Financial Plan Development PowerPoint Presentation with Speaker Notes

2008 Budget % Change

from 2008

2009 (Projection)

Based on these 2008 assumptions: a 3% overall "inflation rate" in 2009, with the cost of oil disproportionately affecting some expense items.

Revenues

Net Patient Revenue $418,509 7% $447,805

Patient revenue will increase with little or no increase in patient volume, due to new managed care contracts

Other Revenue $2,805 15% $3,225 Marketing's plan to increase donations by 15% Total Revenues $421,314 7% $451,030

Expenses

Salaries and benefits $214,129 3% $220,553

Salaries will hold to a 3% overall increase in cost, no increase in labor hours due to no increase in patient volume.

Supplies $71,346 3% $73,487

Supplies cost will increase more due to the rising cost of oil and its effect on the cost of plastics and transporation

Physician and professional fees $107,065 3% $110,277 contracts for fees have a built-in 3% increase

Utilities $1,164 5% $1,222 Utilities cost will increase more due to the rising cost of oil.

Other $1,784 3% $1,838

Depreciation & Amorization ("non-cash" expenses) $24,955 20% $29,946

Some high-cost equipment (air conditioning, telephone system, all patient beds and headwalls) will have to be replaced this year, and "depreciation" will rise sharply.

Patton - Fuller Community Hospital Operating Budget

2009 (In Thousands)

(Projection)

Interest $3,597 3% $3,705 The repayment plan for any monies borrowed in 2009 will not come due until 2010.

Provision for doubtful accounts $13,383 10% $14,721 The renegotiation of Managed Care plans could make collections less certain.

Total Expenses $437,424 4% $455,749 Total expenses will rise 4%

Operating Income ($16,110) ($4,719) Operating Income will improve, with the hosptial's loss reduced by 2/3

Non-operating Income (Loss)

Investment Income $264 15% $304 The Market has been going up for years, the "bull market" should continue in 2009.

Net Income ($15,846) ($4,416) The hospital's loss will be further reduced by good returns on investment income.