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Metropolis Health System

Metropolis Health System. Expense Reduction Proposal Fiscal Year End March 31, 2011 Jamie Lofton Bellevue University. Outline. Title page Outline Abstract Introduction Objectives Budget Assumptions Variance example Reasons to maintain funding for certain departments

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Metropolis Health System

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  1. Metropolis Health System Expense Reduction Proposal Fiscal Year End March 31, 2011 Jamie Lofton Bellevue University

  2. Outline Title page Outline Abstract Introduction Objectives Budget Assumptions Variance example Reasons to maintain funding for certain departments Reasons to decrease funding for certain departments Schedule of Property, Plant, and Equipment Schedule of Revenue and Expense Schedule of Operating Expenses Summary References

  3. Abstract The purpose of this budget reduction proposal is to reduce the Operating Expense Budget by 15% without compromising quality patient care.

  4. Introduction Metropolis Health System is a cost centered medical facility where department managers are responsible for controlling costs. In the following targeted areas, General Services and General Support Services, managers have not controlled costs due to inefficient management of services. Both areas have seen wildly fluctuating variable costs beyond explanation. Budget cuts in these two areas would not effect patient care and would actually produce a more stable environment in each area of concern.

  5. Objectives To reduce General Services budget by 15%. To reduce General Support Services by 15%. To maintain Nursing Services and Other Professional Services budgets at their current levels.

  6. Budget Assumptions Metropolis Health System is a cost centered medical facility where department managers are responsible for controlling costs. Areas targeted for fiscal reduction have lower efficiency rates. Creation and implementation of job sharing part-time positions, elimination of two FTEs, and the subsequent reduced workload will result in minimal impact on effectiveness. Workload did not warrant the current level of staffing. The requested decrease in funding for land improvements is expected to be made up by increased tax rate (1%) in taxing district and rezoned property at a lower rate per acre.

  7. Variance Example (General Services) Overview of workload in General Services Area: Two-Variance Analysis 1# Actual Cost Incurred ($3,200,000) –*Budget Costs ($3,000,000) 2# Applied Cost ($3,050,000)-*Budget Costs ($3,000,000). *computed as standard hours for actual production Proof Total=Actual Cost Incurred-Applied Cost=Total Variance

  8. Reasons to Keep Nursing and Other Professional Services Funding Intact: Metropolis Health System is a thriving medical center that delivers excellent patient care in a patient-centered environment. Nurse Staffing is currently at the appropriate ratio of 5.2 patients per nurse-any further cuts would lead to poor patient care levels. Physical therapy is currently operating with 4 FTEs although 6 are needed-resulting in long waiting lists for initial evaluations. The incidence of substance abuse increased by 1% in Metropolis the previous year. Therefore, this department has the potential to generate more revenue.

  9. Reasons For Intact Funding-Continued- Outpatient visits have increased by 50,000 annually (Baker & Baker, 2011) since 1998. Inpatient visits have maintained the initial increase from 1998 of a steady growth of 1000 patients annually (Baker & Baker, 2011).

  10. Reasons to Decrease Funding to Assigned Areas Accountability task force has targeted specified areas for fiscal reduction. Targeted areas are functioning below JCAHO standards and risk losing accreditation. Studer Group Coaching Process Task Committee has recommended Nurse and Other Professional staffing remain at current levels. Surgical , Cardiac, and Laboratory were sited for performance excellence by Baldrige/NIST

  11. Schedule of Property, Plant, and Equipment w/Revisions*

  12. Metropolis Health System

  13. Summary MHS will continue to provide excellent patient care while striving to increase efficiency and eliminate duplicity and waste. The two targeted areas will be subject to reorganization with the budget committee’s approval.

  14. References Baker, J.J. & Baker, R.W. (2011). Health care finances : Basic for nonfinancial managers (3rd ed.). Sudbury, MA: Jones and Bartlett Publishers. Http://baldrige21.com Http://quality.nist.gov/ Http://www.jointcommision.org/standards

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