28 Oct Preparation Review the Villa Health Financial Statement Analysis?scenario as needed. Conduct general research on the hospital department?you have chosen to better understand how it operates,
3 Pages
Preparation
Review the Villa Health Financial Statement Analysis scenario as needed. Conduct general research on the hospital department you have chosen to better understand how it operates, particularly in areas related to its finances.
Scenario
In the weeks after the Villa Health Board meeting, your department is facing a large staffing shortage that has resulted in a significant increase in overtime costs. Your department needs to address the ensuing budget shortfall and share the plan with senior leadership.
Instructions
Considering the scenario, create a brief to senior leadership that shares your initial steps for addressing the budget shortfall. In your brief, include the following:
- Explain which three financial statements or figures would likely reveal useful insights into the causes or solutions to the problem.
- Suggest three reasonable options for addressing the specified budget shortfall with detail that would inform decision-making.
- Justify your choice of the best option by providing an effective analysis of its pros and cons.
- Provide reasonable and specific projections of how this action would impact the financial statements or figures you selected in the first bullet point.
- "Specific projections" should include the general magnitude and direction of changes and not necessarily specific numbers.
- You needn’t focus on actual amounts or perform detailed accounting projections; you are merely seeking to provide insight into areas and magnitude of change (general direction) caused by the action(s).
Financial Statement
| Hospital: St. Anthony Medical Center, Vila Health | |||
| BALANCE SHEET | |||
| 2 Years Prior Ending: 6/30 | 1 Year Prior Ending: 6/30 | Current Year Ending: 6/30 | |
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash | $ 1,587,292 | $ (2,464,387) | $ (1,027,622) |
| Accounts Receivable | $ 46,165,929 | $ 39,102,464 | $ 32,410,207 |
| Less-Estimated Uncollectable & Allowances | $ 7,428,652 | $ 2,038,650 | $ 3,891,982 |
| Receivables From Third Party Payors | $ (3,983,360) | $ (3,067,704) | $ (247,989) |
| Pledges And Other Receivables | $ 3,067,078 | $ 1,770,581 | $ 1,889,617 |
| Inventory | $ 7,438,974 | $ 7,328,984 | $ 8,014,988 |
| Prepaid Expenses | $ 982,465 | $ 1,230,053 | $ 1,301,476 |
| TOTAL CURRENT ASSETS | $ 47,829,726 | $ 41,861,341 | $ 38,448,695 |
| PROPERTY, PLANT AND EQUIPMENT: | |||
| Land | $ 15,239,201 | $ 15,239,201 | $ 15,239,201 |
| Land Improvements | $ 981,929 | $ 1,005,843 | $ 1,009,492 |
| Buildings | $ 114,791,925 | $ 85,916,245 | $ 122,015,477 |
| Fixed Equipment – Building Service | $ 977,950 | $ 28,562,665 | $ 77,067,373 |
| Fixed Equipment – Other | $ 7,243,962 | $ 9,305,052 | $ – 0 |
| Equipment | $ 56,465,517 | $ 57,547,957 | $ – 0 |
| Leasehold Improvements | $ 360,086 | $ 425,606 | $ 425,606 |
| Construction In Progress | $ 129,971 | $ 225,682 | $ 1,089,603 |
| TOTAL | $ 196,190,541 | $ 198,228,251 | $ 216,846,752 |
| Less Accumulated Depreciation | $ 53,467,581 | $ 62,102,069 | $ 75,384,791 |
| NET PROPERTY, PLANT & EQUIPMENT | $ 142,722,960 | $ 136,126,182 | $ 141,461,961 |
| INVESTMENTS AND OTHER ASSETS: | |||
| Other Investments | $ 1,200,000 | $ 1,200,000 | $ 1,200,000 |
| TOTAL INVESTMENTS & OTHER ASSETS | $ 1,200,000 | $ 1,200,000 | $ 1,200,000 |
| INTANGIBLE ASSETS: | |||
| Other Intangible Assets | $ 8,136,660 | $ 8,785,276 | $ 10,135,573 |
| TOTAL INTANGIBLE ASSETS | $ 8,136,660 | $ 8,785,276 | $ 10,135,573 |
| TOTAL ASSETS | $ 199,889,346 | $ 187,972,799 | $ 191,246,229 |
| LIABILITIES AND EQUITY | |||
| CURRENT LIABILITIES: | |||
| Accounts Payable | $ 12,401,459 | $ 15,538,863 | $ 16,230,075 |
| Accrued Compensation and Related Liabilities | $ 12,314,912 | $ 10,399,590 | $ 11,777,836 |
| Other Accrued Expenses | $ 2,866,697 | $ 2,147,237 | $ 1,866,967 |
| Current Maturities of Long Term Debt | $ 106,871 | $ 110,036 | $ – 0 |
| TOTAL CURRENT LIABILITIES | $ 27,689,939 | $ 28,195,726 | $ 29,874,878 |
| DEFERRED CREDITS: | |||
| Other Deferred Credits | $ 297,706 | $ 185,548 | $ – 0 |
| TOTAL DEFERRED CREDITS | $ 297,706 | $ 185,548 | $ – 0 |
| LONG TERM DEBT: | |||
| Notes Payable | $ 5,709,416 | $ 5,674,827 | $ 5,296,930 |
| Notes and Loans Payable to Parent | $ 200,510,267 | $ 189,173,761 | $ 196,170,117 |
| TOTAL | $ 206,219,683 | $ 194,848,588 | $ 201,467,047 |
| Less Current Maturities of Long Term Debt | $ 106,871 | $ 110,036 | $ – 0 |
| TOTAL LONG TERM DEBT | $ 206,112,812 | $ 194,738,552 | $ 201,467,047 |
| TOTAL LIABILITIES | $ 234,100,457 | $ 223,119,826 | $ 231,341,925 |
| EQUITY: | |||
| Retained Earnings | $ (34,211,111) | $ (35,147,027) | $ (40,095,696) |
| TOTAL EQUITY | $ (34,211,111) | $ (35,147,027) | $ (40,095,696) |
| TOTAL LIABILITIES AND FUND BALANCE OR EQUITY | $ 199,889,346 | $ 187,972,799 | $ 191,246,229 |
| INCOME STATEMENT | |||
| 2 Years Prior Ending: 6/30 | 1 Year Prior Ending: 6/30 | Current Year Ending: 6/30 | |
| OPERATING REVENUE: | |||
| Inpatient Revenue | $ 613,250,730 | $ 666,080,698 | $ 752,813,180 |
| Outpatient Revenue | $ 379,474,731 | $ 464,996,793 | $ 529,706,918 |
| TOTAL PATIENT SERVICES REVENUE | $ 992,725,461 | $ 1,131,077,491 | $ 1,282,520,098 |
| DEDUCTIONS FROM REVENUE: | |||
| Contractual Adjustments | $ 717,932,468 | $ 855,811,021 | $ 1,010,760,525 |
| Charity and Uncompensated Care | $ 13,000,000 | $ 13,400,000 | $ 7,483,718 |
| TOTAL DEDUCTIONS FROM REVENUE | $ 730,932,468 | $ 869,211,021 | $ 1,018,244,243 |
| NET PATIENT SERVICE REVENUE | $ 261,792,993 | $ 261,866,470 | $ 264,275,855 |
| OTHER OPERATING REVENUE: | |||
| Other Operating Revenue | $ 10,700,496 | $ 9,969,048 | $ 10,171,428 |
| TOTAL OPERATING REVENUE | $ 272,493,489 | $ 271,835,518 | $ 274,447,283 |
| OPERATING EXPENSES: | |||
| Salaries and Wages | $ 83,640,502 | $ 85,864,459 | $ 88,523,453 |
| Employee Benefits | $ 23,409,379 | $ 25,248,024 | $ 25,937,607 |
| Professional Fees | $ 7,771,092 | $ 8,144,426 | $ 9,613,656 |
| Supplies | $ 45,829,243 | $ 47,766,813 | $ 46,386,989 |
| Purchased Services – Utilities | $ 2,876,784 | $ 3,264,382 | $ 3,043,368 |
| Purchased Services – Other | $ 18,060,203 | $ 23,072,640 | $ 22,184,388 |
| Depreciation | $ 17,664,788 | $ 16,910,508 | $ 17,408,824 |
| Rentals and Leases | $ 4,457,609 | $ 4,505,340 | $ 4,866,384 |
| Insurance | $ 4,958,436 | $ 5,430,756 | $ 5,740,788 |
| License and Taxes | $ 20,456,465 | $ 15,984,288 | $ 18,828,504 |
| Interest | $ 18,559,323 | $ 16,787,580 | $ 18,671,136 |
| Provision For Bad Debts | $ 14,054,177 | $ 2,564,197 | $ – 0 |
| Other Direct Expenses | $ 6,905,494 | $ 9,489,283 | $ 8,522,136 |
| TOTAL OPERATING EXPENSES | $ 268,643,495 | $ 265,032,696 | $ 269,727,233 |
| NET OPERATING REVENUE | $ 3,849,994 | $ 6,802,822 | $ 4,720,050 |
| NET REVENUE BEFORE ITEMS LISTED BELOW | $ 3,849,994 | $ 6,802,822 | $ 4,720,050 |
| EXTRAORDINARY ITEM | $ (2,600,229) | $ 1,374,000 | $ 750,000 |
| NET REVENUE OR (EXPENSE) | $ 1,249,765 | $ 8,176,822 | $ 5,470,050 |
,
1
2
Financial Statement Analysis
Alicia Adelusi
Healthcare Operations Management HSA540
Professor Dr, Lousia Ukochovwera
October 18th, 2022
Financial Statement Analysis
The IT department is responsible for many important functions within Villa Health. It is responsible for maintaining and troubleshooting computer systems, ensuring data security, and providing technological support to hospital staff. As such, it is essential that the IT department run efficiently and effectively in order to best support the hospital's operation. The study examines a health care scenario to assist gain an appreciation for business realities that are not readily reflected in financial statements. Also, it will assist in crafting and explaining a likely operational question relevant for a department of Villa Health.
The CFO's question provides an opportunity to review the financial performance of the IT department and consider ways to improve its efficiency and effectiveness. Below are some financial questions that can be asked to assess the IT department's performance and identify potential improvements: What is the total cost of ownership (TCO) for the IT department? This figure should include all costs associated with running the department, including salaries, benefits, hardware and software expenses. Secondly, how does the IT department's TCO compare to similar departments in other organizations? If the TCO is significantly higher than peer organizations, this could indicate inefficiency or excessive spending.
Thirdly, what is the return on investment (ROI) for the IT department? This metric measures how much profit or savings the department generates for the organization as a whole. A high ROI indicates that the department is providing good value for its costs. Fourthly, are there any areas where the IT department could be more efficient? For example, are there duplicate processes or redundant data storage solutions that could be streamlined? Lastly, are there any new technologies or solutions that could help improve the performance of the IT department? For example, cloud-based solutions may offer greater flexibility and scalability than traditional on-premises systems.
There are many factors to consider when making decisions about how to allocate resources within a hospital, but one of the most important is the return on investment (ROI) for the IT department. By understanding the ROI for specific IT projects, hospital administrators can make better decisions about which projects are likely to have the greatest impact on patient care and operational success.
The ROI for the IT department in Villa Health hospital is important for several reasons. First, IT systems are critical to the daily operations of a hospital, and efficient IT systems can help hospitals run more smoothly. Second, IT systems can help hospitals save money by automating tasks and improving communication between staff members. Third, IT systems can improve patient care by providing better access to medical records and faster communication between doctors and nurses. For example, consider a hospital that implements an electronic medical records (EMR) system. The EMR system will likely cost the hospital upfront to purchase and implement, but over time it will save the hospital money by reducing paper costs, automating tasks such as billing and scheduling, and improving communication between staff members. In addition, the EMR system will improve patient care by providing doctors and nurses with quick and easy access to medical records.
There are many assumptions that ROI is important for the IT department in a hospital. The main one is that IT can save the hospital money. In other words, IT can be used to reduce costs or generate revenue. For example, if a hospital uses an Electronic Health Record (EHR) system, it can potentially save the hospital money by reducing duplicate tests and procedures, improving patient safety, and reducing paperwork (McHugh, VanDyke, McClelland, & Moss, 2012). Other examples of how IT can save the hospital money include using telemedicine to connect patients with doctors in remote locations, using data analytics to improve operational efficiency, and using automatic bill pay systems to reduce administrative costs.
Another assumption is that IT can improve patient care. For example, EHRs can help doctors and nurses access critical patient information more quickly and easily, which can lead to better patient care. Additionally, telemedicine can help connect patients with specialists who might otherwise be unavailable, and data analytics can be used to identify patterns that could lead to improved patient outcomes.
Finally, assume that IT investments will have a positive return on investment (ROI). That is, for every dollar invested in IT, the hospital will see a greater return in terms of cost savings or revenue generation (Minich-Pourshadi, 2010). While there is no guarantee that every IT investment will have a positive ROI, this assumption provides a good reason for why hospitals should invest in IT initiatives.
In conclusion, the IT department of a health care organization has a lot to consider when it comes to business realities. It must take into account the financial statements of the organization, as well as the operational questions relevant to their department. By doing so, they can ensure that they are providing the best possible service to their clients and patients. The study has explored on the return on investment (ROI) for the IT department such as cost saving through tasks automation. The assumptions identified include enhancement of patient services.
References
McHugh, M., VanDyke, K., McClelland, M., & Moss, D. (2012). Improving patient flow and reducing emergency department crowding: a guide for hospitals.
Minich-Pourshadi, K. (2010). 5 HOSPITAL FINANCE QUESTIONS TO ASK RIGHT NOW. Brentwood, TN: Health Leaders Media Intelligence Unit.
Miller, L. (2021). How to improve your hospital's financial performance. VIE Healthcare Consulting. https://viehealthcare.com/how-to-improve-your-hospitals-financial-performance/
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteEdu. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
Do you need help with this question?
Get assignment help from WriteEdu.com Paper Writing Website and forget about your problems.
WriteEdu provides custom & cheap essay writing 100% original, plagiarism free essays, assignments & dissertations.
With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Chat with us today! We are always waiting to answer all your questions.