Writing Question

PART 1

Develop a 2-4 page review on the importance of the budgeting process to a health care organization, as well as demonstrate an understanding regarding the differences between an operational budget and a capital budget. Additionally, prepare an operational budget for the medical-surgical department at the St. Anthony Medical Center.

Expand All

Introduction

Note: This assessment uses Vila Health: Developing an Operating Budget media as the context for developing your budget. Please make sure you have reviewed this multimedia before you complete your assessment submission.

Financial management is something that touches us all. We are each responsible for our own personal and family budgets, and many of us are also responsible for budgets at work. Regardless of your experience with financial management, it is a critical skill to have, and it will be necessary to master this skill as you move forward in your health care administration career. Almost all health care administrators will be responsible for a budget at some point in their careers. Administrators must also know how to read basic financial statements and reports to assess the performance of their organization, other organizations, or their department.

Budgeting is an important consideration in strategic planning for any health care organization. The most basic definition of budget is a plan that identifies expected financial inputs and outputs. A budget should be closely aligned with a strategic plan, which is a strategy used by an organization to achieve its mission. Organizations may use different types of budgets, such as master budgets, statistics budgets, operating budgets, revenue budgets, expense budgets, and capital budgets (Reiter & Song, 2021). We will explore each at a high level.

For this assessment, you will be asked to consider the different types of budgets that are used in the health care field. By researching other organizations that use budgets, you will apply the course materials to a real-world situation. The assessment will further refine those skills as you navigate the St. Anthony Medical Center medical-surgical department budget (from the Vila Health multimedia). You will prepare a paper and a basic budget to demonstrate the knowledge that you acquired in this assessment.

Many learners enter the field with limited exposure to finances. Depending on your current knowledge and comfort level with the subject, it may be necessary to conduct additional research and spend extra time addressing some of the basics. In other words, the resources in this course will help to provide a foundation for you to complete the assessments, but it is possible that you will need to do your own research in the Capella University Library to fully address all scoring guide criteria.

Instructions

The assessment has two distinct parts:

Part 1: Medical-Surgical Department Operating Budget

Relevant scoring guide criteria:

• Provide this year’s correct revenue and expenses.
• Estimate the correct revenue, expenses, and net revenue/expenses for the next fiscal year.

For Part 1 of this assessment, use the information presented in the multimedia as context to create your operating budget. Using the data provided in the first three columns, develop an operating budget for the medical-surgical department at the St. Anthony Medical Center for the next fiscal year, as well as estimate the revenue and expenses for the remainder of the current fiscal year. (Assume that next year’s revenue will be unchanged from the current year’s revenue; however, the department will need to cut operating expenses by 5 percent for next fiscal year.)

You may download and use the Excel spreadsheet from the multimedia as your template for this part, or use the Excel spreadsheet .

Part 2: Types of Budgets and Their Importance

In the second part of the assessment, demonstrate your understanding of the importance of budgets within the context of financial and strategic planning for health care organizations. A comprehensive analysis of the budget consists of your interpretation of the numbers: What are the numbers telling you? Use the readings from your textbooks, and , as well as the independent research you conducted to fully develop a 24 page (excluding cover and references pages) response to the relevant scoring guide criteria:

• Explain why budgets are an important part of the planning process.
  • Explain means to make something (an idea, a situation, or a problem) clear to someone by describing it in more detail or revealing relevant facts or ideas.
• Explain the difference between operating, project, and capital budgets.
• Analyze the impact of the budget on the operations of the organization.
  • Analyze means to examine methodically and in detail the constitution or structure of something (especially information), typically for purposes of explanation and interpretation.
• Adhere to the rules of grammar, usage, and mechanics.
  • Grammar refers to the basic rules for how sentences are constructed and how words combine to make sentences (for example, word order, case, and tense).
  • Usage refers to correct word choice and phrasing, particularly with regard to the meanings of words and phrases.
  • Mechanics refers to correct use of capitalization, punctuation, and spelling.
• Apply APA formatting to in-text citations and references.
  • Be sure to include a separate References page.

You may use the template to complete this part of the assessment.

Additional Requirements

Your assessment should also meet the following requirements:

• Structure: Include a title page and reference page. You will submit two documents for your assessment:
  • Excel spreadsheet (Part 1: ).
  • Word document (Part 2: ).
• Length: Part 2 should be 24 double-spaced pages in length, excluding the title and reference pages.
• References: Cite at least four current scholarly or professional resources.
  • Your textbook can be one of the four resources.
• APA formatting: You may wish to refer to the following APA resources to help with your structure, formatting, and style:
  • .
  • .
• Font and font size: Times New Roman, 12 point, for narrative portions only.

PART 2

Develop a 4-6 page analysis of St. Anthony Medical Center’s finances over three fiscal years, which includes considerations such as assets, liabilities, revenues, and changes in financial position.

Expand All

Introduction

Note: This assessment uses Vila Health: Financial Statement Analysis media as the context for developing your analysis. Please make sure you have reviewed this multimedia before you complete your assessment submission.

Costs are evaluated very closely by all levels of health care administrators. Costs are broken down into different categories, such as direct costs versus indirect costs, and fixed costs versus variable costs (Nowicki, 2024). You will examine these types of costs and learn analytical methods such as break-even analyses and cost allocation methodologies. These methodologies explore the relationship between volume and cost and demonstrate why volume plays an important role in the planning process.

For this assessment, you will research how costs are allocated from overhead departments to revenue-generating departments. You will conduct independent research on cost allocation methodologies in addition to using the materials provided in the text. You will also consider the steps involved in preparing a cost-benefit analysis (CBA) when deciding to purchase a capital item such as an MRI machine.

The balance sheet, activity statement (also known as an income statement), and statement of cash flows are three of the most common types of financial statements that organizations prepare. You can think of balance sheets as a picture of the financial position of an organization at a given period in timefor example, as of December 31, 20xx. On the other hand, an activity statement or income statement will show the financial position of an organization over a longer period of timefor example, an entire month, quarter, or year (Reiter & Song, 2021).

You will explore these types of statements and apply your new knowledge to the health care administration field. You will analyze specific financial statements and think about the financial health of an organization based on the statements provided. You will have several opportunities to practice your analytical skills within this assessment by exploring the concept of ratio analysis. Ratio analysis is one more way that both internal and external stakeholders can increase understanding of the financial position of an organization. Ratio analysis compares financial statement data to provide another view that may then be benchmarked or compared to other organizations. Some common ratio types include liquidity ratios, profitability ratios, activity ratios and capital structure ratios (Nowicki, 2024).

Additionally, it is important to support your analysis with reference to relevant literature. While it is appropriate to use your textbook as part of that support, your paper should reference at least three outside articles in addition to the text.

Preparation

Instructions

This assessment has two main parts.

Analysis of the Balance Sheet

This part of the assessment focuses on analyzing the balance sheet for St. Anthony Medical Center. Relevant scoring guide criteria:

• Explain the financial position of St. Anthony Medical Center by comparing assets and liabilities shown in the .
  • Explain means to make something (an idea, a situation, or a problem) clear to someone by describing it in more detail or revealing relevant facts or ideas.
• Explain the financial position of St. Anthony Medical Center compared to previous years.
• Explain how accounts receivable changed from previous years.
• Analyze the financial obligations of St. Anthony Medical Center and their implications for the upcoming year.
  • Analyze means to examine methodically and in detail the constitution or structure of something (especially information), typically for purposes of explanation and interpretation.
• Adhere to the rules of grammar, usage, and mechanics.
  • Grammar refers to the basic rules for how sentences are constructed and how words combine to make sentences (for example, word order, case, and tense).
  • Usage refers to correct word choice and phrasing, particularly with regard to the meanings of words and phrases.
  • Mechanics refers to correct use of capitalization, punctuation, and spelling.
• Apply APA formatting to in-text citations and references.
  • Be sure to include a separate references page.

Some prompts to help guide you in your analysis are:

• Do assets exceed liabilities?
• What does this tell you about the financial position of St. Anthony Medical Center?
• How has the financial position of St. Anthony Medical Center changed since last year?
  • How has it changed since the year prior?
• How have the accounts receivable changed from previous years, and what does this tell you?
• Using the balance sheet, what financial obligations does St. Anthony Medical Center need to consider in the upcoming year?

The goal of this analysis is to create an accurate picture of the financial trends for St. Anthony Medical Center, its current financial obligations, and how the upcoming fiscal year projects in light of this information.

Analysis of the Income Statement

This part of the assessment focuses on analyzing the income statement for St. Anthony Medical Center. Relevant scoring guide criteria:

• Analyze patient revenue compared to previous years and the implications for the financial health of St. Anthony Medical Center.
• Adhere to the rules of grammar, usage, and mechanics.
• Apply APA formatting to in-text citations and references.

Some prompts to help guide you in your analysis are:

• Has patient revenue increased or decreased from previous years?
  • What could this indicate about the financial position of St. Anthony Medical Center?

The goal of this analysis is to create an accurate picture of trends tied to the overall financial health of St. Anthony Medical Center.

Additional Requirements

Your assessment should also meet the following requirements:

• Structure: Include a cover page and reference page when submitting your assessment. You are encouraged to use the template for this assessment.
• Length: 46 double-spaced pages, excluding title page and reference page.
• References: Cite at least four current scholarly or professional resources.
  • Your textbook can be one of the four resources.
• Format: Use current APA style for references and citations.
  • You may wish to refer to the following APA resources to help with your structure, formatting, and style:
    • .
• Font and font size: Times New Roman, 12 point.

WRITE MY PAPER