An analysis for capital expenditure decisions at a Naval Regional Medical Center
Doyle, Martin Edward, III
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This thesis addresses the problem encountered by non-profit medical centers in formulating budgets for capital expenditure decisions. Using Naval Regional Medical Center (NRMC) San Diego as an example a benefit/cost model was developed. The costs used in the authors analysis were those that were considered to be relevant and incremental. The benefits derived were a composite weighting of four factors determined from a survey of the chiefs of service at NRMC San Diego. These four factors are utilization rate of equipment, life-saving potential, greater dependability of service and better diagnosis and evaluation of patient needs. The composite rating was then extended over the estimated economic life of the equipment and divided by the net cost to determine an index of service. Finally, equipment proposals were ranked by index of service. This model was determined by the author and senior hospital administrators to be very useful in tentative ranking of equipment proposals.
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