University Finance and Operations Report: New Life Healthcare Project

This report examines the financial and operational considerations for New Life Private Healthcare's expansion, focusing on potential locations in Norfolk and Suffolk. It analyzes regulatory burdens, compliance requirements, and associated risks within the UK healthcare sector, particularly concerning nursing home care. The report includes a detailed cost-benefit analysis, NPV calculations, and income statement projections to determine the financial viability of the expansion. It also addresses performance measurement, service measures, and risk management strategies, considering factors such as staffing shortages, patient acuity, and revenue shifts. The analysis covers key issues like rising operating costs, funding cutbacks, and the impact of Brexit on the healthcare sector, offering recommendations for navigating the complex landscape of private healthcare expansion. The report also reviews the regulatory measures and their impact on the company's operations, along with the various compliance costs, administrative costs, and regulatory costs. The report also discusses the performance measures and their importance in ensuring the company's alignment with its overall objectives.

Running head: MANAGING FINANCE AND OPERATIONS
MANAGING FINANCE AND OPERATIONS
Name of the Student
Name of the University
Author Note

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Executive Summary
The aim of this report is to identify th various regulationary burdens ,associated risks amd the
various compliances that New Life Private healthcare seek to follow while expanding their
operations in either Norfolk or Suffolk.The various compliances seek to put a challenge on the
operations of ye nursing care which the compay strive to overcome.A detailed cost benefit
analysis seeks to determine which locatinis suitable for its operations. The NPV criterion is also
found out to determine the financial viability of such proposal.A detailed analysis strives to find
out the workings of the private healthcare sector in UK and how best it can implement the
necessary regulations .

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Table of Contents
Introduction......................................................................................................................................3
Operational and regulatory measures..............................................................................................5
Regulationary burdens.....................................................................................................................6
Measure Performance......................................................................................................................7
Performance service measures.........................................................................................................9
Associated risks and their management...........................................................................................9
Manage reputational risk...............................................................................................................10
Income statement projections........................................................................................................12
NPV and Breakeven calculations.................................................................................................14
Technical analysis......................................................................................................................17
Critical analysis.........................................................................................................................18
Recommendations..........................................................................................................................20
Conclusion.....................................................................................................................................23
References......................................................................................................................................25

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Introduction
New life Private Healthcare is a private incorporated company which has recently made
great strides in the world of health care and has won a number of primary health care delivery
contracts across the UK.They have made a good market position in the healthcare industry and
are looking to challenge the market leader, Virgin Healthcare in all elements of the
market(Brown and Duguid 2017).
They are looking to expand their operation in Norfolk and Suffolk , having chosen both
of these places as possible destinations to expand their business. The property in Norfolk is under
a 25 year lease and the property in Suffolk has a property value of $120,000,000.A financial
review of both these proposals, under both NPV and payback period is evaluated to find out
which proposal is better. An income summary is also prepared to find out the financial viability
of the company.The analysis has been discussed subsequently in the following sections.
Nursing home care possesses the third largest segment in the health care industry. There
has been a growing demand for private healthcare with the increase in longevity and shifting
demographic, social patterns in the family.There is a growing need for long term care beds .This
presents the regulators with a very good opportunity to make sure that the long term future
needs of the enterprise are met.The policymakers have a clear influence on the potentially
emerging scenario of the healthcare industry(Hunter.and Murray 2015).This investment proposal
will help bring in more revenue for New Life Private Healthcare and help them in gaining more
market share.Being a new business , it has to comply with some regulations relating to
environment, tax and corporate governance(Wang et al .2015). It also has to bear the cost of
reputation, which is important in order to protect their brand value or goodwill(Lunt et al.2015).

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It needs to keep some of the associated risks and operational measures required by the company
to function effectively. Further there is a measurement of performance levels by which the
standard of performance is measured.There has been a growing trend of nursing home residents
in the private sector.Almost 76 % of all nursing home residents are now under private care(Lunt
et al.2015).The growing demand for beds have spiraled the need for private nursing home
centres and its rising demand has sparked the investment of private nursing home In the UK.
New Life Healthcare is a major proponent of the private nursing home facility in England and is
a major benefiter of that rise in demand(Bell et al. 2015).

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Operational and regulatory measures
The regulatory measures make sure that the operations and the products offered by the
company are meeting both national and international standards , thereby making sure that the
company New Life Private Healthcare is better equipped to understand what is required by the
prospective customers(Pan et al. 2015). Regulatory measures benefit from a wealth of
professional expertise.
Compliance with regulations help the business to grow in the following ways:
 Avoidance of expensive corrective costs and uncontrolled risks.
 The business comes under a layer of protection and with the help of this its reputation
can be enhanced.
 Supervisory establishments mark their inadequate funds on businesses that disobey the
rules, thereby making sure that there is an equal measure of commercial business and
encouraging a reasonable and benign return to the business(Langabeer and Helton 2015).
The OECD have pigeonholed the major focus of regulations to three areas :
a) Parameters of employment over the recruitment and removal of employees and adhering to
the health and safety standards including the providing of facilities to handicapped and
disabled people, reporting of employee data, social security information and pension rights
also including other benefits like maternity leave and sick leave(Torchia, Calabrò and
Morner 2015).

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b) environmental regulations that consist of things like licensing, product quality standard ,
environmental scanning and reporting , pollution regulator , product guidelines , record
keeping and maintaining the daily basis of administration requirements connected to the
surroundings, environmental laws and taxes(Devaux 2015).
c) Tax guidelines that cover business taxes, corporate taxes etc..
Regulationary burdens
The main costs associated with this are compliance costs, administrative costs and
regulatory costs. Compliance costs include the costs that are borne by the people who play tax or
by third parties while complying the requirements of the taxation system over and above the tax
liability itself (Marshall et al .2015). Administrative costs are the costs incurred by the official
personnel during administration in the process of taxation. The sum of compliance costs and
administrative costs are referred to as operating costs(Runciman, Merry and Walton 2017).
The Better Regulation Task Force has embraced the word “compliance cost” that consists
of the combination of both periodic and non periodic costs The RTF uses these costs as direct
costs of regulations. Periodic cost include further continuing costs for entrprises as a
consequence of staff cost regulations and time, consumable materials and inspection
costs(Muennig and Bounthavong 2016).Non periodic cost include costs such as one time
investing costs of plant and machinery, buildings and trainings.
The Cabinet Office makes a guidance on the achievement of Regulatory Impact
Assessments that needs to make a difference between policy and implementation costs. Policy
costs are those costs which can be directly attributable to the goal of polocies involved and the

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implementation cost signify the costs associated with the implementation of regulation(Anderson
2014).
The values of procedures can be calculated using two approaches
 Making people consider what they are willing to spend for regulationary changes.
 Deducing observed performance for amount truly rewarded by individual for
regulationary changes.
In addition to the regulationary burdens , there are other key issues affecting the UK healthcare
sector like the rise of operarting costs, cutbacks to local authority funding and more recently the
introduction of both the NLW and the work place pension, nursing shortage and Brexit are some
key issues plaguing the UK healthcare sector. There is an incessant burden for governments to
slash budgets for private nursing care which cuts back private funding as well(Xue et al.2017).A
removal of local funding led nursing homes to look for altenative source of private funding.The
government’s social care council tax principle allows councils to increase council tax in the areas
by 2 percent per annum to fund private health care(Morgan, Ensor and Waters 2016).Also in
light of the recent treatment shortage, drvien by reducing UK student nursing places, reduced
spending of government , immigration issues places more barriers to complement the use of
workforce through the use of more affluent workforce.The CQC determines the ratings for
carehomes and if a care home fails to report minimum industry standards the CQC has the
power to rescind their license and suspend their operations(Smee 2016).
Measure Performance
A growth business needs to be managed with care to make sure that the new investment
proposal makes sure of the decisions and expansion plans. Putting performance measurement

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systems in track is an effective way of making sure that the concerned business is in line with its
overall objectives(Xue et al.2017).It gives dynamic information about what is happening in the
present and also delivers the point of origin for a system of setting targets that will most likely
implement growth plans. Performance measurement and setting target are critical to the process
of growth(Morgan, Ensor and Waters 2016).THE benefits of performance measurement are
knowing how the business is performing by considering the valuable information. A good
performance measurement will also figure out the performance changes.This enables us in a
better position to manage performance in advance(Smee 2016).
A good nursing facility is largely impervious to differences among the residents
populating different hospital beds.Such an indicator would vary with differnces in the quality of
care provided by the nursing home.Unfortunately for a variety of reasons such indicators are
limited in number in case of a nursing home(Yang and Zou 2014).There are often instaces of
mishaps like fire or medication errors due to insufficient data.Such instances limit the operational
performance of nursing home and capture the general constructs of nursing home quality(Bahri
et al.2015).
The performance measurement systems of nursing homes are almost universal. The vast
mainstream of these systems hope to rank instruction of all nursing homes based on numerical
quality measures. However, the aptitude of such systems is to ascertain homes opposing in
quality is hindered by the multi dimensional nature of nursing homes and their residents. As a
result, there remains a doubt of the capability of many nursing home performance systems to
help consumers discriminate among homes based on varying levels of quality(Smee 2016).For
consumers, performance measurement models pose a better solution at identifying problem
facilities than potentially good homes.

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Performance service measures
It is very important to get the performance measurement indicators right. The focus should be
on key business drivers .This business should focus on the following key drivers are:
 Staffing- There has been an unprecedented shortage of health care personnel in the last
few years. Considering this shortage, there will be a shift of health care personnel from a
private doctor to a more central base team care(Gao 2015).
 Acuity- Patient acuity, a performance measure that measures the intensity of nursing
personnel required while the total bed counts are declining. This rise in acuity indicates
that the patients live longer due to better health care services provided with a range of
moderate to severe health care conditions.( Yang and Zou 2014)
 Shift in revenue-Health care services need to step it up to provide a more aesthetically
pleasing service, instead of providing just the basic health care services. (Bahri et
al.2015)
 Patients as Consumers- Patients are service acquirers looking for service overs
status.the modern status of the patient is that of the customer. Their should be an urgent
retail care center in case of an emergency. The growth of retail clinic shows further
evidence that the customer wants options and more convenient options(Emberson,. and
Trautrims 2017).
Associated risks and their management
Some of the associated risks that need to be kept in mind while managing a nursing
home are:

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 Falls- A slip by any resident in the nursing home
 Nutrition- A basic provision of nutritious food and drink should be provided to the
residents.There should be an increased monitoring, including keeping tabs on individual
patients , especially to patients on critical conditions(Hirth and Huang 2015).
 Sanitation- Maintaining clean and well kept sanitary facilities and also making
provisions in order to contain infectious bacteria and germs.
 Medical care- There should be a proper management of medication and keeping a close
watch on drug related problems including over dosage and under dosage problems(Bos
and Harrington 2017).
 Employee liability- There should be a strict code for employee conduct to adhere to the
employees rulebook and keeping the patient safety standards in prime
condition(Konetzka, et al.2015).
Manage reputational risk
The company’s reputation is one of its biggest assets.it needs to be effectively managed ,
so that no other business can take misuse that reputation . So it becomes very important to
protect that risk(Huang and Hirth 2016). There are some things that the company can do to
protect its reputational risk. They include:
 Start monitoring reputational risk-To monitor reputational risk , the business need to be
proactive. The business should anticipate that there is a possibility of risk lurking around
in every corner. So, to prevent that from happening they should start mining the data they
have gathered from sources including data acquired through customer feedback, financial
statements and software audits etc(Grabowsk et al.2015).

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 Build reputational risk reporting to governance-The reputational risk should be combined
with the corporate governance report. Awareness of this type of risk will help in
curtailing risk management during the decision making process(Godin et al. 2015).
 Allocate resources- Most executives believe that their company is spending an adequate
sum of money on reputation management. However there are some respondents who
believe that the company is not spending enough on resource allocation. There should be
a separate budget that remains available for resource allocation (Rondas et al. 2015).
 Conduct a reputational risk audit-In other cases, the company can bring in a separate third
party to conduct a reputational risk audit, to assess the reputational risk that the company
could be in(Tao 2015).This audit will analyse both the internal and external data and
form an independent assessment and opinion as to the status of the reputational
risk(Cherry and Jacob 2016).