Your group has been ‘hired’ as interns at Valley Medical Center. Instead of acting as a mere go-for for the duration of the time at VMC, the VP of Finance has decided that it would be a waste to not take advantage of the accounting knowledge that you have accumulated at Bellevue College. In addition, the project assigned would provide a taste of what real-life management accountants are called upon to do.

VMC is a local hospital that provides services to primarily the southern King County area of the State of Washington. If you want full details on what VMC is and what it does, you can find out more at www.valleymed.org (Links to an external site.). One of the largest services VMC provides is in Emergency Services or the ER as most people like to call it.

Located in the same directory of this document is an excel spreadsheet containing a host of data on the emergency department as well as support departments at VMC. In addition, you will also find the detail of the revenues and expenses of other departments at VMC. There should also be a tab that will help you cross-reference department numbers to department descriptions.

One item that you should notice is that the income statement of the emergency department shows gross patient revenues and then something called contractual adjustments. Gross patient revenues are essentially the number of times a service is performed multiplied times some price. The interesting thing about health care is despite the fact we charge a certain amount, we will not get that amount. All medical facilities enter into contracts with insurance carriers. For a particular type of service, an insurance company may only reimburse 80% of the price of the service provided. In other situations, some insurance companies may only reimburse a fixed amount for the service provided. As a result, the difference between what the medical facility charges and what is actually paid by insurance is considered to be a contractual allowance. The rest of the expenses are fairly self-explanatory. For the purposes of this project, you can ignore other operating revenues.

Another tab that might draw your attention is one called ED_Services_Provided_2011. You will find a summary of the services that were charged to patients. VMC charges patients based on a level. Each level has a set of criteria that would indicate how you would be charged. For the purposes of this project, you can assume that each level consumes a multiple of the resources of the lowest level. So, a Level 3 ED Charge will consume 3 times as many resources as Level 1 ED Charge, while a Level 4 ED Charge will consume 4 times as many resources as a Level 1 ED Charge.

Project:

Overall Goals:

1. Using the methods of allocating costs found in the text, determine the costs of each of the ED level charges provided.

What method was used in allocating costs? Why was this method used? What are the advantages of this approach? What are the disadvantages?

2. Determine whether the Emergency Department is profitable after allocating costs of support departments.

Is there one level charge that is more or less profitable than another? Who should determine what charges should be applied to a patient? What are the advantages/disadvantages on determining who should determine what emergency department charge level should be applied to a patient? Does it matter? Are there any ethical issues involved in this?

3. Is it good or bad that the Emergency Department is profitable or non-profitable. If your analysis determines that the ED is profitable, tell me why this good and why this may be bad. The same analysis if you determine that the ED is a non-profitable department.

Grading:

Grading will be based on the above goals in the project and how well they are answered AND defended. Half of this project grade (or a third if you count the team mate eval) will be a power point presentation done live by your group. This should encapsulate everything in your written portion (see below) and be no longer than 15 minutes. Everyone must speak... I would advise that you practice before doing your live presentation!

The other 'half' will need to be in an ESSAY format. This means a clear introduction transitioning into the various goals and ending with a conclusion. Your conclusion should parallel your introduction.

While there is a great deal of subjectivity on my part… I have been reading and writing project analysis for a number of years, so I do have some experience in this area. In addition, because you are turning it into turnitin.com, there will also be spelling and grammar checks as well as plagiarism checks…

With regards to plagiarism – read the guidelines as they are linked within my syllabus. If you use content that is not your own, you need to provide the appropriate citations. In the past, there have always been questions on asking for assistance outside of the group members. To this end, work on this project is restricted to group members. The only other individuals you may consult with are myself and other instructors. In regards to other instructors, they have students of their own and they will determine how much time they wish to chat with you about this project. There will be an open discussion thread where students may ask questions of me in an open forum about questions on data or even more data that may be needed. I will either answer these in an open forum or decline to answer. In any event, you still need to finish your project and may need to make assumptions. If you do, make sure you point them out in your work.

As for research on the Internet, again, you need to do your own original work. There may be methods and methodologies out there and if you use them, you need to give credit where credit is due. Do not copy items and take them as your own. You need to interpret and apply to the situation that is Valley Medical Center.

Up to a third of the grade will be dependent on evaluations of group members by every group member (the 50 point eval which is in separate category). These must be submitted to me in Canvas individually. You will rate yourself and each of your group members for 0 to 100 points. I will drop the lowest rating of each individual. If more than 2 zero ratings are issued by group members to one individual, that individual will receive a zero for the project. This is to prevent a few students from having to do all of the work.

Submissions:

Only 1 member per group will submit to Canvas. Be sure to include a page that identifies all of your group members. You need to self-select your groups under People and Final Group Project. You must have at least 2 members per group. Ideally, you will have at least 3 and no more than 4. This is a group project. You will NOT be allowed to turn in individual projects.