I have attached filesd connected with the assignment. The file group assignment 6 explains the assignment. if all 6 topic are listed I only need # 2 & 4 answered.

Group Assignment 6.3: Consultant Report Group Project The Consultant Report provides an opportunity for the student (working in groups) to synthesize the topics learned in this course into a project. This project provides the group with a hypothetical organization with some financial, operational, and strategic assumptions and asks the group to prepare a report to the Organization's Senior Management and Board of Directors with an assessment as to how the Organization is currently performing and what recommendations are important to implement in order for the Organization to succeed in the future. This is a small group assignment (Group Assignment 6.3 Group X). Before beginning this assignment, please listen to the podcast below, provided by Dr. Budd. Click the link below to listen to the podcast. To download the podcast, rightclick on the link, click Save Link As..., and save it to your computer. Transcript of Creekside Community Case Podcast For this assignment, you will need to refer to the following set of financial data: Creekside Community Hospital Data Utilize the following information: Hospital Characteristics (see attached financials) Competitive environment, declining market share to competitors Moderate to substantial debt Facility and equipment that is fairly current, but will have future investments in capital Partial electronic medical record system Mediocre quality and patient satisfaction scores Few employed physicians/ no hospitalist program Split payor mix between public and private Overall not profitable from operations in most recent fiscal year o Local Physician Practices Characteristics o Small primary care and specialty practices (mixture of solo and small groups) Independent ownership Loose affiliation with hospital Combination of office and hospital practice Both Hospital and Physician organizations have contractonly relationships with payors and suppliers and are currently not working with either in any strategic way financially. Your group is hired as a financial consultant to prepare a financial strategy (or strategies) to the hospital as they transition from the current environment to the future environment that will be impacted by health care reform due to governmental intervention, as well as changes from within the industry itself. Specifically, your strategy should consider more than one alternative (outcome). When formulating your response, consider addressing the following topics at a minimum (feel free to add other financial topics as well). This Consultant's Report should include about one page for each topic: 1. Address how a strong operating and capital budget process would assist achieving future financial goals (what tools might you employ?). Explain why accurate cost allocation is important. What would be the priorities for capital budgets (in general, not specifically)? (Refer to your Week Four Learning Materials.) 2. Address how changes in patient quality and satisfaction could impact future reimbursement and operating performance. Also address ownership structures that both the hospital and physicians' organizations should consider going forward (maintain independent or consider joint venture, merger, etc) and why. (Refer to your Week Six Lesson Two and Week Seven Lesson Two readings. )All sources, including course materials, must be cited in text in APA style. Remember that course materials need not be included in your references page, but all other references must be. Transcript of Creekside Community Case Podcast For this assignment, you will need to refer to the following set of financial data: Creekside Community Hospital Data Utilize the following information: Hospital Characteristics (see attached financials) Competitive environment, declining market share to competitors Moderate to substantial debt Facility and equipment that is fairly current, but will have future investments in capital Partial electronic medical record system Mediocre quality and patient satisfaction scores Few employed physicians/ no hospitalist program Split payor mix between public and private Overall not profitable from operations in most recent fiscal year o Local Physician Practices Characteristics o Small primary care and specialty practices (mixture of solo and small groups) Independent ownership Loose affiliation with hospital Combination of office and hospital practice Both Hospital and Physician organizations have contractonly relationships with payors and suppliers and are currently not working with either in any strategic way financially. Your group is hired as a financial consultant to prepare a financial strategy (or strategies) to the hospital as they transition from the current environment to the future environment that will be impacted by health care reform due to governmental intervention, as well as changes from within the industry itself. 1. Address how a strong operating and capital budget process would assist achieving future financial goals (what tools might you employ?). Explain why accurate cost allocation is important. What would be the priorities for capital budgets (in general, not specifically)? (Refer to your Week Four Learning Materials.) 2. Address how changes in patient quality and satisfaction could impact future reimbursement and operating performance. Also address ownership structures that both the hospital and physicians' organizations should consider going forward (maintain independent or consider joint venture, merger, etc) and why. (Refer to your Week Six Lesson Two and Week Seven Lesson Two readings.) All sources, including course materials, must be cited in text in APA style. Remember that course materials need not be included in your references page, but all other references must be. Operating Budgets Click Begin to view the presentation below. Alternate Version of Operating Budgets Multimedia Variance Analysis With a good foundation of costs, we can use this information to perform variance analysis and utilize the budget as a tool to improve operating performance. There are three main components to variance analysis: the revenue variance, the cost variance, and the profit variance. Revenue Variance Let's begin with the revenue variance. The revenue variance is equal to actual revenues minus static or budgeted revenues. This variance consists of a volume component as well as a price component. The volume component (variance) equals the flexible revenue (revenue adjusted) for volume changes minus static or budgeted revenues. The price component (variance) equals the actual revenue minus flexible revenue. Subtracting the common factor in each (flexible revenue) will yield the revenue variance or actual revenues minus static or budgeted revenue. Alternate Version of Variance Equations Diagram Cost Variance The cost variations also have two components: the volume variance and the management variance. The volume variance equals the static or budgeted costs minus the flexible costs, which are costs adjusted for volume changes. The management variance equals those flexible costs minus the actual costs. Subtracting the common factor (flexible costs) in each will yield the cost variance which is static costs minus actual cost. The management variance may represent the most important variance, as management has the most ability to control this variance. Since volume is not a factor, the difference between flexible costs and actual costs represents the impact that management is having on cost behavior. For example, a positive management variance related to salaries indicates that holding volume is constant, and salaries are less than amount budgeted, which would indicate an improvement in productivity. Likewise, a positive management variance related to the supplies expense would indicate that cost savings have been achieved in the purchase of supplies. This supply expense reduction could be due to a renegotiation of payment rates or a more efficient use of supplies in the provision of the healthcare service or product. On the other hand, a negative management variance would indicate reduced productivity of staff resulting in increased salary expense. Decreased efficiency in the utilization of supplies or price increases would result in a negative management variance related to supply expense. Therefore, the management variance for each service line or department should be monitored closely to determine the impact that management is having (positive or negative) on cost behavior. The management variance then serves as a good measure of accountability for managers' performance. It also represents an opportunity for improvement for the organization and may indicate changes that need to be made in operations in order to improve efficiency and better manage costs. Alternate Version of Cost Variance Diagram Profit Variance A combination of revenue variance and the cost variance will yield a profit variance. Specifically, profit variance will equal the difference between the revenue variance (actual revenue minus static revenue as seen above) minus the cost variance (static costs minus actual costs as seen above) or, put another way, will equal actual profits minus static or budgeted profits. Therefore, the components of the revenue and cost variances are critical to determining what has contributed to changes in profit variances and profitability overall. Alternate Version of Profit Variance Diagram The healthcare organization can then analyze the changes in these components and determine what needs to be done to improve operations and profitability going forward. It is fair to say that healthcare organizations that closely monitor these variances and make appropriate changes in processes or operations in order to improve revenue or cost variances will likely yield positive operating results and uncover new opportunities to improve operational performance. These improvements may generate increased revenue or may improve cost efficiencies or hopefully both. The calculation and monitoring of these variances for each service or product line within a healthcare organization, as well as the implementation of operational changes, represents a strong internal consulting tool available to all managers and senior managers of a healthcare organization that can lead to both operational and financial improvements and overall success. Variance Analysis Self Check Click the link below to participate in the activity. Variance Analysis Self Check Alternate Version of Variance Analysis Self Check Activity Click Begin to participate in the activity below. Alternate Version of Variance Influence Multimedia Sample Problem 8.2 Click Play to view the presentation below. The sample problem provides an example of how to calculate the revenue, volume, and price variances for a hypothetical organization. This example will assist in the completion of the Chapter 8 problems assigned for this week. Alternate Version of Sample Problem 8.2 Multimedia Lesson Two Learning Materials Textbook Reading Read the following in your Gapenski text: 1. Chapter 14: The Basics of Capital Budgeting Due to the significant financial investment involved in the capital budgeting process, an accurate and thorough financial analysis is important to ensure resources are spent on the best projects available. Often, the management and staff involved in the area(s) impacted by the budget offer significant insight and information that is invaluable in ensuring the success of the selected projects. Capital Budget Process There are two steps in the capital budget process: 1. Select project(s) 2. Determine project financing Opportunity Costs An important concept of capital budgeting is known as opportunity cost. This represents the idea that the organization has multiple options for use of its financial resources at any point in time. It can invest these resources in one or more projects selected by the organization or it can choose to not pursue projects and maintain the funds in an investment portfolio for future opportunities. The "opportunity cost\" is then the cost of the next best alternative(s) for the financial resources other than the option selected. For example, let's say an organization has the opportunity to invest in a project that will expand the capacity of its emergency room by adding more space and beds. The goal is to increase the volume in the emergency room which will lead to increased ER visits and perhaps increased ancillary services (laboratory, radiology, etc.) On the other hand, the organization could choose not to pursue the opportunity and save the resources for another project in the future. This assumes that the organization has a choice and is not required to, or does not feel compelled to, pursue the ER expansion as a result of the needs of the community. In this scenario, a financial analysis is required to determine if the project should be pursued or not based on the opportunity costs of the next best alternativein this case, keeping the funds invested in the organization's investment portfolio. Alternate Version of Opportunity Cost Diagram Risk Analysis and Capital Budgeting Due to the presence of opportunity costs, every capital budget proposalwhether it be a purchase of equipment, addition of a new service, or expansion of an existing servicecarries with it certain risk. There is risk that the project itself will not meet the expectations set for it by management and will fail. There is also the risk that the project will negatively impact other aspects of an organization's operations in ways that were not intended. Either way, the risk that the project will not produce the intended results heightens the opportunity risk inherent in the project itself. It is for this reason that the organization will need to spend as much time as necessary prior to the project implementation ensuring that as many possible outcomes (negative and positive) are considered and also try to build in various scenarios to illustrate the potential risk of the project. These scenarios can be weighted with probabilities, if necessary, to try to determine the likelihood of the various outcomes (sensitivity analysis). Three scenarios that plot most likely, worst case, and bestcase scenario may be sufficient to identify the potential risks involved in the project and prepare senior management and the board of directors for possible variances from the anticipated outcome. This type of scenario analysis may help in the overall decisionmaking process, especially if more than one project is being considered. It may also prove useful at a later date after a project is selected. This type of analysis and supporting documentation will hopefully justify why the decision was made to pursue the particular project based on the information known at that time. The table below shows a hypothetical scenario analysis. Most likely Probabil ity scenario Worst case Probabil ity scenario Bestcase Probabili ty scenario Option A 1 million 50% ($500,000) 30% $2 million 20% Option B $750,000 33% ($1 million) 33% $1.5 million 33% Click Begin to participate in the activity below. Alternate Version of Risk Analysis Multimedia Pro Forma Analysis In order to begin performing a financial analysis of a potential capital budget, a pro forma or "as if" statement of operations for the project is required. In essence, this entails creating an estimated operating budget for the project based on certain financial assumptions. In the case of the ER example, the gross and net revenue increase would need to be projected for the additional beds placed into service. This gross revenue would be estimated based upon the increase in volume (in this case, ER visits) multiplied by the average price charged for the visits. The gross revenue estimate would then be adjusted for contractual adjustments, bad debt, and charity (all estimated) to arrive at incremental estimated net revenue generated by the ER expansion (normally on an annual basis). The project term or lifespan will also need to be estimated. For equipment, the term is normally the estimated useful life of the equipment. In the case of a project like the ER, it would be the term set by management based on the best estimate, or, if another project exists, the term of that project for comparative purposes. For this example, let's assume it is five years. The net revenue will then need to be estimated for a fiveyear period. In addition to revenues, the ongoing operating expenses related to the project must be estimated for the term of the project. These would include additional salaries, supplies, purchased services, and other cash costs associated with the operation of the expanded services. These expenses would be estimated on an annual basis to match the net revenue generated. The result is the creation of an estimated annual operating statement for each year of the project with a resulting income or loss for each period. The final step is to calculate the total initial or upfront expenses required for the project: In this case, all the costs necessary to build and equip the newly expanded emergency room beds and capacity. Alternate Version of Pro Forma Analysis Diagram Capital Project Assessment Methods After the net revenues, expenses, and initial investment have been calculated, the information can be assessed to determine if the capital project should be pursued using three methodologies: Payback Period Internal Rate of Return (IRR) Net Present Value (NPV) All three require an accumulation of all future revenues and costs that were previously forecasted. Payback Period and IRR These two methodologies are fairly simple to use and give a general idea as to whether the particular capital project merits consideration. Payback assesses the projects utilizing future dollar amounts rather than the discounted value of future dollar amounts like the IRR and NPV methods. The payback method takes the initial investment amount of the project and divides it by the AVERAGE net profit (net revenues - expenses) or average operating income of the project. Payback Period = Initial Cost / Average Annual Profit If the project cost $1 million upfront, and generated an AVERAGE operating income of $100,000 (undiscounted), the payback period would be 10 years. In other words, it would take the organization 10 years to recover its initial investment before an overall net profit could then be realized. Now, try this one! Click Begin to participate in the activity below. Alternate Version of Payback Multimedia The IRR is a discounted cash flow calculation that compares the present value of a project's projected cash inflows to the present value of a project's projected cash outflows and measures project profitability in the form of a percentage (Gapenski, p. 512). The MIRR, or Modified Internal Rate of Return, represents an enhanced version of the IRR, which calculates the discount rate that forces the present value of the inflow terminal value to equal the present value of costs (Gapenski, p. 514). Net Present Value The Net Present Value (NPV) method utilizes the same input information as the two methods discussed previously; however, there is one important difference. Rather than calculating a project's profitability in the form of a percentage like IRR, the NPV method measures profitability in the form of dollars and is normally the preferred method of assessment for a capital project. In our previous example, the $100,000 net operating amount each year is discounted back to today's dollar using an interest rate compounded by the number of periods (years) away from today. Thus, the $100,000 generated five years from now is discounted back by an interest rate, compounded for five years. This interest rate or "hurdle rate" represents the rate of the next best alternative (in this case, that is the estimated interest rate expected to be earned by investing the money in the organization's investment portfolio). After each year's net operating income is discounted back to today's dollar, the sum of each of all these amounts is compared to the initial investment and the following occurs: Sum of each year's operating income - initial investment = NPV The following decisions on the project are then: If NPV > 0, the project should be undertaken as it exceeds the next best alternative or opportunity costs. If NPV