NOTE: You will be performing this assignment in Excel. See attached file to get you started. Let Excel do the work for you.

Each of the budget reports (2017 and 2018) are worth 65 points each. Points are awarded on the accuracy of the calculations and the appropriate use of the information provided.

You are the financial manager at Savalife Physician Group. It is budget time. You have to create the operating budget for the Board meeting in two weeks. You have the following information:

In 2017 you had the following breakdown of office visits.

Category		# of visits
New Patients
	Level 1	100
	Level 2	200
	Level 3	150
Established Patients
	Level 1	10440
	Level 2	1950
	Level 3	660
Initial Inpatient Consult
	20 minutes	900
	40 minutes	400
	55 minutes	200
Office Consult
	30 minutes (level 2)	2000
	40 minutes	1500
	60 minutes	1800

Savalife bases their operating income on the Price List of Rumford Hospital. See materials in Week 6 materials.

You are to create an operating budget for 2017 based on the following information (revenues and expenses). Use the Excel file provided to create the budget.

Information for 2017

Calculate the gross revenue that was generated by Savalife Physician Group in 2017.

Assume that 9% of the revenue was uncollected due to bad debt.

Calculate the net revenue for Savalife for 2017.

There are 4 physicians on staff.

Two make a salary of 198,000 per year

Two make a salary of 220,000 per year

There are 7 staff members

1 office manager makes a salary of 60,000 per year

4 RNs make a salary of 55,000 per year

3 clerical staff make a salary of 37,000 per year

Supplies are based on office visits only (new and established patients). The supply cost per visit is $23.50.

You pay professional dues for the nurses and the physicians.

Nurses: $180 per year

Physicians: $250 per year

Rent for the building and furniture is 15,600 per month

Utilities, phone and the internet cost 5000 per month

Payroll taxes are 20% of the total salaries.

Now that you know the activity for 2017, you must prepare a proposed budget (revenues and expenses) for 2018. Here are the assumptions for 2018.

Your number of visits and consults will remain the same

35% of your total revenue comes from Medicare

Because you met your value based goals, Medicare will increase your payment by 1% for Medicare patients.

You have improved your collections and therefore, your allowance for doubtful accounts has decreased to 7.5%

The physicians will receive a 5% raise

Your manager will receive a 2% raise

Your nurses will receive a 3% raise

Your Clerical staff will receive a 3.5% raise

Rent will increase to 16000 per month

Payroll taxes are still 20%, but are based on the new total salaries (based on the raises).

All other numbers remain the same.

Make sure to use the attached Excel file to enter in your formulas and results. Let Excel do the work for you.

here is Price List of Rumford Hospital

https://drive.google.com/file/d/0B9wJJ2CbytfARGpMaTJJVUxaRDA/view

excel format:
Information for 2017
Category		# of visits	Professional Fee	Facility Fee		Professional Fee Total	Facility Fee Total	Total
New Patients
	Level 1	100
	Level 2	200
	Level 3	150
Established Patients
	Level 1	10440
	Level 2	1950
	Level 3	660
Initial Inpatient Consult
	20 minutes	900
	40 minutes	400
	55 minutes	200
Office Consult
	30 minutes (level 2)	2000
	40 minutes	1500
	60 minutes	1800
2017 Actual Budget
REVENUE
New/Established Patient Revenue
Consult Revenue
	Total Revenue
Less 9% Allowance for Doubtful Accounts
	Net Revenue
EXPENSES
Physician Salaries
Staff Salaries
	Total Salaries
Supplies
Professional Dues
Rent
Utilities/Phone/Internet
Payroll Taxes
	Total Expenses
Excess of Revenues over Expenses
2018 Projected Budget
REVENUE
New/Established Patient Revenue
Consult Revenue
Medicare Adjustment
	Total Revenue
Less 7.5% Allowance for Doubtful Accounts
	Net Revenue
EXPENSES
Physician Salaries
Staff Salaries
	Total Salaries
Supplies
Professional Dues
Rent
Utilities/Phone/Internet
Payroll Taxes
	Total Expenses
Excess of Revenues over Expenses