You are working in a mid-sized non-profit urban hospital as the supervisor responsible for a unit. You have supervised this unit for four years. For the first time the hospital’s chief financial officer has asked you to prepare your own formal budget for your area of responsibility. Up to this year, the Office of Fiscal Services has always prepared the budgets for each unit, with little opportunity for input from individual units. Propose a hypothetical scenario of your choice of a specific type of unit in the hospital. Include the number of beds and area of specialty.

When would you consider a flexible budget as most effective for your unit? When, or under what circumstances, do you think that a static or fixed budget will be more effective for your unit? The hospital? Is there a time for both? Please provide examples and your rationale for your choices.

What payer mix and revenue classifications would you expect to see for your unit? How so?

What capital expenditures would you need to consider in your unit’s budget?