# 5.4 General Hospital

In:

Submitted By Bswtgrl6
Words 264
Pages 2
5.4 – General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:
Fixed Costs \$10,000,000
Variable cost per inpatient day \$200
Charge (revenue) per inpatient day \$1,000
The hospital expects to have a patient load of 15,000 inpatient days next year.

a. Construct the hospital’s base case projected P&L statement.

Total revenues (\$1,000 x 15,000) \$15,000,000
Total variable costs (\$200 x 15,000) \$ 3,000,000
Total contribution margin (\$800 x 15,000) \$12,000,000
Fixed costs \$10,000,000
Profit \$2,000,000

b. What is the hospital’s breakeven point?

Contribution Margin x Volume = Fixed Costs
\$800 x V = \$10,000,000
V = 10,000,000/800
V = 12,500 visits to break even

c. What volume is required to provide a profit of \$1,000,000? A profit of \$500,000?
To obtain a profit of \$1,000,000, the total contribution margin should be \$1,000,000 greater than the fixed costs (\$10,000,000), for a value of \$11,000,000. This amount must also equal the contribution margin multiplied volume, \$800 x Volume = \$11,000,000. The volume = \$11,000,000/\$800 = 13,750 visits

Similarly, to obtain a profit of \$500,000, the total contribution margin should be \$500,000 greater than the fixed costs (\$10,000,000), for a value of \$10,500,000. This amount must also equal the contribution margin multiplied volume, \$800 x Volume = \$10,500,000. The volume = \$10,500,000/\$800 = 13,125

### Similar Documents

Free Essay

#### Legal Writing

...                                              :  No. 04-1234                                                         : GENERAL HOSPITAL                           : 200 City Avenue                                  : Anywhere, PA 19100                            :                         Defendant                      : PLAINTIFFS' MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT'S PRELIMINARY OBJECTIONS IN THE NATURE OF A DEMURRER Statement of Facts Laura Spencer was admitted to General Hospital on May 1, 2003. Lucky Spencer was delivered at 11:52 p.m. The following morning a nurse brought the baby into the plaintiff’s room in a rolling crib and then left. After about fifteen minutes of nursing, Laura feeling tired called the nurse to come and take the baby back to the nursery. When the nurse returned she was hurried and appeared tired. She picked up the baby to the transport him back to the nursery, but failed to put the baby into the rolling crib per hospital policy. Instead, she held the baby in one arm and attempted to open and close the door to plaintiff’s room. The nurse lost her grip and dropped the newborn on his head onto the floor. The plaintiff immediately heard the nurse screaming “oh my God, I dropped the baby” followed by the sound of the baby’s head hitting the floor. She then heard her newborn screaming and then saw his blood running under her closed hospital door. Moments later an orderly and a nurse burst into Laura Spencer’s room and forcibly put her into her...

Words: 1080 - Pages: 5

#### Character Analysis: When Calls The Heart

...Full disclosure--I was never a soap opera fan, but my grandmother and mother watched them when I was quite young (actually before Jack Wagner even graced the screen of General Hospital). In spite of this fissure in my television viewing, for some reason, I remember being familiar with the name Jack Wagner and even recognizing him when he appeared as Bill Avery in season one of When Calls the Heart. I was a tremendous fan of his character. In fact, I was known to banter back and forth with other younger Hearties about why Bill was a better and more handsome Mountie than Jack. In spite of the unpredictable nature of Bill as played so effortlessly by Jack, I still revel in the sense of humor and intensity of passion he skillfully brings to this character every time we witness his prowess on screen. Just this week, I was finally able to chat with Jack, and this is one interview you do NOT want to disregard. We discussed a wide variety of topics including his early acting roles, his ever-expanding work for the Hallmark Channel, and even a bit about his charity endeavors. RH: Jack, I appreciate you...

Words: 972 - Pages: 4

Free Essay

...op yo rP os t NA0186 A Telemedicine Opportunity or a Distraction? Janis L. Gogan, Bentley University Monica J. Garfield, Bentley University S hawn Farrell, Executive Director of the Partners TeleStroke program, glanced at his smart phone while striding toward his office at Massachusetts General Hospital (MGH) in Boston; he nearly collided with Lee Schwamm, MD. Knowing that Dr. Schwamm’s overfull schedule as Vice Chairman of Neurology and Director of Acute Stroke and TeleStroke Services meant he had little time to chat, Farrell used the near-collision as an opportunity to quickly mention a recent conversation with a nurse from Falmouth Hospital on Cape Cod. An active participant in the TeleStroke service, Falmouth Hospital was regularly honored for its adherence to best practices in stroke care. “Recently some Falmouth nurses asked how we can convince other MGH departments—such as in critical-care pediatrics—to provide similar telemedicine consultation services,” Farrell stated, adding “Their nurse stroke coordinator, Jean Estes, is a huge cheerleader for TeleStroke.” Dr. Schwamm continued moving toward his office as he replied, No tC Shawn, don’t we already have too much to do? I need to see patients, complete the analysis for a study I am working on, submit a grant application. Next week I will speak at an international neurology conference. Telemedicine can certainly be invaluable in many clinical domains, but there just are not enough...

Words: 9194 - Pages: 37

...MGT/230 Monica Frechette The selected organization for this topic is Massachusetts General Hospital (Mass General or MGH). MGH delivers excellence in patient care, which is advanced through innovative research and education of the diverse communities it serves. A description of MGH’s organizational structure will be provided. Two other organizational structures will be selected for the use of contrast and comparison to MGH. Lastly, the organizational functions of the various structures will be identified to determine influence on the organizational structure. MGH has most recently been ranked as the top hospital overall in the United States by U.S. News & World Report. It is ranked nationally in all adult specialties as well as for pediatric specialties. MGH was the original teaching affiliate of Harvard Medical School (HMS) and is currently one of over a dozen hospitals affiliated with HMS. MGH is owned by Partners HealthCare, which was formed by MGH and Brigham and Women's Hospital in 1994. With the opening of the Lunder Building in 2011, MGH is now the largest hospital in Massachusetts with 1,051 beds to service its community. Additionally, MGH has most recently been ranked as the top hospital overall in the United States by U.S. News & World Report 2012 – 2013 – a spot previously held by a different hospital. All these progressive decisions moving the hospital forward must begin somewhere. By establishing the organizational hierarchy and flow of...

Words: 910 - Pages: 4

Free Essay

#### Mhm 525

...vast majority of health care decisions made for families and women use health services more frequently than men (Anniston, 2012). Most women are dissatisfied with how they receive care, which is often in settings that does not support the unique aspects of care for women (Milliken, 2011). Significant opportunity exists to develop services targeting women, and even to certain age specific groups within this population making meaningful distinction in the marketplace, improving quality of care, and increasing patient satisfaction. These opportunities can range from focused niche service development to comprehensive approaches that incorporate a wide range of programs. Geriatric Patients Sentara Norfolk General Hospital has also recognizing the...

Words: 884 - Pages: 4

#### Psychiatric Clinical Nurse

...Mahmoud Azzam Abu Othman/ 1370022. Submitted to: Dr. Ayman Mansour The Need of Emergency Psychiatric Triage and Qualified Psychiatric Clinical Nurse Specialist (CNS) in Emergency Department of General Hospital. General emergency nurses are primarily trained to deal and respond to patients with physical medical complaints and occasionally do not understand psychiatric clinical emergencies that reflect the impact on mental health patients (Abdur-Razzaq, 2011). In other hand, emergency nurses often avoid mentally ill patients and didn't see it as part of their work (Happell & Sharrock, 2002). Furthermore, general nurse is lacking the skills of assessment and management of psychiatric patients presenting to emergency department which counted...

Words: 942 - Pages: 4

#### None

...Week 4 5.4. General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services: Fixed costs \$10,000,000 Variable cost per inpatient day \$200 Charge (revenue) per inpatient day \$1,000 The hospital expects to have a patient load of 15,000 inpatient days next year. a. Construct the hospitals base case projected P & L statement. b. What is the hospitals breakeven point? c. What volume is required to provide a profit of \$1,000,000? A profit of \$500,000? d. Now assume that 20 percent of the hospitals inpatient days come from a managed care plan that wants a 25 percent discount from charges. Should the hospital agree to the discount proposal? a. Construct the hospital’s base case projected P & L statement. Projected P& L statement Per Patient (i) Fixed Costs = \$10,0000,00 (ii) Variable costs = 200*15,000 = \$3,000,000 (iii) Total Costs (i + ii) = \$13,000,000 (iv) Total Revenue = 1000*15000 = \$15,000,000 (v) Profit (iv-iii) = \$2,000,000 (b.) What is the hospitals breakeven point? Breakeven point = Fixed Assets / Contribution per patient = \$10,000,000 / \$800 a= 12500 Patients (c.) What volume is required to provide a profit of \$1,000,000? Volume of sales required = (Fixed Cost + Desired profit) / Contribution per unit = (10,000,000 + 1,000...

Words: 509 - Pages: 3

#### Assignment

...reception of application form filled up through internet onlineform. After scrutinizing the data, they select applications for written test. 5.2: Evaluating reference and biographical data At the second stage of evaluating the data, they verifies the validity authenticity of theinformation presented on the form as well as reference of the employee through references. 5.3: Employment test This written test measures the candidates1. Analytical ability2. Computation ability3. Verbal skill4. Written skill5. General knowledgeMore above 65% marks ensures applicants pass. 5.4: Assessing candidate through interview Mainly three steps are followed in the selection procedure. In the first stage the candidatesare invited for a viva with sales and training manager, Dhaka in his Gulsan office. A humanresource manager also exist there. In this viva the candidates situation handle ability ismeasured. 46 Second phase: It is the viva with the general sales and operation manager ( GOSM), and trade marketingmanager .in this stage individual skill is measured. The question tries to measure out thefitness of the candidate for the post. Third phase: In this stage the applicant face the HRD customer development team (CDT) this phasemeasure the applicability of the applicants’ potential for the jobs. In these stage why theapplicant...

Words: 403 - Pages: 2

#### Mha Hw Chapeters 5-6

...Introduction to Healthcare Finance and Accounting MHA 525 Home #2 Chapter 5-6 5.1) Explain the differences between fixed cots, semi fixed cots, variable costs? Costs- can be classified by their relationship to the amount of services provided and relationship to unit (department) being analyzed. Cost does not equal cash flow. [Cost – referred to as activity, utilization or volume] Variable Costs are those costs that are expedited to increase and decrease with volume ( patient days, number of visits, gloves, syringes needed…)— in total variable costs the cost rate remains the same. Fixed Costs are the costs that are expected to remain constant regardless volume within some relevant range = ( is the range output [volume] over which the organizations cost structure holds) Semi-fixed costs are those that are fixed at two or more values within the relevant range. IA semi fixed cost is one that is [ fixed over some range of volume but the range is smaller than the relevant range used in analysis. Page 154 book 5.3 shows this ( complex ). 5.3) A. What is cost volume –profit (CVP) analysis? B. Why is it so useful to health service managers? A. Cost Volume Profit (CVP) is used to assess the effects of volume changes on costs- lets managers of alternative assumptions regarding costs, volume, processes. Total costs= Fixed + Total variable costs Cost-Volume-Profit (CVP) analysis is a managerial accounting technique that is concerned with...

Words: 2087 - Pages: 9

#### Health Finance

...Finance Assignment III: Chapter 5 1. Explain the differences between fixed costs, semi fixed costs and variable costs The differences between fixed costs, semi-fixed costs and variable costs has to do with the amount of services provided. Variable costs are cost that are expected to increase and decreases with volume (patient’s days, number of visits, etc...). Fixed costs are costs expected to remain constant regardless of volume. Semi-fixed costs are those that are fixed with in ranges that are less than the relevant range. 2. Total Costs are made up of what components? Total costs are made up of two components fixed costs + variable costs 8. What are the Critical Differences in profit analysis when conducted in a capitated environment versus a fee-for-service environment? In the fee-for service graph the total revenues line is sloping upwards.  However, in a capitated environment, the total revenues line is horizontal, which shows that total revenue is the same number regardless of volume as measured by the number of visits.  Under capitation, revenue is being driven by the insurance contract (I.e., by the premium payment and the number of covered lives, or enrollees).  This change in the revenue source is the core of the logic switch from fee-for-service to capitation; the clinic is being rewarded to manage the healthcare of the population served rather than merely to provide services.  10. a. What cost structure is best when a provider is primarily...

Words: 1019 - Pages: 5

#### Law Employment Contract Analysis

...Executive Summary This paper is about the concepts behind and an analysis of an employment contract between Sam Marafioti and the Sunnybrook Health Sciences Center. The goal of this paper is to better understand contract law and the legal, ethical and contractual issues that can arise when dealing with an employment contract. The paper begins by explaining the objective of the paper and the used in order to complete the objective. The methodology used is a five step process beginning with the clauses within the contract being defined. This creates an easier reference for a reader without any legal background. The clauses are stated in an easily understandable format in order to better understand the agreement used in the analysis. This precedes the section where all legal concepts within the contract are defined. The legal concepts are used in order to better understand the meaning of the contract. They explain both the what, and the why each clauses exists and how they interact with the signer. The ethical issues within the contract are then showcased. The law is considered the minimum standard of ethics and as such there can be ethical issues for the signer. The process of termination is then analysed to better understand how the clauses within the contract work in a real scenario and can prepare the reader for their own employment termination. Finally, my personal recommendations regarding legal issues and lessons learned are displayed. This section shows how the...

Words: 9375 - Pages: 38

Free Essay

#### C228 Draft

...and Excessive drinking (Memorial Health Care Systems, 2013). According to Picture of Health 2015, 66% of Hamilton County is in the overweight or obese and 75% of the adolescents are not participating in sufficient aerobic activities daily (Chattanooga-Hamilton County Health Department, 2015). Assessment of Needs and Risks Population Economic Status Assessment The population economic status assessment was used to determine the following. The estimated 2010 population for Hamilton County is 336,463 (USA.com, Hamilton County Population and Races, 2015). Of these, cultural demographics 73.9% were white and 20.2% were African American (Memorial Health Care Systems, 2013). In 2013 Hamilton county reported 5.2% of the total births and 5.4% of the deaths in the...

Words: 2294 - Pages: 10

Free Essay

#### Demographic Paper

...because we are across the river from one of the nation’s most popular gaming communities. With year round sunshine that attracts not only vacationers but also retirees. The aging population in our community is substantially large and is about to explode. Those born in the baby boom era following the end of World War II, between the years of 1946 and 1964 are just hitting the retirement age. We can expect to see our aging population grow and challenge our local health care facilities and the health care market in general over the next few years. Although the U.S. Census Bureau population estimates are not available for 2011 as of yet for our community, we can see on the quick facts chart below where we stood in 2010. People Quick Facts | Bullhead City, Arizona | Population, 2011 estimate | NA | Population, 2010 | 39,540 | Population, percent change, 2000 to 2010 | 17.1% | Population, 2000 | 33,769 | Persons under 5 years, percent, 2010 | 5.4% | Persons under 18 years, percent, 2010 | 19.6% | Persons 65 years and over, percent, 2010 | 23.9% | Female persons, percent, 2010 | 50.6% | (U.S. Census Bureau, 2012). As shown above, our small community grew by 17.1% over 10 years between 2000 and 2010. It is unknown how much that percentage could change between 2010 and 2020 based on the aging Baby Boomer population, but it is likely that it could double or even triple. Based on this information and that the cost of living is lower here than the...

Words: 1351 - Pages: 6

#### Good Marketing Strategies in South Africa Dept of Health

...…………………………….….5-7 3. Customer Satisfaction …………………………………..………………………..….7 3.1 Measuring Patient Satisfaction…………………………………………....…..8 3.1.1 Patient Satisfaction Measures…………………………………………...…..8-9 3.2 Managing Patient Satisfaction………………………………………….……..9-10 4. Communications Mix…………………………………………………………………...9 4.1 Informative Promotion …..…………………………………………….….….10 4.2 The Communications Mix…………………………………………….…..….10-11 4.3 Successes……………………………………………………………………..11-12 5. Advertising………………………………………………………………………..…..13 5.1 Social-Cause Advertising……………………………………………….....…14 5.2 The Message ………………………………………………………………….14 5.3 The Medium……………………………………………………………….…14-15 5.4 Measuring Advertising Effectiveness…………………………………….….15 6. Conclusion………………………..……………………………………………………..17 7. Recommendation………………..………………………………………………………17 8. References……………………………………………………………………………….18 1. INTRODUCTION Every organisation has various strategies to market their organisation. For an organisation to be successful, they have to develop a marketing strategy. In my report I will analyse four marketing strategies in relation to my organisation namely; relationship marketing, customer satisfaction, the communications mix and advertising. Each of these forms an important part of marketing in an organisation. 2. RELATIONSHIP MARKETING Relationship marketing is not about having a "buddy-buddy" relationship with customers;...

Words: 4094 - Pages: 17

Free Essay

#### Bioaccumulation of Toxics in Meat

...of both food and cash crops. The forests of the district are part of the only surviving high forests of Ghana. The current population of the WasaAmenfi West District is projected at 186,257 at a growth rate of 3.2% per annum which is the region’s growth rate. According to the 2000 population and Housing census, the district’s population was 156,256(http://wassaamenfiwest.ghanadistricts.gov.gh). This was projected at 3.2% within a period of six (6) years which yielded the projected figure in 2006. The district has a population density of 53.76 people per sq. km The occupational characteristic of the population has not changed much. Agriculture employs about 75.6% of the active labour force whilst manufacturing and processing employs about 5.4%. This percentage is employed by the two large expatriate timber processing firms located at MansoAmenfi and Samreboi. The services sector employs 7.5% whilst commerce...

Words: 2150 - Pages: 9