25 Aug You have been asked by the hospitals chief
Instructions (See that attached file)
You have been asked by the hospital’s chief administrator to create a new six-month operations budget for the clinic. Using an Excel spreadsheet, create a new six-month budget for the clinic that includes the following revenue and expense projections:
- The clinic’s revenue is projected to grow by approximately 3% as a result of a new managed care contract.
- The cost of expenses is expected to increase to 1.5%.
- The clinic will also be adding a new roof to the facility at a projected cost of $50,000.
Then prepare a memo for the chief administrator. The memo should include a review of the previous year’s budget, an analysis of the upcoming changes (figures above), and a discussion about the impacts that these changes will have on the budget for the upcoming year.
Please see rubric below:
A – 4 – Mastery
Memo includes a complete and thorough review of the year’s budget with multiple examples or supporting details.
A – 4 – Mastery
Memo includes a comprehensive analysis of the proposed changes, incorporating the following figures: clinic revenue growth of approximately 3%, a result of the new managed care contract, expense cost increase of 1.5%, new roof for facility at $50,000
A – 4 – Mastery
Memo includes a clear and thorough discussion on the impacts that the changes will have on the budget for the upcoming year. Includes multiple examples or supporting details.
A – 4 – Mastery
Excel spreadsheet of six-month budget for the clinic with revenue and expense projections has no significant errors.
Budget
| Budget C | ||
| REVENUES | ||
| Description | Detail | Yearly Budgeted Amount |
| Clinic Revenue Lab | 325 clients per month, 3,900 total visits | 163,800.00 |
| Revenue Medications | 195 of billable labs per month, 2340 labs per year | 58,500.00 |
| Revenue Procedures | 162 meds per month, 1,950 per year | 39,000.00 |
| Revenue Less | # of billable procedures done per year | 26,000.00 |
| Contractuals | Percentage negotiated with payer | 114,920.00 |
| TOTAL CLINIC REVENUE | 402,220.00 | |
| EXPENSES | ||
| Description | Detail | Yearly Budgeted Amount |
| PAYROLL | ||
| Provider salary | Total salary | 60,000.00 |
| Receptionist salary | 13,395.00 | |
| LPN salary | 28,182.00 | |
| Total Salary & Wages: | 101,577.00 | |
| Provider FICA | Salary x 0.0765 | 4,590.00 |
| Receptionist FICA | Salary x 0.0765 | 1,024.68 |
| LPN FICA | Salary x 0.0765 | 2,155.92 |
| Total FICA | 7,770.60 | |
| Unemployment | ||
| Health Insurance | 10,222.08 | |
| Life Insurance | 2,216.00 | |
| Long Term Disability | 666.00 | |
| 401K Employer Contribution | ||
| Total Additional Benefits: | 13,104.08 | |
| TOTAL PAYROLL: | 122,451.68 | |
| OPERATING EXPENSES | ||
| Supplies Food | 100 | |
| Misc. Supplies | 1,000.00 | |
| Medications | 5,000.00 | |
| Medical Supplies | 4,500.00 | |
| Office Supplies | 500.00 | |
| Printing | 500.00 | |
| Postage | UPS, Fed Ex, Postage | 500.00 |
| Professional Fees | ||
| Consulting | Accountants fees | 1,000.00 |
| Audit Fee | 1,500.00 | |
| Legal Fees | 1,500.00 | |
| Licensing Fees | Clinic | 300.00 |
| Bank Fees | 250.00 | |
| Advertising | 5,000.00 | |
| Insurance | ||
| Worker's Compensation | 1,575.00 | |
| Gen/Pro/Med Mal | liability, professional liability, employment, practice liability, property insturance, etc. | 15,000.00 |
| Umbrella Ins. | 830.00 | |
| D&O Ins. | 1,000.00 | |
| Professional Development Meetings | Continuing education for provider and staff | 1,000.00 |
| Cont. Memberships etc. | Exp. Rural Health Association | 300.00 |
| Travel & Entertainment | Monies for getting to conference | 1,000.00 |
| Facility | ||
| Telephone | Regular Service | 1,800.00 |
| Internet Access | 300.00 | |
| Utilities | Water, Electric, Garbage | 5,000.00 |
| Small Equipment & Tools | 300.00 | |
| Equipment Rental | 1,200.00 | |
| Capital Equipment | 10,000.00 | |
| Rent or mortgage | 7,200.00 | |
| Maintenance | cleaning service, building & grounds upkeep | 1,600.00 |
| TOTAL OPERATING EXPENSES | 69,755.00 | |
| TOTAL EXPENSES | 192,206.68 | |
| Yearly Budgeted Amount | ||
| NET INCOME (Loss) | [Revenue – Expenses] | 210,013.32 |
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