Brookside Hospital: Preparing A Departmental Budget From The Given Data
Prepare a professional document to present to the VP of Radiology which will include separate tables for each of the following:
1. Prepare a statistics budget summary by procedure and payer
2. Prepare a gross and net revenue worksheet by procedure and payer. Hint: prepare a table for each procedure and then one for the total of all procedures.
3. Prepare an expense worksheet based on the volume increases and the rate increases for each of the three types of expenses. Do not separate the expenses by procedure only by type of expens
Brookside Hospital: preparing a departmental budget from the given data
Brookside Hospital’s imaging for hand, foot and forearm is a sub-unit of the Radiology department. They project ending the current year (2017) with 2,000 total procedures broken down as follows:
Procedure
Time Required
Volume proportion
Rate
(Charge)
Hand imaging
10 minutes
60%
$100
Foot imaging
20 minutes
30%
$300
Forearm imaging
30 minutes
10%
$400
This sub-unit accounts for 20% of the Radiology department’s current expenses of $1,225,000 broken down as follows:
Expense
Amount
Labor
$425,000
Imaging Materials
$300,000
Overhead
$500,000
Total
$1,225,000
Payer
Volume proportion
Reimbursement
Medicare
50%
70% of charges
Medicaid
20%
50% of charges
Managed care
20%
80% of charges
Self Pay
10%
100% of charges *
* 20% of the self pay result in charity care
Payer Mix and Reimbursement is as follows:
Budget Assumptions for 2018:
· Volume increase is expected to be 10% with the same procedure mix
· Due to volume increase, all three expenses are expected to increase 10%, in addition:
· Labor rates are expected to increase 5% due to merit increases
· The cost of Imaging materials are expected to increase 6%
· Overhead rate is expected to stay the same
Required:
Prepare a professional document to present to the VP of Radiology which will include separate tables for each of the following:
1. Prepare a statistics budget summary by procedure and payer
2. Prepare a gross and net revenue worksheet by procedure and payer. Hint: prepare a table for each procedure and then one for the total of all procedures.
3. Prepare an expense worksheet based on the volume increases and the rate increases for each of the three types of expenses. Do not separate the expenses by procedure only by type of expense.
4. Prepare a summary income statement for overall revenues and expenses. Include appropriate header.
Rubrics:
Problem 1: 25%
Problem 2: 25%
Problem 3: 25%
Problem 4: 25%e.
4. Prepare a summary income statement for overall revenues and expenses. Include appropriate header.
"96% of our customers have reported a 90% and above score. You might want to place an order with us."
