Assignment: W4A3 Healthcare Budget Request – Estimating ExpensesIt can be tempting to think of...

Question

Assignment: W4A3 Healthcare Budget Request – Estimating Expenses

It can be tempting to think of “dreams” and “finance” as opposite ends of a spectrum. You may dream of things you want, such as new cars, vacations, or retirement. But a quick analysis of your current finances may awaken you to find that your dream is not yet financially feasible.

Dreams and finance are, in fact, not at all in opposition. If your dream is a new automobile, you soon come to realize that you’ll need a plan to make your purchase. Part of this planning is based on an understanding of your current financial position.

Photo Credit: Getty Images

Saving money will help you, and whatever cost is not covered by savings can possibly be made up for by securing financing. You’ll likely need a personal budget that accounts for any new expenses you incur, including your new car payment.

Like you, healthcare organizations have dreams, manifested as corporate objectives. Proposals for new healthcare products or services must support these objectives, typically demonstrated via a business case. To become reality, these ideas almost always require resources. By understanding current financial position, accurately estimating revenue streams and expenses, and creating budgets, strategies can be developed that bring objectives to life.

For this Assignment you will calculate estimated expenses associated with a proposed new healthcare product or service. You will also estimate revenues and calculate a return on the proposed investment.

To Prepare

Reflect on the healthcare product or service solution you have proposed for your healthcare organization. Consider expenses (including start-up expenses and any capital expenditures) that will be required to implement your product or service.
Reflect on the estimated revenues (if any) that your proposed solution will generate. If your project does not generate a direct revenue source, consider cost avoidance, or cost savings as an alternate potential revenue source.
Reflect on the need for financing to meet the estimated expenses associated with your idea.
For each of the above, consult with your internal financial counselor as needed.

The Assignment: Estimating Expenses

Conduct an analysis of estimated expenses and revenues associated with your product or service idea by completing the following:

Part 1: Expense/Revenue/ROI Analysis:

Open your Excel Assignment Workbook and navigate to the “W4A3 Estimated Expenses” worksheet. Using the Healthcare Budget Request Guide for guidance, create a worksheet that records the following:

Each of the estimated expenses associated with your proposed idea, including startup expenses. Be sure to label each appropriately, with enough description to make it clear what the item is and what the estimated cost involves.
Each of the estimated revenues associated with your proposed idea. Be sure to label each appropriately, with enough description to make it clear what the item is and any necessary details regarding sources of revenues (including reimbursements).
Calculate the total estimated expenses and revenues for the next 5-year period.
Calculate the Return on Investment (ROI) for your proposed idea.

NOTE:You will copy your worksheet and analysis onto the Healthcare Budget Request Template (Word document) for submission.

Part 2: W4A3 Projected Expenses and Revenues (Five Year) Summary of Analysis and Interpretation of Results:

Create a brief (1- to 2-page) description of your analysis that clearly describes the estimated financial impact of your proposed idea. Interpret the results by explaining what your ROI calculation means to the organization. Place your analysis on the Healthcare Budget Request Template under the section titled W4A3 Projected Expenses and Revenues (Five Year).

w4a3fieldsa-svcfvduc.xlsx w4a3fieldsa-kwgzkt41-2pxy2q2b.xlsx

Neha · Accepted Answer

W1A1 HealthWaysBudget
	Table 1.  HealthWays Clinic, Monthly Expense Budget Report, June 2018.
	Item	June 2018			May 2018	2018 YTD
		Budget	Actual	Difference	Actual	Budget	Actual			All blue shaded cells require your answers.
	Physician FTE	1.0	1.0	0	1.0	1.0	1.0
	Nurse PractitionerFTE	3.0	3.0	0	3.0	3.0	3.0
	Encounters:
	Established patients	275	291	(16)	286	1650	1671
	New patients	25	18	7	27	150	164
	Total encounters	304	313	(9)	317	1804	1839
	Expenses:
	Physician Salaries & Benefits	$10,500	$10,502	(2)	$10,509	$63,000	$63,149
	NP Salaries & Benefits	$20,000	$20,992	(992)	$20,191	$120,000	$122,001
	Clerical (2 FTE) Salaries & Benefits	$6,667	$6,771	(104)	$6,683	$40,000	$41,978
	Total personnel expense	37167	38264	(1098)	37383	223000	227128
	Medical supplies	$7,500	$8,136	(636)	$7,994	$45,000	$47,883
	Office supplies	$623	$583	40	$508	$3,498	$3,407
	Rent	$2,917	$2,917	0	$2,917	$17,502	$17,502
	Depreciation	$333	$346	(13)	$346	$1,998	$2,050
	Capital Expenses	$3,333	$3,480	(147)	$3,480	$19,998	$20,439
	Overhead	$167	$167	0	$167	$1,002	$1,002
	Total non-personnel expense	14873	15628	(755)	15412	88998	92283
	Total health center expense	52040	53892	(1852)	52795	311998	319411
	Interpretation:
	I. Answer the following question related to the results of your calculations: What interpretations can you make based on the data? What is happening in regard to such measurables as:
	     1. The full-time equivalents (FTE) for HealthWay employees: 
	1. Answer: For a full-time workweek, FTE = the employee's scheduled hours divided by the employer's hours. The figures are equal based on expected FTE for both physicians and nursing practitioners.
	     2. The number of encounters, both new and established:
	2. Answer: The number of encounters for new patients is 291 and 18 for the established patients which add up to 309 - 3. For the established  the patients those numbers have been underestimated and over estimated for the new patients. 
	     3.  Non-personnel expenses:
	3. Answer: The total actual non-personnel expenses amount to 15628 above the budgeted amount by 755 which creates the non-personnel expense budget and further adjustments are critical. The non-personnel expenses have been miscalculated. This means that the business they should reduce their expenses to remain profitable.
	     4.Total expenses:
	4. Answer: The total expenses were underestimated with some $1861. The estimates and the actual should be as close as possible.
	II. If these trends continue, what could it mean for HealthWays? What strategies might they employ to address any issues your analysis suggests?
	Answer: The persistence of those trends might plunge HealthWays into critical budget deficits and poor revenues that profits or losses. Applying the zero-budgeting approach will allows the business to contain cost containment through a budget adjustment. HealthWays should try all they'll to reduce their costs on remain profitable, the prices should be as low as possible. The business should also have a look at the expenses that aren't necessary and eliminate them.
Practice
	Quarter 1 Units Sold
			January	February	March	Totals	Average	January Revenue	February Revenue	March Revenue
		Price/Unit
	Product A	1500	148	208	180	2036		222000
	Product B	800	222	301	155	1478		177600
	Product C	2700	296	394	157	3547		799200
	Product D	500	111	487	212	1310		55500
	Product E	1100	444	580	190	2314		488400
	Totals		1221	1970	894
	Average		244.2	394	178.8
	Total Products Sold Q1			4085
	Total Revenue Q1			1742700
W2A2 Template 
	                                  W2A2 Practice Design
	Refer to the Healthcare Budget Guide for an example of what to include and how it should look. 
	Expenses/Cost	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5	Grand Total
	Start up Expenses:
	Expense 1
	Expense 2
	Expense 3
	Expense 4
	Total Start Up Expense
	Operating Expenses: 
	Expense 1
	Expense 2
	Expense 3
	Expense 4
	Expense 5
	Total Operating Expense
	Total Expenses
	Revenue/Savings
	Source 1
	Source 2
	Source 3
	Source 4
	Total Revenue/Savings
W4A3 Estimated Expenses
	                                  W4A3 Estimated Expenses
	Refer to the Healthcare Budget Guide for an example of what to include and how it should look. 
	Expenses/Cost	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5	Grand Total
	Start up Expenses:
	Medical supplies	$   45,000.00	$   8,000.00	$   8,000.00	$   8,000.00	$   8,000.00	$   8,000.00	$   85,000.00
	Office supplies	$   3,498.00	$   500.00	$   500.00	$   500.00	$   500.00	$   500.00	$   5,998.00
	Total Start Up Expense	$   48,498.00	$   8,500.00	$   8,500.00	$   8,500.00	$   8,500.00	$   8,500.00	$   90,998.00
	Operating Expenses: 
	Rent	$   17,502.

Assignment: W4A3 Healthcare Budget Request – Estimating Expenses It can be tempting to think of “dreams” and “finance” as opposite ends of a spectrum. You may dream of things you want, such as new...

Assignment: W4A3 Healthcare Budget Request – Estimating Expenses

To Prepare

The Assignment: Estimating Expenses

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment