The Budget Analysis Assignment Discussion

The Budget Analysis Assignment Discussion

Question 1

The decisions made for the Millway University Nurse Managed Clinic (MNC) are due to the projections made for the year 2017 based on the four encounters per day per nurse practitioner for the year 2015 and six encounters per day per nurse practitioner for the years 2016 and 2017. Since the management workload has been lifted off the shoulders of the nurse practitioners by hiring additional administrative support team, the nurse practitioners can focus on patient care which potentially increases the number of patient encounters in a day. This is a good strategy to ensure more profits are gained by the clinic and more services are provided to the patients by the nurse practitioners. The Budget Analysis Assignment Discussion

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The change on the immunizations contract from 500 to 300 in 2017 is also a good option because the clinic may have immunized more school age children in 2015 and 2016 and therefore, focusing on immunizing preschool children provides is more realistic. I therefore agree with the changes above because it they will enable the hospital to offer more realistic and sustainable care to patients while at the same time increasing profits to the clinic.

Question 2

If the MNC nurses get an increase in their salaries by 5%, then the change to personal expenses will be:

105 x 216,300   = $227,115

100

The total expenses will be $227,115 + $64,890 + $30,900 + $41,200

=$333,205

This change will reduce the clinic’s expected profits.

Question 3

One internal factor that can affect the budget of MNC is an event when the clinic decides to hire a new nurse practitioner. This may require additional funds to pay the nurse but at the same time, the number of patient contact will be increased. This may affect the budget positively resulting into a positive variance.

An external event that may affect the budget is the outbreak of a pandemic that may result into school closure. This may reduce the number of children being immunized resulting into a negative budget variance for the clinic. The Budget Analysis Assignment Discussion

Reference

Chen, J. (2020). Budget Variance. Retrieved 11th July, 2022 from https://www.investopedia.com/terms/b/budget-variance.asp#:~:text=A%20budget%20variance%20is%20an,come%20in%20higher%20than%20anticipated.

Zach (2021). What is residual variance? (Definition & Example). Retrieved 11th July, 2022 from https://www.statology.org/residual-variance/

NURS510

Budget Analysis

Millway University Nurse-Managed Clinic (MNC)

The budget below is an example of a statistics based budget used for planning and projection of the UOS (units of service) that represents utilization of health services in a nurse-managed clinic.  A statistics budget is prepared prior to developing an operating budget because health care revenue and expenses are most often based on volume (this is true in acute care settings as well).  The volume statistics are also linked to the settings capacity or the maximum UOS that can be managed by the available staff.  Since health care environments are so variable, performance targets are most often set below capacity. The Budget Analysis Assignment Discussion

The budget below represents past budget performance for 2015 and 2016, and the projected budget for 2017.

Background and projections:

-the  NP capacity is based on performance targets for 4 encounters/day/NP for 2015 and 6 encounters/day/NP for 2016 and 2017.  This increase in capacity is due to the addition of administrative support which frees up the NPs to focus on patient care.

-the encounter per day are multiplied by the 224 days each NP is budgeted to work

-actual performance  is reported as actual encounters per day and the total encounters from ACO contracts and self pay encounters

-the performance target is for the NPs to work 95% of capacity, which is the level that the NPs function most efficiently.

-the 2017  budget projects 3,830 patient encounters, or 95% of the 4,032 capacity.

-the nurse managers and NPs decided to maintain the ACO contract fro disease management and wellness care. The Budget Analysis Assignment Discussion

-a contract for immunizations with Bigtown school district  decreases immunizations from 500 to 300 in 2017.  The NPs will focus on immunizing preschool children entering the school system rather than on school age children

-an increase in self-pay encounters is projected for 2017

 

Analysis questions:

 

  1. Based on the projections above provide your analysis of why these decisions might have been made for this clinic. Do you agree or disagree with the changes?  Why?
  2. Assume that the nurses working in the MNC have a 5% salary increase for the following budget year. Calculate the change to personnel expenses and the impact on total expenses and the impact on MNC profits.
  3. Discuss at least one (1) internal and one (1) external change or event that might affect the MNC budget in the next year.

(eg: maternity leave for one of the NPs,  a pandemic that closes                                schools,  ??????)The Budget Analysis Assignment Discussion

from Penner, S. (2017). Economics and Financial Management for Nurses and Nurse Leaders (3rd ed).  New York:  Springer Publishing Company The Budget Analysis Assignment Discussion