Reference no: EM132327170 , Length: word count : 2000
Assignment
Learning Outcomes
1. Apply basic spreadsheet skills to undertake financial analysis and budgeting tasks.
2. Appreciate the distinctive features of health in economic terms.
3. Discuss how accounting functions as a tool in the decision making, planning and control process.
4. Outline the purpose and function of the three main financial reports, namely the Balance Sheet, the Income Statement and the Cash Flow Statement.
5. Apply commonly used techniques to analyse an organisation's financial statements.
6. Explain the nature of the relationship between volume of activity, costs and profit and how knowledge of this relationship can be used to make decisions and assess risk.
7. Describe the budgeting and planning process.
8. Identify the methods commonly applied in making capital investment decisions.
9. Appreciate the role of health financing in the broader context, including different approaches to health funding.
Requirements
1. Produce an ABF budget using the:
a. benchmark ALOS
b. expected number of patients next year
c. NWAU (inlier)
d. National Efficient Price.
2. To educate the clinical staff on how ABF works you must prepare a one-page flyer on:
a. what is ABF
b. why is ABF used as a funding model
c. how the ABF budget (in Question 1) was calculated
Your flyer should be visually-engaging and simple enough for a non-finance audience to understand. You may consider using tables, graphs or infographics.
3. Produce a block-funded budget using the:
a. current ALOS
b. expected number of patients next year
c. daily cost of stay (ex. X-ray, Path., Scripts)
d. total cost of each service type (i.e. expected number of patients next year, average number of services, average cost of services).
What is the effect if the benchmark ALOS was used to calculate the block-funded budget?
4. The General Medicine Division’s clinical managers advise you that the expected number of patients next year should be 4% higher, for the following DRGs: F74A, F76B, E61B, E62B.
Calculate:
a. the change to these DRGs under the ABF budget (calculated in Question 1)
b. the effect to the overall ABF budget, as a result of the change.
5. The CFO has asked to prepare scenarios where there is a 5% and 10% reduction to the National Efficient Price. Using the expected number of patients next year, as advised by the clinical managers (i.e. with the 4% increase applied to the relevant DRGs), calculate:
a. the impact to the ABF budget for both scenarios (5% and 10% reduction to the National Efficient Price).
6. The CFO has asked that you prepare scenarios for the block-funded budget (calculated in Question 3) that shows a 1% to 10% (i.e. 1%, 2%, 3%... 10%) reduction in the daily cost of stay. This must be prepared using:
a. the benchmark ALOS
b. the expected number of patients next year, as advised by the clinical managers (i.e. with the 4% increase applied to the relevant DRGs)
Present the overall budget outcome for each scenario (i.e. 1% to 10% reduction in the daily cost of stay) on a single graph.
7. You have been requested by the Board to prepare a paper on ABF, which includes:
a. the advantages and disadvantages of ABF
b. the risks of preparing an ABF budget
c. potential strategies to mitigate the risks of an ABF budget
d. what might be the opportunities to engage clinical managers across the hospital to participate in the ABF budget preparation process and ongoing ABF governance throughout the financial year.
8. Prepare a short commentary piece (no longer that one page) on what insights you have gained from the Major Assignment and the Financial Management and Economics in
Health Care topic overall. Your reflection should consider what new skills and knowledge you may have acquired; or alternatively, what existing skills and knowledge you may have extended. It would be interesting to understand what some opportunities at your workplace might be where you can apply your skills and knowledge.
Remember – these are your views and there should not be any need to reference textbooks or articles.
Some tools to guide you in this reflective learning exercise are listed in the Resources section below; particularly, the ‘4Rs of Reflective Thinking’ model.
Attachment:- Case Study.rar