Premium Essay

Operational Budget

In: Business and Management

Submitted By clsmithh1
Words 1439
Pages 6
Phase 4 DB

HCM410-1303B-02
September 14, 2013
Operational Budget with addition of 4 new areas

Introduction
The Krona Community Hospital, established in 1977, is a 60-bed, acute care hospital located in Banconota County. They currently offer a full range of health care services and maintain a staff of almost 100 physicians and specialists, 400 employees, as well as numerous volunteers. They are currently fully accredited by The Joint Commission.

A private, not-for profit health care chain called Nouveau Health has taken over the management of Krona Hospital. The new facility that has been proposed to the state officials for approval, will include 74 acute care beds, all of which will be private. It will also include four observation rooms, four surgical operating rooms, a 24-hour emergency center, a maternity department including one C-section room and an intensive care unit. It will also have extensive support services such as physical therapy and cardiac rehabilitation.

In order for the new facility to be a success, we must prepare next year’s financial plan and operational budget. This can be accomplished through careful planning, forecasting, and finance management. First, we need to expand the budget and take into consideration any new services being offered. We have $3 million we can use for additional staff, maintenance and other services.

Funding sources
The primary source of funding is through government health insurance programs. Medicare is the largest source of funding and makes up approximately 40% of the total funding for health care facilities. A second government funding opportunity is Medicaid, which is a joint responsibility of the Federal and State governments. Because of their quick reimbursement turnaround time, many hospitals rely on those reimbursements to fund the overhead costs of the facility and pay the salaries...

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