You are the CFO of Loyola Hospital. It is a 250 bed, for-profit hospital, renowned for its cardiology unit. The hospital has 300 employees, including 125 physicians and staff privileges. Loyola is located in a thriving community that represents its primary service region. There are many high-tech companies and industries in the area that attract families and retirees from around the United States. The area has a mild climate and offers an excellent educational environment that includes multiple community colleges and universities. There are approximately 750,000 residents in the surrounding city, and its population is growing about 4% per year. Approximately 46% of the population is under 18 years of age, 42% is between the ages of 18 and 64, and 12% is over 65 years of age; 49% of the residents are female and 51% are male. Loyola has one competitor, Rush Hospital, which is located 40 miles away. Rush is a 350 bed non-for- profit hospital with an excellent reputation. It has strong orthopedic and cardiac services and also offers oncology services, which are poorly organized and not accredited. Rush Hospitals financial performance is stable, and its market share is growing. Rush has no formal orthopedic or cardiology departments, though several popular orthopedic surgeons and cardiologists maintain privileges there. The communitys premiere orthopedic group practices are located near Rush Hospital, making it inconvenient for surgeons to use Loyola Hospital for surgery except in rare cases. However, a few orthopedic practices are planning to open branch offices near the Loyola facility. Cardiologists on Rushs staff restrict their activity to performing consults for Loyola physicians whose patients have been admitted to the facility. Although Loyola Hospital has had moderate success in the burgeoning community, its leaders would like to ensure adequate preparation for the future, especially in the environment of health reform. You will assess key areas in Loyolas operations from a financial perspective and report your results to the Board of Directors. Please address the following questions in your presentation.

Explain the budgeting process and discus the purpose of and relationships among the operating, cash, and capital budgets.