of this particular financial challenge are severe. In this case,

AdventHealth might be forced to lay off some of its employees because of the financial crisis the

institution is facing. As of June 2021, the institution was huge in debt, and the institution's

management does not appear to have any solid strategy to solve the crisis. The other implication is

the closure of some of its major satellite campuses. Currently, the institution faces a significant

financial crisis, and running many satellite hospitals would be unfeasible. Even with Covid-19

vaccines, new variants of Covid-19 that appear to spread faster are already being reported in

different parts of the world, intensifying the uncertainties and future potential impacts of the virus

on the institution.

Financial initiative

I firmly believe that AdventHealth's situation could be turned around. Currently, the

institution is facing one major problem, a financial crisis. To solve this problem, the institution

needs to consider long-term financing. Now, AdventHealth is on the brink of shutting down some

of its satellite campuses, which are a source of revenue for the hospital. Long-term funding will be

beneficial to the organization as it will conserve AdventHealth's operational cash flow and limit the

institution's exposure to interest rate risks. A long-term loan will provide AdventHealth with an

opportunity to solve its financial problems and to stand again on its own (Mustafina et al., 2020).

In this case, the organization may decide to use the loan to make capital improvements, pay its

employees and make more purchases. Long-term financing also reduces refinancing risks that are

associated with short-term funding because of its fixed interest rate.

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References

Finelli, M. (2021). AdventHealth Research Institute.

Kim, K., Ghorbanzadeh, M., Horner, M. W., & Ozguven, E. E. (2021). Identifying areas of

potential critical healthcare shortages: A case study of spatial accessibility to ICU beds during the

COVID-19 pandemic in Florida. Transport Policy, 110, 478-486.

Mustafina, A. A., Kaigorodova, G. N., Pyrkova, G. K., Alyakina, D. P., & Kamalova, A. A.

(2020). MANAGEMENT OF LONG-TERM FINANCING IN A COMPANY. 1, (5), 1-

8.