Define operational budget for krona community hospital

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Reference no: EM13725228

As a member of the finance team, you have been asked to forecast the upcoming year's operational budget for Krona Community Hospital. Look 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:

KRONA 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

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

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.
Understand health care financial statements
Comprehend the principles of health care accounting.
Apply cost information
Develop an understanding of budgeting and forecasting.

Reference no: EM13725228

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