Departmental Draft Budget Exercise Outpatient Family Medicine Clinic Past 12 Months' Actual Results Budget Proposal TOTAL TOTAL Patient Visits 3,840 Gross Charges $ 1,315,556 Contractual Allowances (723,556) Collection Percent 45 0 44 8 Net Patient Revenue 592,000 Other Revenue 84,112 Total Revenue 676,112 Clinical Expenses Clinical Physician Compensation 229,803 Clinical Staff Compensation 184,563 Non Clinical Staff 68,144 Coding Charge Entry Leased Staff 35,000 Fringe Benefits 77,627 Total Salaries Benefits 595,137 Operating Expenses Supplies 14,883 Rent 36,000 Malpractice 5,500 Purchased Services 584 Depreciation Expense 6,000 Other Expenses 11,665 Total Operating Expenses 74,632 Total Clinical Expenses 669,769 Net Clinical Income(Loss) 6,344 Revenue Assumptions Patient Visits will increase by 3 percent Gross Charges per Visit will Increase by 1 percent Collection Percentage will be 44 8 percent Other Revenue will increase by 5 percent Expense Assumptions Clinical Physician Compensation will grow at the same percentage as Total Revenue growth Clinical and Non Clinical Staff Team sizes will not change, but their compensation will receive an annual merit increase of 2 5 percent Coding Charge Entry costs will increase at the same percentage as gross charges growth Supplies, Purchased Services, Malpractice, and Other Expenses are all variable costs that fluctuate at the same percentage growth as Patient Visits Depreciation is straight line, and no assets were added or retired from prior year Your rental agreements have a 4 percent increase scheduled to begin at the start of this year Reflection Questions Summarize the overall financial performance of this clinic in the new year's budget, in comparison to the prior year's actual results Upon completion of your draft budget, is there any additional information, beyond the provided assumptions listed above, that you would try to gather to help you to build a stronger and more thoughtful budget If given full access to this clinic's financial history and market data, what additional analytics would you perform to validate that the provided assumptions are reasonable for the budget construction

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Departmental Draft Budget Exercise Outpatient Family Medicine Clinic Past 12 Months' Actual Results Budget Proposal TOTAL TOTAL Patient Visits 3,840 Gross Charges $ 1,315,556 -

Departmental Draft Budget Exercise
Outpatient Family Medicine Clinic


	Past 12 Months' Actual Results	Budget Proposal


	TOTAL	TOTAL
Patient Visits	3,840

Gross Charges	$ 1,315,556	-
Contractual Allowances	(723,556)	-
Collection Percent	45.0%	44.8%
Net Patient Revenue	592,000	-

Other Revenue	84,112	-

Total Revenue	676,112	-

Clinical Expenses:

Clinical Physician Compensation	229,803	-
Clinical Staff Compensation	184,563	-
Non-Clinical Staff	68,144	-
Coding/Charge Entry Leased Staff	35,000	-
Fringe Benefits	77,627	-

Total Salaries & Benefits	595,137	-

Operating Expenses:

Supplies	14,883	-
Rent	36,000	-
Malpractice	5,500	-
Purchased Services	584	-
Depreciation Expense	6,000	-
Other Expenses	11,665	-

Total Operating Expenses	74,632	-

Total Clinical Expenses	669,769	-

Net Clinical Income(Loss)	6,344	-


Revenue Assumptions: Patient Visits will increase by 3 percent Gross Charges per Visit will Increase by 1 percent Collection Percentage will be 44.8 percent Other Revenue will increase by 5 percent Expense Assumptions: Clinical Physician Compensation will grow at the same percentage as Total Revenue growth. Clinical and Non-Clinical Staff Team sizes will not change, but their compensation will receive an annual merit increase of 2.5 percent. Coding/Charge Entry costs will increase at the same percentage as gross charges growth. Supplies, Purchased Services, Malpractice, and Other Expenses are all variable costs that fluctuate at the same percentage growth as Patient Visits Depreciation is straight-line, and no assets were added or retired from prior year. Your rental agreements have a 4 percent increase scheduled to begin at the start of this year. Reflection Questions: Summarize the overall financial performance of this clinic in the new year's budget, in comparison to the prior year's actual results. Upon completion of your draft budget, is there any additional information, beyond the provided assumptions listed above, that you would try to gather to help you to build a stronger and more thoughtful budget? If given full access to this clinic's financial history and market data, what additional analytics would you perform to validate that the provided assumptions are reasonable for the budget construction?