For Tutor Arianna Rimes only

As a member of the finance team, you have been asked to forecast the upcoming year’s operational budget for Krona Community Hospital.* See Excell form below for last year’s budget. After reviewing specific data, internal input, and external input from various sources, you find that the executive management team would like the budget to reflect the following:

· 10% increase in inpatient revenue

· 15% increase in outpatient revenue

· 5% increase in pharmacy revenue

· 15% increase in home health and hospital revenue

· 10% increase in payroll and benefits

Note: The budget should be formatted to reflect the percentage increase or decrease from last year’s budget.

Additionally, provide discussion on the following:

· How might you increase revenue in each of the areas? Think outside of the box, and perform research to determine current trends in those areas.

· Why would there be a need to increase payroll, particularly nurses’ salaries?

· Provide an explanation as to how the Krona Community Hospital may be able to achieve an increase in the revenue areas that the chief executive officer (CEO) wishes you to address.

*

KILLSIDE HOSPITAL OPERATING BUDGET FOR 20XX

Revenues

Inpatient

$ 25,000,000

Outpatient

15,000,000

Emergency Room

10,000,000

Laboratory

5,000,000

Pharmacy

1,500,000

Home Health and Hospice

1,500,000

Ambulance Services

950,000

Substance Abuse

250,000

Other

850,000

Subtotal

$ 60,050,000

Less Chartiy Care

18,000,000

Net Revenues

$ 42,050,000

Expenses

Payroll (including nursing salaries)

$ 12,500,000

Benefits

3,000,000

Contract Labor

100,000

Insurance

300,000

General Services (laundary, security, etc)

3,000,000

Depreciation

1,500,000

Interest Expense

300,000

Professional Services

10,000,000

Total Operating Expenses

$ 30,700,000

Net Income

$ 11,350,000

Quality Management

Length:

300 words

Details:

· In any personal experience or a real-life story found on the Internet, discuss senior management's role in successful quality improvement programs.

· In general, what is senior management’s specific role in these large-scale strategic quality programs? Cheerleader? Role model? Decision maker? Resource provider? What else?

· Why must firms adopt the roles that you identified? What would happen if they did not fill those roles

· How should senior and middle management derive the metrics that they want to use to both monitor and communicate performance?