How to write a Healthcare Budget Request (Solved)

W2A2 Executive Summary

W4A3 Projected Expenses and Revenues (Five Year)

<Include your 5-year projected expenses and revenue here, as completed in W4A3, Part 1. Copy your final worksheet here and include your analysis.>

Table of Contents

Return on investment (ROI) analysis represents an approximate measure of an investment’s profitability. This measure is often used to guide investors in measuring the value of stock shares and to make decisions about purchasing a business (Masters et al., 2017). While taking this into consideration, my plan is to expand my healthcare business and include new departments that can generate more revenue. The Excel worksheet provided below highlights my investments and projected revenue for 5 years.

When evaluating profitability of a business, ROI analysis is a key tool to guide future decision making. The initial expenses for my healthcare business is approximately $1000000 which includes salaries, renovation, machinery, furniture, and other fixed assets. The total revenue generated for the five years period is approximately $1410000 indicating that the business is profitable. The healthcare business expansion is dependent on adding a few departments like physiotherapy, surgical, and outpatient care. These departments are considered because they have a significant effect on reimbursements and they attract many patients. The estimated financial impact of this project is realizable within the identified timeframe, but further analysis throughout the period could provide a better indication.

Return on investment analysis is an efficient measure to assess and compare organizational performance. When interpreting the results, both positive and negative values guide significant changes to a business. Overall, ROI is calculated by subtracting the initial cost of the investment from its final value, then dividing this new number by the cost of the investment, and finally, multiplying it by 100 (Milenova et al., 2022). Although this measure fails to account for the time taken to invest, it provides investors with a margin to predict future trends of the business. According to the provided ROI analysis, the first year produces a negative value of -3.5% meaning that the business did not make a profit. The subsequent years produce values of 15.4%, 28.85%, 58.40%, and 111.12% demonstrating increasing profitability with time. At the end of the 5-year period, the business will have made a profit of 11.12% meaning that successful years will even yield better results.

Healthcare services worldwide are faced with challenges of improving quality and reducing costs making ROI analysis a key tool for successful improvements. ROI analysis is increasingly recommended for evaluating financial returns in healthcare (Milenova et al., 2022). This measure calculates costs against its benefits, but it can also misrepresent reality due to its inability to incorporate some crucial programme outcomes. My ROI analysis only considers the major investments into the new business. I believe the positive results provide support for implementing the business plan, but further insight can be provided by considering other areas of productivity.

The details of the ROI analysis are shown in the excel file below;

Expenses/cost	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5	Grand Total

Start up expenses
Furniture & Fixture	100000
Salaries	100000
Machinery	500000
Renovation	150000
Other Expenses	150000
Total Start Up Expenses	1000000

Operating Expenses
Furniture & Fixture		8000	9000	9500	11000	13800
Machinery		50000	52000	57000	65000	75000
Building Renovation		30000	35000	45000	53000	65000
Salaries		100000	130000	140000	142000	145000
Total Operating Expenses		188000	226000	251500	271000	298800

Total Expenses		188000	226000	251500	271000	298800

Revenue/Savings
Physiotherapy		20000	60000	65000	100000	210000
Surgical Cases		45000	100000	140000	180000	250000
Outpatient Services		70000	130000	185000	275000	400000
Reimbursements		50000	90000	150000	300000	550000
Total Revenue/Savings	0	185000	380000	540000	855000	1410000

Return On Investment		-3.50%	15.40%	28.85%	58.40%	111.12%

References

Masters, R., Anwar, E., Collins, B., Cookson, R., & Capewell, S. (2017). Return on investment of public health interventions: A systematic review. Journal of epidemiology and community health, 71(8), 827–834. https://doi.org/10.1136/jech-2016-208141

Milenova, M., Nahabedian, N., Grey, B., Soukup, T., & Henderson, C. (2022). Identifying and understanding benefits associated with return-on-investment from large-scale healthcare Quality Improvement programmes: an integrative systematic literature review. BMC health services research, 22(1), 1-23. https://doi.org/10.1186/s12913-022-08171-3

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<Include your projected 5-year budget here, as completed in W6A4, Part 1. Copy your final worksheet here and include your analysis.>

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How to write a Healthcare Budget Request (Solved)

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