Finance Management in Health Services
Required
1. Read the above information carefully.
2. Based on this information, identify the following impacts (10 marks):
o The base number of nursing hours per week as planned to run the service.
o Express this as an FTE (assume a 38-hour week and no ADOs).
o Identify/calculate the nursing hours per weekend as planned to run the service.
o Identify/calculate the number of nursing evening shifts payable each week.
o The base number of reception staff hours per week as planned to run the service.
o The reception staff hours per weekend as planned to run the service.
o The number of reception evening shifts as planned payable each week.
o The medical charge levied by medical administration each week.
o The maximum possible number of tests that might be expected to be offered per week.
3. Briefly explain why the briefing information speaks about the staffing cost to the organisation rather than salary or wage. Why is the cost to the organisation higher than the hourly salary or wage paid to staff? (3 marks)
4. Identify and categorise the incomes and costs from the briefing document. (5 marks)
o Fixed
o Variable
5. Identify the contribution margin. (2 marks)
6. Calculate staffing costs (medical officers, nurses, manager and reception staff) for the 12-week program. (10 marks)
7. Identify the minimum number of nursing staff required. (5 marks)
o How many nurses would be required per week?
o What might be the value of employing/engaging part-time or casual nurses?
o If agency nurses were to be used instead, what effect would this have on costs? Why?
o What strategies could you use to manage surges in demand?
o What would be a reasonable sick leave rate?
8. Identify which type of prospective budget you plan to prepare and list the reasons why. (5 marks)
9. Construct a budget for the project. (5 marks)
10. Construct a cash flow projection. (5 marks)
11. Identify whether the program will operate at a surplus or a loss, and what financial issues the organisation should be alert to. (5 marks)
12. Identify how many tests overall must occur to break even. (2 marks)
13. On average, how many tests per week and per day and per nurse would this involve? (3 marks)
14. After one month, you discover that the demand after 5 pm is never more than 15 cases per hour. What efficiencies could you implement? (5 marks)
15. Draw conclusions and create recommendations for the chief executive and the board. (5 marks)
PART 2 – Questions/Tasks:
Required
1. Allocate your hospital’s support department costs to the patient services departments based on the cost drivers specified. (Calculate the allocation rate first for each support department, then prepare an allocation table for the allocations to patient service departments.) (15 marks)
2. Do you think the allocation method (cost drivers) used were appropriate? Explain why or why not. Can you suggest more appropriate allocation methods (cost driver) for the support department’s overhead cost allocations? Explain why your allocation method would be more appropriate. (5 marks)
3. Are all the patient services departments profitable (please show your calculations by preparing an income statement)? If not, should they be closed? Explain why or why not. (10 marks)
