2010 Operating Budget Projection

HCS/577
29 July 2013

2010 Operating Budget Projection Based upon a review of the Patton Fuller Community Hospital 2009 operating budget variances, the long and short term plans of the various hospital departments and an in depth analysis of general economic conditions, the following assumptions have been concluded and will be used in the preparation of the 2010 operating budget projections.

Patton Fuller Community Hospital should anticipate a 1% total “deflation rate” for prices in 2009; because of the weak economy, which is expected to continue into 2010. Net patient revenue will continue to increase, but at a decreased (3%) with little or no increase in patient volume, because of new managed care contracts. Other revenue is projected to increase by 15% based on marketing’s plan to increase donations by 15%. Expenses salaries and benefits salaries will hold to a 1% total increase in cost due to price “deflation” nation wide with no increase in labor hours. This assumption could be affected by a board decision either to raise nursing wages by 1$ per hour or to increase the nursing hour ratio. The increase in assets I the year 2009 was 7%, which is caused by an increase by an increase in accounts receivable by 56%, inventories by 100% and increase in property plant and equipment by 41%. The hospital may have provided more credit to customers or consumers to raise the revenues and more investment in fixed assets and inventories to successful, but not completely. The organization lacks in certain areas, as they were only able to raise their revenues by 10%. The increase I fixed assets and current assets have been financed by debt financing, which is evident from an increase in accounts payable and accrued expenses by 120% and net long term debt increased by 114% as compared to the previous year.