Below is the focused operational budget for the upcoming year in the Krona Hospital
KRONA HOSPITAL OPERATING BUDGET FOR 20XX
Revenues
the upcoming year’s operational budget
Inpatient
$ 25,000,000
$ 27,500,000.0
Outpatient
15,000,000
17250000
Emergency Room
10,000,000
10,000,000
Laboratory
5,000,000
5,000,000
Pharmacy
1,500,000
1575000
Home Health and Hospice
1,500,000
1725000
Ambulance Services
950,000
950,000
Substance Abuse
250,000
250,000
Other
850,000
850,000
Subtotal
$ 60,050,000
$ 65,100,000.00
Less Chartiy Care
18,000,000
18,000,001
Net Revenues
$ 42,050,000
$ 47,099,999
Expenses
Payroll (including nursing salaries)
$ 12,500,000
$ 13,750,000.0
Benefits
3,000,000
$ 3,300,000.0
Contract Labor
100,000
100,000
Insurance
300,000
300,000
General Services (laundry, security, etc)
3,000,000
3,000,000
Depreciation
1,500,000
1,500,000
Interest Expense
300,000
300,000
Professional Services
10,000,000
10,000,000
Total Operating Expenses
$ 30,700,000
$ 32,250,000
Net Income
$ 11,350,000
$ 14,849,999
There are several ways to increase the revenue the hospital is gaining. One of the methods is to increase the charges over the patients. Increasing the charges by a certain rate will increase the revenue by the same rate. Hiking the cost of drugs is another effective method. Drugs sold or prescribed at the hospital come at a certain cost. Increasing the cost of drugs will boost the revenue collected. Looking for incentives from the government is very effective as well. When the government, whether federal or state, usually allocate a certain amount of funds. Such funds can be used to reduce the cost of operation such as paying for water or electricity bill.
There is a need to increase payroll and benefits. First, it keeps the employees motivated enough to go an extra length while performing their duties are nurses or other staff in the hospital. The other reason there is the need to increase the payroll and benefits is to keep up with the inflation. The currency keeps loosing value and by the end of the day what could be purchased yesterday with just a dollar, tomorrow someone will require two dollars to purchase the same item. The third reason is to fulfil the contractual agreement. While getting employed, some of the employees have contracts that indicate that their salaries and benefits will be increased gradually or at a certain rate that they will agree upon.
Chief executive officer more often has control over the daily operations of the company. He or she, therefore, has the overall picture of how much he is required to allocate every department. Department heads, on the other hand, have the detailed activities under his or her department. He or she, therefore, knows how much to allocate which activity or who. Accountants keep the records of all financial activities taking place in the company.
Reference
Sorenson, R. D. (2013). The principal’s guide to school budgeting.
Waxman, K. T. (2015). Finance and budgeting made simple: Essential skills for nurses.