Law Week 9 Assignment- Healthcare Finance

Week 9 Assignment Learning Resources

Healthcare Finance

Required Reading

· Pink, G. H., & Song, P. H. (2020).  Gapinski’s understanding healthcare financial management (8th ed.). Health Administration Press.

· Chapter 5, “Financial Risk and Required Return” (pp. 147–189)

· Review: Chapter 11, “Capital Budgeting” (pp. 407–457)

· Chapter 14, “Financial Forecasting” (pp. 549–587)

Note: For this Assignment, review Chapter 11, which was assigned previously in this week’s Discussion.

· Document:  Week 9 Assignment Budget and Variance Excel Template (Excel spreadsheet)

Required Media

· Walden University, LLC. (2024). Preparing a performance report (flexible budget) [Video]. Walden University Canvas. https://waldenu.instructure.com

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Week 9 Assignment

Healthcare Finance

Budgeting and Variance Analysis

Budgeting is an important activity within every healthcare organization. The particular challenges encountered, however, can vary depending on the type of organization. A state or federally funded organization, for example, will likely have a budget that is allocated to it, and it needs to follow specific guidelines on how the money can be used. A for-profit organization, by contrast, will typically have more influence and flexibility in setting up its budget and making choices on matters such as how much to spend on marketing, patient care, or incentives for employees.

In addition to preparing budgets, as a healthcare administrator, you must also be able to evaluate whether or not you have achieved your budget using variance analysis. This is important because variance analysis measures the differences between the budget and actual results and provides administrators with a starting point for correcting financial performance. For this Assignment, you conduct a variance analysis for a healthcare organization.

To prepare for this Assignment: 

· Review the Week 9 Assignment document provided to you by the Instructor. Examine the budgeted and actual revenues and expenses for a hospital. Reflect on concepts of budgeting and variance.

· Review Chapter 5, Chapter 11, and Chapter 14 of Gapinski’s  Understanding Healthcare Financial Management.

Submit your “Week 9 Assignment Budget and Variance Excel Template,” to address the following:

· Determine the total variance between the planned and actual budgets for  Surgical Volume. Is the variance favorable or unfavorable?

· Determine the total variance between the planned and actual budgets for  Patient Days. Is the variance favorable or unfavorable?

· Determine the service-related variance for  Surgical Volume.

· Determine the service-related variance for  Patient Days.

· Prepare a flexible budget estimate. Present a side-by-side budget, flexible budget estimate, and the actual  Surgical Revenues.

· Prepare a flexible budget estimate. Present a side-by-side budget, flexible budget estimate, and the actual  Patient Expenses.

· Determine what variances are due to change in volume and what variances are due to change in rates.