Utilize the following information:

Hospital Characteristics (see attached financials)

o Competitive environment, declining market share to competitors

o Moderate to substantial debt

o Facility and equipment that is fairly current, but will have future investments in capital

o Partial electronic medical record system

o Mediocre quality and patient satisfaction scores

o Few employed physicians/ no hospitalist program

o Split payor mix between public and private

o Overall not profitable from operations in most recent fiscal year

Local Physician Practices Characteristics

o Small primary care and specialty practices (mixture of solo and small groups)

o Independent ownership

o Loose affiliation with hospital

o Combination of office and hospital practice

Both Hospital and Physician organizations have contract-only relationships with payors and suppliers and are currently not working with either in any strategic way financially.

This is group is hired as a financial consultant to construct 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:

***This is the question i need help with -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)?

Assessing Hospital Performance Case 1 presents the opportunity to conduct an extensive financial statement and operating indicator analysis on a 210-bed not-for-profit hospital. The case includes statement of cash flows analyses, Du Pont analyses, ratio analyses, and economic value added analyses The INPUT DATA section of the model contains historical lfinancial and operating data. The OUTPUT DATA section contains all of the relevant analyses. Note that the model extends out to Column K. The student version of the model is essentially the same as this model (only one cell [C226] has been zeroed out). The key to student success in this case lies in interpretation of the data presented rather than number crunching. However, there is ample opportunity for students to extend the model to include percentage change analysis and common size analysis, as well as to create graphs (charts) as needed to present their findings Note that the industry data used in this case are for instructional use only, and do not represent actual industry data for the time period of the case. INPUT DATA Statements of Operations: (Millions of Dollars) 2003 $ 25.661 $27.236 $28.796 $ 30.576 $34.582 2001 2002 2004 2005 REVENUES Net patient service revenue Other revenue 1.305 1.261 1.237 1.853 1.834 otal revenues $26.966 $28.497 $30.033 $ 32.429 $ 36.416 Assessing Hospital Performance Case 1 presents the opportunity to conduct an extensive financial statement and operating indicator analysis on a 210-bed not-for-profit hospital. The case includes statement of cash flows analyses, Du Pont analyses, ratio analyses, and economic value added analyses The INPUT DATA section of the model contains historical lfinancial and operating data. The OUTPUT DATA section contains all of the relevant analyses. Note that the model extends out to Column K. The student version of the model is essentially the same as this model (only one cell [C226] has been zeroed out). The key to student success in this case lies in interpretation of the data presented rather than number crunching. However, there is ample opportunity for students to extend the model to include percentage change analysis and common size analysis, as well as to create graphs (charts) as needed to present their findings Note that the industry data used in this case are for instructional use only, and do not represent actual industry data for the time period of the case. INPUT DATA Statements of Operations: (Millions of Dollars) 2003 $ 25.661 $27.236 $28.796 $ 30.576 $34.582 2001 2002 2004 2005 REVENUES Net patient service revenue Other revenue 1.305 1.261 1.237 1.853 1.834 otal revenues $26.966 $28.497 $30.033 $ 32.429 $ 36.416