Certified Healthcare Leader (CHL) Exam 2025 – 400 Free Practice Questions to Pass the Exam

Capital expenditure in the context of healthcare facilities refers to the costs associated with acquiring or improving long-term assets. This typically includes expenditures on facilities, major medical equipment, and other significant assets that are intended to provide benefits over a longer period, often extending beyond one fiscal year.

Investing in capital expenditures is crucial for healthcare organizations as it allows them to enhance their capabilities, improve patient care, and maintain competitive advantages within the healthcare industry. For example, acquiring advanced imaging machines or renovating a hospital wing are actions considered to be capital expenditures because they involve significant investment aimed at improving the facility's service capacity and infrastructure.

In contrast, the other options focus on operating expenses or temporary costs, which do not directly relate to the acquisition or enhancement of lasting assets. Operational costs are associated with running the facility on a day-to-day basis, temporary labor costs relate to staffing needs that are not permanent, and upgrading medical equipment may involve capital expenditures but is too narrow to represent the broader definition of capital expenditure itself.