Healthways Clinic Monthly Expenses Table

W1a1 Healthwaysbudgettable 1 Healthways Clinic Monthly Expense Budg

W1A1 HealthWaysBudget Table 1. HealthWays Clinic, Monthly Expense Budget Report, June 2018. Item June 2018 May YTD Budget Actual Difference Actual Budget Actual All blue shaded cells require your answers. Physician FTE 1.0 1..0 1.0 1.0 Nurse PractitionerFTE 3.0 3..0 3.0 3.0 Encounters: Established patients New patients Total encounters Expenses: Physician Salaries & Benefits $10,500 $10,) $10,509 $63,000 $63,149 NP Salaries & Benefits $20,000 $20,) $20,191 $120,000 $122,001 Clerical (2 FTE) Salaries & Benefits $6,667 $6,) $6,683 $40,000 $41,978 Total personnel expense Medical supplies $7,500 $8,) $7,994 $45,000 $47,883 Office supplies $623 $ $508 $3,498 $3,407 Rent $2,917 $2, $2,917 $17,502 $17,502 Depreciation $333 $) $346 $1,998 $2,050 Capital Expenses $3,333 $3,) $3,480 $19,998 $20,439 Overhead $167 $ $167 $1,002 $1,002 Total non-personnel expense Total health center expense 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: The FTE for Health Way employees shows that the estimates and the actual figures are equal. This shows that the 2.

The number of encounters, both new and established: 2. Answer: For the established ones the numbers have been under estimated but for the new ones the numbers have been over estimated. 3. Non-personnel expenses: 3. Answer: The non-personnel expenses have been under estimated.

This means that the business should find better estimates or reduce their expenses to remain profitable. 4.Total expenses: 4. Answer: The total expenses was underestimated with some $1861. This is not a big margin and thus next time the budget estimates should try to make the estimates and the actual 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: HealthWays should try all they can to minimize their costs as to remain profitable, the costs should be as low as possible. The business should also look at the expenses that are not necessary and thus cut them off. W8A5a Expense forecasting W8A5 Estimated Expenses Refer to the Healthcare Budget Guide for directions on completing this Expense Forecasting scenario Expense Forecasting Based on the information provided, prepare an expense forecast for 20X1 using the template below: Spending during January- June 20X1 (6 months) · Fixed expense items: $210,000 · Variable expense items: $1,200,000 · One time expense: $50,000 of fixed expense money was spent on preparing for a Joint Commission survey Procedures preformed during January- June 20X1 (6 months) · Your department has performed 20,000 procedures during the first six months On November 1,20X1, two new procedure technicians will begin work.

The salary and fringe benefit costs for each is: $ 96,000.00 yearly Description Fixed Expense $210,000 Variable Expense $1,200,000 One-time expense $50,000 Total procedures performed 20,000. Cost per procedure $96,000/2/12= $8,000/year per technician; for 6 months: $4,000 each.

Total technician cost for 6 months 2 technicians x $4,000 = $8,000.

Adjusted expenses for the year, including new technicians, should be projected accordingly.

Annualize fixed expenses: $210,000; variable expenses: $1,200,000; additional technician salaries: $8,000.

Forecasted total expenses for 20X1 would thus be: $210,000 + $50,000 + (annualized variable costs proportional to the 6 months) + technician costs, projected over 12 months, adjusting for the new staff starting November 1, 20X1.

Answer: For a comprehensive expense forecast, the total expenses will include the initial fixed expenses, the proportional variable expenses, the one-time costs, and the added technician salaries. The forecast aims to project the total expenses for the entire year, considering the ongoing and new expenses, offering a basis for budgeting and financial planning.

W8A5b Breakeven Analysis W8A5 Breakeven Analysis Refer to the Healthcare Budget Guide for directions on completing this Breakeven Analysis Break-Even Analysis Scenario You can charge $1,075 for a new service.

Demand is anticipated to be 8,000 units a year. Your business is able to handle up to 16,500 units annually, so capacity should not be a problem. The average collection rate is 80%. The new service has annual fixed costs of $4,700,000. Variable cost per unit of service is $420.

Price to be Charged $1,075 Collection Rate 80% Average Collection per Service $860 Variable cost per unit of service $420.00 Fixed Operating Costs $4,700,000.00 Break-Even Point =Fixed Cost/(Net Revenue per Unit-Variable Cost per Unit) Capacity: 16,500 Demand: 8,000 Breakeven: 10,682 Question: Use break-even analysis to determine if this new service is financially viable. If the business is not financially viable, what steps could you take to make a case to proceed with implementation? Explain your decision. Answer: The break-even units are 10,682 while the anticipated demand is 8,000. This means that the business is not financially viable. to make it fnancially viable, we should try and reduce the fixed costs as much as possible.

We should also try and reduce the variable costs. This will decrease the breakeven units and thus make the business financially viable. W8A5c Marginal Profit and Loss W8A5 Marginal Profit and Loss Refer to the Healthcare Budget Guide for directions on completing this Marginal Profit and Loss scenario Marginal Profit and Loss Statement Scenario You are examining a proposal for a new business opportunity – a new procedure for which demand is expected to be 1,400 units the first year, growing by 600 units each year thereafter. The price charged per procedure is $1,000. The collection rate is anticipated to be 80%.

Each procedure consumes $300 of supplies. Salary cost is estimated to cost $540,000 each year, fringe benefits are 25% of salaries, rent for the facility is $55,000/yr and operating cost are $120,000/yr. Year One Year Two Year Three Year Four Year Five Marginal Revenue: Units of Volume 1,400 2,000 2,600 3,200 3,800 Price Procedure $1,000 $1,000 $1,000 $1,000 $1,000 Collection Rate 80% 80% 80% 80% 80% Marginal Net Revenue $1,120,000 $1,600,000 $2,080,000 $2,560,000 $3,040,000 Marginal Costs: Variable Costs Units of Volume 1,400 2,000 2,600 3,200 3,800 Variable Cost Supplies per Unit/procedure $300 $300 $300 $300 $300 Marginal Variable Cost $420,000.00 $600,000.00 $780,000.00 $960,000.00 $1,140,000.00 Fixed Costs: Salary Costs $540,000 $540,000 $540,000 $540,000 $540,000 Fringe Benefits $ 135,000.00 $ 135,000.00 $ 135,000.00 $ 135,000.00 $ 135,000.00 Rent $ 55,000.00 $ 55,000.00 $ 55,000.00 $ 55,000.00 $ 55,000.00 Operating Cost $ 120,000.00 $ 120,000.00 $ 120,000.00 $ 120,000.00 $ 120,000.00 Marginal Fixed Costs $850,000 $850,000 $850,000 $850,000 $850,000 Total Marginal Costs $ 1,270,000.00 $ 1,450,000.00 $ 1,630,000.00 $ 1,810,000.00 $ 1,990,000.00 Annual Marginal Profit $ (150,000.00) $ 150,000.00 $ 450,000.00 $ 750,000.00 $ 1,050,000.00 Cumulative Profit Margin $ (150,000.00) $ - 0 $ 450,000.00 $ 1,200,000.00 $ 2,250,000.00 Question: Below is a marginal P&L for this business opportunity. Based on that analysis, should this opportunity be pursued. Explain your decision. Answer: This opportunity should be pursued. This is because the opportunity breaks even after only two years and all the other years the profits are increasing meaning that it is a profitable venture. Sheet1 EnVision Survey Results The survey located below was given to 5,000 randomly selected people who live the Atlanta area, this chart reflects their opinions. Responses Totals Ques 1 Ques 2 Ques 3 Ques 4 Ques 5 Very favorable Favorable Indifferent Not too favorable Very unfavorable Totals Survey Questions 1. How do you feel about having a new, environmentally friendly, state-of-the-art manufacturing facility built in the Atlanta area? a. Very favorable b. Favorable c. Indifferent d. Not too favorable e. Very unfavorable 2. How do you feel about the use of zero emission vehicles? a. Very favorable b. Favorable c. Indifferent d. Not too favorable e. Very unfavorable 3. What is your viewpoint of the creation of more jobs in the area? a. Very favorable b. Favorable c. Indifferent d. Not too favorable e. Very unfavorable 4. How do you feel about Atlanta giving tax incentives to a company moving to this area? a. Very favorable b. Favorable c. Indifferent d. Not too favorable e. Very unfavorable 5. What is your viewpoint of living in a clean, toxic-free environment? a. Very favorable b. Favorable c. Indifferent d. Not too favorable e. Very unfavorable

Paper For Above instruction

The data provided from the Healthways Clinic budget report, expense forecasts, breakeven analysis, profit and loss projections, and survey results offer valuable insights into the operational and strategic aspects of healthcare management. Analyzing these figures illuminates key financial and operational trends that are critical for decision-making and future planning within healthcare organizations.

Financial Performance and Operational Efficiency

Firstly, the analysis of the June 2018 budget report reveals that the Full-Time Equivalents (FTE) for HealthWays employees remain consistent with estimates, indicating effective staffing management. Maintaining this balance is essential to ensure that personnel costs align with patient demand, thereby optimizing resource utilization. However, discrepancies in encounter numbers—where established patient visits were underestimated and new patient counts overestimated—highlight the need for more accurate forecasting techniques. Underestimating encounters could lead to resource shortages, affecting patient care quality, while overestimating may result in unnecessary expenses.

Non-personnel expenses, particularly medical supplies and overhead, exceeded budget estimates, signaling potential underestimations or unexpected costs. To mitigate this, HealthWays should adopt more precise costing models and negotiate better procurement terms to control expenses. Over time, such measures will improve budget accuracy and financial sustainability.

Impact of Expense Forecasting and Trend Analysis

The expense forecasting scenario underscores the importance of projecting costs over the fiscal year, including fixed, variable, and one-time expenses. The projected increases in expenses due to new technicians, as well as the proportional scaling of variable costs based on procedure volume, exemplify prudent financial planning. Accurate forecasting helps organizations anticipate resource needs and avoid resource shortages or excesses that can impair operational efficiency.

Viability of New Services: Break-Even Analysis

The breakeven analysis indicates that the anticipated demand of 8,000 units falls short of the 10,682 units required to cover fixed and variable costs, rendering the new service financially unviable under current assumptions. Without modifications—such as reducing fixed costs or variable costs—pursuing this service may lead to financial losses. However, strategies like negotiating lower fixed costs, increasing the price point, or expanding the capacity could enhance viability, aligning service offerings with organizational financial objectives.

Profitability Projections and Strategic Growth

The marginal profit and loss scenario demonstrates promising growth potential. The analysis predicts that, starting from a loss in the first year due to initial setup costs, the service will generate increasing profits in subsequent years, reaching over one million dollars by year five. This trend supports a strategic investment in expanding the procedure, assuming initial investments are manageable and market demand remains stable. Organizations must, however, remain vigilant about cost control and market dynamics to sustain profitability.

Community and Environmental Considerations

The survey results reflect positive community support for environmentally sustainable initiatives, such as building eco-friendly facilities and adopting zero-emission vehicles. Favorable opinions regarding job creation and living in a clean environment provide strategic opportunities for healthcare organizations to strengthen their corporate social responsibility (CSR) programs. Incorporating environmentally friendly practices can improve public perception, enhance community relations, and potentially provide competitive advantages in attracting both patients and staff.

Strategic Recommendations

Based on the comprehensive analysis, HealthWays should pursue a multifaceted strategy. Priorities include refining budgeting processes for more accurate forecast models, reducing unnecessary expenses, and exploring operational efficiencies. For new services, detailed profitability assessments should be conducted before launch, considering cost reductions and capacity adjustments. Additionally, capitalizing on community support through CSR initiatives can foster goodwill and facilitate smoother project implementation.

Ultimately, integrating financial insights with community engagement can position HealthWays for sustainable growth, improved patient outcomes, and strengthened community ties. Regular review and adjustment of strategies, coupled with ongoing financial analysis, will ensure the organization remains resilient against market and operational risks.

References

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