Financial Management for Public, Heal and Not for Profit Organizations, Case Study Example

The resource of team work should be applied in the composition of a hospital budget. The financialoutlook projection for each of the departments usually has the potential of being composed by the department heads. This is attributed to the departmenthead having the day to day responsibility of operating their respective departments. The involvement of the department heads normally produces less variations from the budget. The forecasts subsequent to the scrutiny and input from the hospital administration can supply significant information on the production of the financialbudget for the Denison Specialty Hospital (Finkler et al., 2012).

Denison Specialty Hospital´s plan for the near future include a hospitalbudget. The economic Budget is a management implement thatnormallydetails the economic activities of an accounting period. The important elements that pertain to budgeting are established to specific hospital objectives and possess a comparison with of the financial projections in comparison with the actual outcomes. In this case study, the review of theaccrual accounting system will be explored (Finkler et al., 2012).

The capacity of specialtyhospitals to thrive is reliant upon the environmentalfactors that include the federal and state health care regulations and the internal qualitiesthat include the creationof an effective financial budget. The focus of this assignment will be on the element of the Denison Specialty Hospital financialbudget. The production of a financial budget is a procedure that should apply the resources of team work in order to effective plan and implement the budget in the event that it should be effective (Finkler et al., 2012).

The hospital budget establishes limits that the administration can follow for the entire year, permittingmanagementto document variances while supplying guidance in order that the variances are kept at a minimum and calibrated when possible.  In the utilization of all of the department managers in the process of planning a budget, the administrator has thecapacity of producing successful strategies due to all of the departments beinginvested in the outcome of the objectives. The characteristic of team work causes the elimination of a number of challenges that are linked to the budget and highlights the areas that require improvement (Finkler et al., 2012).

As a consequence of the competition, the margins that are falling and other economic tensions, the hospital managers are usually applying a few steps in order to administrate costs and optimize revenues.  In the case study of Denison SpecialtyHospital, a thorough review of the information will be conducted in order to formulate the total revenues and the total expenses for the hospital (Finkler et al., 2012).

It is projected that in the next year there will be 240 patients. The anticipated patient population will be composed of 120 patient in the oncology department, 80 patients in the cardiac department and forty patients in the rhinoplasty department. The anticipated charge that the hospital will have for each of the oncology departmentpatients will be $50,000. The anticipated charge that there will be for each of the cardiac patient s is anticipated to be $40,000. The anticipated charge for each of the rhinoplasty patents is $25,000 (Finkler et al., 2012).

The quantity that the hospital is paid is reliant on the characteristic of the patients having health insurance.  The patients who subscribe to Medicaid and Medicare have a distinct payment Schedule.  The patients for the oncology department who are subscribed to Medicaid or Medicare pay $40,000. The cardiac patients who are subscribed to Medicaid andMedicare pay $30,000 (Finkler et al., 2012).

The rhinoplasty patients who are subscribed to Medicaid and Medicare pay $10,000. The patients who are self -pay without insurance coverage normally incur the complete charge. There is a 25% bad debt ratio with all self-pay patients. Ten percent of the patients are charitable cases. These patients are not recorded as revenues or expenses. In addition, the Denison Specialty Hospital possesses an endowment fund of $1,000,000 that has been invested in the following manner, $500,000 in United States bonds that have a six percent annualyield. $250,000 in AT & T stock that provides an annual dividend of 8%.  $250,000 in growthstocksthat remit no annualdividend (Finkler et al., 2012).

The second consideration that must be taken into account in section B are the salaries, rent supplies and depreciation of newly acquired equipment.  The following information will be input into an operating budget for Denison Specialty Hospital for the next year.  The final step will be to delineate the operating profit or operating loss of Denison Specialty Hospital (Finkler et al., 2012).

References

Finkler, S.A., Purtell, R, Calabrese, T. and Smith, P.L. (2012). Financial management for public, heal and not for profit organizations (third edition). Upper Saddle River, NJ: prentice Hall.