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Transcript of HCS405
2009 (Projected) 2009 (9 months data) Variance
Net Patient Revenue 447,805 459,900 3%
Other Revenue 3,225 3,082 -4%
Total Revenues 451,030 462,982 3%
Salaries and benefits 220,553 220,752 0%
Supplies 73,487 74,584 1%
Physician and professional fees 110,277 110,376 0%
Utilities 1,222 1,200 -2%
Other 1,838 1,840 0%
Depreciation & Amortization
(non-cash expenses) 29,946 36,036 20%
Interest 3,705 3,708 0%
Provision for doubtful accounts 14,721 13,797 -6%
Total Expenses 455,749 462,293 1%
Operating Income (4,719) 689 P
Non-operating Income (Loss)
Investment Income 304 (62) -120%
Net Income (4,416) 627 P Sensitivity Analysis HCS/405 Questions? Comments? Concerns? Topics of Presentation Comparative Analysis for Previous Years Budget Assumptions and Changes Forecast for Near Future Trend Analysis Staffing Budget Comparison (In 1000's) 2008 %Change 2009
Net Patient Revenue $418,509 7% $447,805
Other Revenue 2,805 15% 3,225
Total Revenues $421,314 7% $451,030
Salaries and benefits $214,129 3% $220,553
Net Income ($15,846) 28% ($4,416) Factors that resulted in changes Patient Care Revenues Increased Settlement of Managed Care Contracts Limited increase in expenditures New Equipment Discounts Effective Loan Attainment Accounts Receivable Pay Off Increase Improvements Over Time New equipment for outpatient facilities and usage that will increase revenue Substantial decrease of agency nurses, thus eliminating not needed costs More effective use of available monetary funds and resources Better marketing strategies resulting in more charitable donations and patient visitation Operating Budget Variance Report
(2009) Things that should have been done differently No distribution of annual profits (especially early in year) Limited or no bonuses for CEO and CFO Hold on dividends for physician owners Better research of investment and expenditure strategies Nurse to Patient Ratios A problem in every hospital nationwide Result of nursing shortage Budgetary and salary issues State guidelines Affect patient care and outcomes Revenues
Net Patient Revenue
Patient revenue will continue to increase -but at a decreased rate (3%) - with little or no increase in patient volume, due to new managed care contracts.
Other revenue is projected to increase by 15% based on Marketing's plan to increase donations by 15%.
Salaries and benefits
Salaries will hold to a 1% overall increase in cost due to price "deflation" nation-wide, with no increase in labor hours (due to no increase in patient volume). This assumption could be affected by a board decision to either raise nursing wages by $1 per hour or to increase the nursing hour ratio.
Supplies cost will decrease 3% due to the price deflation and our current over-stock purchased last year.
Physician and Professional Fees
Contracts for fees have a built-in 3% increase.
Utilities cost will increase 5% due to the rising cost of oil partially offset by the efficiency of the hospital's new heating and cooling systems.
No net change in the cost or volume of these items.
Depreciation & Amortization (“non-cash” expenses)
Some high-cost equipment (air conditioning, telephone system, all patient beds and head walls) were replaced in 2009, and "depreciation" rose sharply. Depreciation will remain at this level in 2010 so no projected increase.
The repayment plan for any monies borrowed in 2009 will come due in 2010, with a sharp increase (30%) in interest cost.
Provision for Doubtful Accounts
The renegotiation of Managed Care plans has delayed collection and made collections less certain. We will assume a 10% increase in doubtful accounts.
Non-operating Income (Loss)
We do not expect to have any non-operating income or loss.
Investment Income (Loss)
The Market is down, expected to hold steady, so a "zero" return is expected, with neither losses nor gains. Assumptions for Long and Short Term Goals Nursing Staff Statistics (2009) Analysis for Staffing Changes Termination of Staff Nurses Salary Increase vs Staff Hiring Rules and Regulations Medical vs ICU vs Outpatient Full-Time vs Part-Time vs PRN Allied Healthcare Staff Trend Analysis Looks at current financial situation Assumptions and Predictions for Future Based on current world events and
stock market conditions Comparison with other similar entities Based on needs of the company and
potential outcomes Not always accurate Significant Difference in Salary Raise vs Changing Ratios Should Be Voted On by The Board of Trustees Research Analysis by Nurse Surveys Alignment of Strategic Goals vs Realistic Achievement Patient Satisfaction and Outcomes eferences US Health Care Inflation Rate:. (2012). Retrieved from http://ycharts.com/indicators/us_health_care_inflation
_rate STROM, S. (2008, June 23). Increase in Charitable Giving
Dampened by Signs of Belt-Tightening . new york times.
Retrieved from http://www.nytimes.com/2008/
06/23/us/23giving.html?_r=0 Current Inflation Rates: 2002-2012. (2013). Retrieved from http://www.usinflationcalculator.com/inflation/current-inflation-rates/ Baker, J.J., & Baker, R.W. (2011). Health care finance: Basic tools for nonfinancial managers (3rd ed.). Jones & Bartlett. University of Phoenix. (2013). Patton-Fuller Community Hospital Virtual Organization. Retrieved from University of Phoenix website. Apollo Group. Staffing Trend Plan Seasonal Fluctuations Allow More Vacation Time Cross Train Personnel Guide Employees Towards Outpatient Clinics During Slow Times Maintain Employee Morale and Welfare Promote and Bonus BoBa Kim John