HCS 577 WEEK 6 Learning Team Assignment
Health Care Business Analysis
Part 1 2010 Operating Budget
Review the "2009 Budget Issues - Nurses of the Patton-Fuller Community Hospital Virtual Organization
Patton - Fuller CommunityHospital
PatientStatistics
Jan Feb Mar Apr May Jun
Days in themonth 31 28 31 30 31 30
PatientDays(60%occxseasonalxdaysinmonth) 13,271 11,983 12,286 10,171 9,092 7,258
AverageCensus:
Patton Fuller # ofbeds= 600
Patton Fuller avgoccupancy(HFMA) 60%
Patton Fuller Avg Daily Census(ADC) 360
Monthas%ofAverage"SeasonalAdjustment" 119% 119% 110% 94% 81% 67%
PattonFullerAvgDailyCensusw/seasonaladj. 428 428 396 339 293 242
Patton Fuller Avg Net Rev/ptday $3,500
Average DailyRevenue 1,498,381 1,497,857 1,387,134 1,186,616 1,026,495 846,801
PattonFullerAvgNetRev/month(1000's) $ 46,450 $ 41,940 $ 43,001 $ 35,598 $ 31,821 $ 25,404
Patton - Fuller CommunityHospital
PatientStatistics
Jul Aug Sep Oct Nov Dec Total
Days in themonth 31 31 30 31 30 31 365
PatientDays(60%occxseasonalxdaysinmonth) 7,294 10,723 11,182 11,607 13,419 13,113 131,400
AverageCensus:
Patton Fuller # ofbeds= 600
Patton Fuller avgoccupancy(HFMA) 60%
Patton Fuller Avg Daily Census(ADC) 360
Monthas%ofAverage"SeasonalAdjustment" 65% 96% 104% 104% 124% 117% 100%
PattonFullerAvgDailyCensusw/seasonaladj. 235 346 373 374 447 423
Patton Fuller Avg Net Rev/ptday $ 3,500
Average DailyRevenue 823,560 1,210,686 1,304,520 1,310,523 1,565,592 1,480,451
PattonFullerAvgNetRev/month(1000's) $ 25,530 $ 37,531 $ 39,136 $ 40,626 $ 46,968 $ 45,894 $ 459,900
Patton - Fuller CommunityHospital
NursingStatistics
Jan Feb Mar Apr May
Number of Patients perday 428 428 396 339 293
Cost of nurse per hourw/benefits $ 30.00 $ 30.00 $ 30.00 $ 30.00 $ 30.00
Cost of nurse per 24hourday $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00
Numberofnursesperpatientbasedon5patientspernurseora"5 to 1" nursingratio
0.2
Number of nurses perday 85.6 85.6 79.3 67.8 58.7
Nursing cost perday $ 61,648 $ 61,626 $ 57,071 $ 48,821 $ 42,233
Nursing cost permonth $ 1,911,078 $ 1,725,532 $ 1,769,190 $ 1,464,623 $ 1,309,221
Simulation: Effect of a $1 per hour raise for allnurses
Cost of nurse per hourw/benefits $ 31.00 $ 31.00 $ 31.00 $ 31.00 $ 31.00
$ 744.00 $ 744.00 $ 744.00 $ 744.00 $ 744.00
Numberofnursesperpatientbasedonaratioof5patientspernurse or a "5 to 1" nursingratio
0.2
Number of nurses perday 85.6 85.6 79.3 67.8 58.7
Nursing cost perday $ 63,703 $ 63,680 $ 58,973 $ 50,448 $ 43,641
Nursing cost permonth $ 1,974,781 $ 1,783,050 $ 1,828,163 $ 1,513,444 $ 1,352,862
Increaseincostpermonthduetoa$1raiseper nursinghour
$ 63,702.62
$ 57,517.73
$ 58,973.00
$ 48,820.77
$ 43,640.71
Simulation: Effect of changing to a "4 to 1" nursingratio
Number of nurses perday 0.25 107.0 107.0 99.1 84.8 73.3
Nursing costperday(Nursing ratioof "4to1" and anhourlyrateof
$30)
$ 77,060
$ 77,033
$ 71,338
$ 61,026
$ 52,791
Nursing cost permonth $ 2,388,848 $ 2,156,915 $ 2,211,487 $ 1,830,779 $ 1,636,527
Increaseincostpermonthduetoachangeinnursingratio from 5 to 1 down to 4 to1
$ 477,770
$ 431,383
$ 442,297
$ 366,156
$ 327,305
Patton - Fuller CommunityHospital
NursingStatistics
Jul Aug Sep Oct Nov Dec Total
Number of Patients perday 235 346 373 374 447 423
Cost of nurse per hourw/benefits $ 30.00 $ 30.00 $ 30.00 $ 30.00 $ 30.00 $ 30.00
Cost of nurse per 24hourday $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00 $ 720.00
Numberofnursesperpatientbasedon5patientspernurseora"5 to 1" nursingratio
0.2
Number of nurses perday 47.1 69.2 74.5 74.9 89.5 84.6
Nursing cost perday 33,884 49,811 53,672 53,919 64,413 60,910
Nursing cost permonth 1,050,392 1,544,143 1,610,150 1,671,479 1,932,388 1,888,210
Simulation: Effect of a $1 per hour raise for allnurses
Cost of nurse per hourw/benefits $ 31.00 $ 31.00 $ 31.00 $ 31.00 $ 31.00 $ 31.00
$ 744.00 $ 744.00 $ 744.00 $ 744.00 $ 744.00 $ 744.00
Numberofnursesperpatientbasedonaratioof5patientspernurse or a "5 to 1" nursingratio
0.2
Number of nurses perday 47.1 69.2 74.5 74.9 89.5 84.6
Nursing cost perday $ 35,013 $ 51,471 $ 55,461 $ 55,716 $ 66,560 $ 62,940
Nursing cost permonth $ 1,085,405 $ 1,595,615 $ 1,663,822 $ 1,727,195 $ 1,996,801 $ 1,951,150
Increaseincostpermonthduetoa$1raiseper nursinghour
$ 35,013.05
$ 51,471.44
$ 53,671.66
$ 55,715.97
$ 64,412.93
$ 62,940.33
$ 630,720.01
Simulation: Effect of changing to a "4 to 1" nursingratio
Number of nurses perday 0.25 58.8 86.5 93.2 93.6 111.8 105.7
Nursing costperday(Nursing ratioof "4to1" and anhourlyrateof
$30)
$ 42,354
$ 62,264
$ 67,090
$ 67,398
$ 80,516
$ 76,137
Nursing cost permonth $ 1,312,989 $ 1,930,179 $ 2,012,687 $ 2,089,349 $ 2,415,485 $ 2,360,262
Increaseincostpermonthduetoachangeinnursingratio from 5 to 1 down to 4 to1
$ 262,598
$ 386,036
$ 402,537
$ 417,870
$ 483,097
$ 472,052
$ 4,730,400
Decide which of the two highlighted options you will implement from the Nursing Statistics memo of the "2009 Budget Issues - Nurses" document.
Create a new 2010 Operating Budget based on the labor decision you select from the Nursing Statistics memo.
Part 2 - Analysis Paper
Write a 1050 to 1,400 word paper in which you detail the following:
• Explain the decision-making processes in creating a budget.
• Explain the role of variance analysis in maintaining an operating budget.
• Differentiate between managerial accounting and financial management.
• Analyze how generally accepted accounting principles in the health care industry apply to your Operating Budget Projection.
• Analyze the decision between the two labor alternatives facing the management of PFCH and the annual cost increase of each.
• Evaluate the labor alternative you would recommend. Your justification should present numbers related to fiscal management including how each decision impacts the 2010 Budget Projection.
• Analyze the effect of the labor alternative you recommended would have on the operating budget with respect to each of the following:
â—¦ The opportunity cost of your recommendation.
â—¦ How your recommendation impacts employee satisfaction.
â—¦ How your recommendation impacts patient care and patient satisfaction.
Cite a minimum of four sources.
Format your sources consistent with APA guidelines.
Submit the 2010 Operating Budget and Analysis Paper.
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