You are the Budget Director for Alamo Hospice a mid-size hospice organization. You will develop a comprehensive budget and create the associated performance story for Next Year that describes the results the organization is planning to produce. Your budget should support your organizational goals and objectives. You will develop schedules that will enable you to present the budget to the Board of Directors for Approval. You will be given a set of data for the estimated Current Year (an extrapolated annualized amount), as well as historical data from 1 Year Ago (Actual data) and 2 Years Ago (Actual Data). You will develop the budgeted financial and statistical information for the Next Year that utilizes the historical information as a basis. The accompanying Excel spreadsheet will provide you a template for development of the key information. You will be asked to develop and defend assumptions related to the development of the budget. Objectives This project will enable you to utilize and demonstrate a wide variety of knowledge and skill learned in this class. Specifically, you will be asked to: 1. Identify and apply assumptions that and impact the health care market. 2. Demonstrate how certain economic principles impact the operations of a health care organization. 3. Identify the payment mechanisms used by major third party payers 4. Show the impact of financing mechanisms on the operations of a health care organization. 5. Apply financial management skills, including Excel spreadsheet development, business model construction, productivity management, and margin analysis to achieve organizational objectives. 6. Develop a compelling financial performance story that results in the approval of the budget by a Board of Directors. Relevance Our Hospice example represents the kinds of issues found in most health care organizations. The revenue represents multiple types of payors and payment systems. The “products” are simple and straightforward and easy to compute. On the expense side, you will see the impacts of productivity, fixed and variable costs and incorporate capital costs into the budget development process. These activities and concepts are applicable to most other healthcare organizations, including hospitals, physician offices, long term care facilities, surgery centers, etc.
