Powerpoint Needed

Module 3: Finance and Budgeting

DeMario J. Stackhouse

MHA – 599

Dr. Tina Evans

Trident University International

Finance and Budgeting

The construction of the Golden Age Hospital will require a reasonable amount of money to ensure that the facility constructed meet the standards stipulated in the layout. For instance, to build a 550-bed capacity, the management of the facility should have a budget of close to $ 800 million. The amount will be used to construct primary supporting that will help to provide quality health care services to the targeted groups (Young, & Kroth, 2018). The amount will also be enough to purchase all medical equipment that will be used to offer specialized services to the aging population. As such, it is appropriate for the sponsor of the project to avail all financial requirements needed to finish the construction project.

Even though the government will procure most of the health care equipment, legal procurement procedures should be followed. Doing so will help to ensure that all equipment purchased are standard and are capable of offering quality health care services to the targeted groups. As such, if the government should make all purchases on its own, people assigned to budget and procure that equipment should know to ensure they purchase useful items (Young, & Kroth, 2018). Purchasing of the right equipment will help to provide quality health care services to patients. Also, while making procurement activities, technological concepts should be considered to ensure that procured equipment does not become obsolete quickly with changes and advancement in technology.

Since most of the clients who will be served within the facility will be 65 years and above, it implies that they will only be having Federal Medicare health insurance. Intuitively, there is a need to know how Medicare health coverage will be handled to ensure that all patients access all health care services. Also, the Golden Age Hospital should have competent financial professionals to manage funds properly.

Furthermore, the amounts will be considerate and enough to run all operations of the facility's activities. The facility will maintain this by ensuring that all governments' contributions are disbursed in time, and all payments from individual patients are collected in time. Moreover, the management of the GAH should make reasonable financial projections to ensuring operating costs do not exceed the total income that might result in losses.

Medicare Prospective Payment System

The reimbursements by the government will be done based on the predefined amounts not according to the cost incurred when treating a patient. In doing so, the government should ensure that reimbursement is done in time to facilitate the smooth running of all the facility's operations (Bieberstein, Bose, Walker & Lynch, 2015). Also, this will help to avail enough financial resources for the facility to enable it to run its activities well.

The reimbursements made by the government should be enough to enable the facility to offer quality services. Consequently, this will generate enough financial resources that will allow the facility to make some expansion to increase services delivery (Burgess, Shaw & Kellas, 2011). The disbursement of all government's financial supports and incentives should be made at the beginning of every year. The latter will allow for proper planning and allocation of resources to all departments to facilitate for running all organization's activities to ensure the smooth running of operations.

Moreover, prospective payment should be considerate. Besides, the government should not strictly assess the amounts spent by the Golden Age Hospital to determine the amount of medical insurance fund to offer to health care facilities in the region. Since the GAH will be mainly offering specialized health care services to the old, the government should not interfere with their operation.

The General Age Hospital Project

A To be filled by the student	B To be filled by the student	C Filled by Instructor	D To be filled by the student	E Filled by Instructor	F To be filled by the student
Service / Treatment	Estimated Medicare reimbursement to GAH. (each 10 to 60 thousands of dollars)	Projected number of procedures/treatments performed annually	Total income B*C	GAH projected performance relative to federal standards	GAH projected annual gain (or loss). D – D*E
Treatment ABC	$10,000	75	$750,000	80%	$150,000 (do not add this line to total)
Outpatient Services	$31,000	85	$2,635,000	75%	$658,750
Inpatient Services	$50,000	50	$2,500,000	110%	-$250,000
Specialty Services	$10,000	200	$2,000,000	80%	$400,000
Physical Therapy	$29,000	150	$4,350,000	90%	$435,000
Cardiology	$49,000	50	$2,450,000	120%	-$490,000
Neurology	$21,000	100	$2,100,000	100%	$0
Oncology	$12,000	60	$720,000	75%	$180,000
Orthopedics	$19,000	75	$1,425,000	85%	$285,000
Geriatric	$14,000	110	$1,540,000	95%	$77,000
Miscellaneous expenses	$10,000	25	$250,000	%250	-$375, 000 (minus)

Interpretation

The net loss illustrates that the hospital is likely to incur more profit than expenses in the first year of operation. The latter is because it will have more income than the amount the costs needed to offer the services provided. As such, there is a need to implement suitable measures to reduce or minimize expenses for the facility (Burns & Muller, 2018). This will ensure continued growth and increased profit, in the years to come.

Conclusion

Conclusively, the results obtained from the calculations show that the Golden Age Hospital will make a loss of $1,115,000 during the first year of operation. The main reason why the facility is likely to cause damages is that its total expenses will excess of the total income that will be generated from its services. Therefore, the management of the GAH, project committee, and stakeholders should put appropriate measures. Putting appropriate measures will ensure that the Golden Age Hospital has enough financial resources to run its activities.

Recommendations

According to the above results, the GAH is likely to make losses in the first year of operation. Therefore, it is appropriate for the management, and the stakeholders of the project to consider the following recommendations to minimize or avoid making massive losses in the futures:

i. Increase the charges of services that require more resources and advanced technology to offer. For instance, the management needs to increase costs on surgical services and radiotherapy, which require more attention and resources to provide to patients. In doing so, the facility will be able to generate enough financial resources that will be enough to run all its operations as well as making reasonable profits.

ii. The management of the Golden Age Hospital should set a limit on the number of services offered to specialized services to reduce expenses.

iii. The facility should apply for enough government support and incentives to help to generate income that will enable it to offer quality health care services to all patients. Besides, using for government incentives and support will help the Golden Age Hospital to provide all health care services need by patients.

iv. Lastly, the Golden Age Hospital should reduce its annual miscellaneous expenses. The latter will help in reducing the total costs for the facility and thus, will help in enabling the Golden Age Hospital to offer quality services to its clients.

References

Bieberstein, N., Bose, S., Walker, L., & Lynch, A. (2015). Impact of service-oriented architecture on enterprise systems, organizational structures, and individuals. IBM systems journal, 44(4), 691-708.

Burgess, C., Shaw, C. & Kellas, J. (2011). Health & social care. Harlow: Heinemann.

Burns, L. R., & Muller, R. W. (2018). Hospital-physician Collaboration: Landscape of Economic Integration and Impact on Clinical Integration. Milbank Quarterly, 86(3), 375-434.

Young, K. M., & Kroth, P. J. (2018). Sultz & Young's health care USA: Understanding its organization and delivery.