Week 6: Assignment: Budget and Financial Indicators

Question 2 (a)
Foot care clinic indicator and benchmark
Indicator Benchmark
Annual Statistics:
Capacity (available appointments) 1,400
Patients (new and established) 150
Encounters 1,400
Urgent care referrals 40
Specialty appointments 65
Current visit rate 7
Readmission rate (30-day) 6%
Daily Statistics:
Average appointments per day 5
Average NP encounters per day 5
Wait Times:
Average wait time for clinic appointment (days) 5
Average office visit cycle time (hours) 1.5
Financials:
Average revenue per encounter $170
Average expense per encounter $120
Net profit or loss $50

Item 2021
Budget
Annual Statistics:
Capacity (available appointments) 650
Patients (new and established) 70
Encounters (billable visits) 650
Urgent care referrals 40
Specialty appointments per encounter 65
Current visit rate (average encounters per patient per year) 7
Readmission rate per patient 6%
Daily Statistics:
Average appointments per day 5
Average wound care nurse encounters per day 5
Wait Times:
Average wait time for clinic appointment (days) 5
Average office visit cycle time (hours) 1.5
Financials:
Total revenue $110,500
Average revenue per encounter $170
Total staffing expenses $78,000
Total non-personnel expenses $15,000
Total expenses $93,000
Average expense per encounter $120
Net profit or loss $(17,500)
Part 2 (a): 2021 Budget for foot care clinic

Part 1 (b). Discuss factors related to the proposed new clinic that may impact cost-savings for the hospital.
The introduction of budgeting and accounting in the Foot Care clinic aims to identify and control the clinic’s overall operational costs. The financial factors have a massive impact on the overall cost savings for the hospital. The clinic must consider this since the clinic has to operate independently and cover its expenses from the earnings generated without grants from the government. According to Waxman (2012), effective planning of operational costs is key in determining the contingency strategy of the origination as it facilitates timely payment to vendors and other partakers of the value creation process. By determining the operational cost of the Footcare clinic, it will serve to cut on the overall expenditure and improve the efficiency of the clinic. Data used to build the operating cost of the clinic forms the basis that is used in the budgeting of the hospital and to determine participation brought by departments towards the cost of the hospital. The operational cost covers all the expenditures used by the hospital in the provision of the services. The operating cost can either be direct or indirect cost. The direct cost includes the expenses used to acquire raw materials or to pay for direct expenses and direct labor (May et al., 2016).
Another factor that affects the cost savings of the Footcare clinic is the operational cost factor. When calculating the cost of the hospital, it is essential to consider other factors related to the client. Such factors include age, gender, socio-economic profile, race, and the client’s characteristics. In addition, it is essential to consider the duration of hospitalization since the reduction in the length of hospitalization serves to generally reduce the total cost of hospital operation and thus save on the cost. The operation cost of the hospital will be primarily determined by the size, which is dependent on the number of beds (Jandali & Sweis, 2019).

Part 1 (c). Discuss factors that may impact the financial performance of the proposed clinic