VOLUME AND REVENUE PROJECT - Research Paper Example

Financial Planning Estimations For The Year 0 Introductions From the financial analysis it couldbe noted that the hospital was loss making for the period of 2012 and 2013. The aim of this financial projection is to evaluate the cost structure and how to integrate the projected medical and financial trends to ensure profitability for the medical facility. This process would involve strategizing on the most appropriate volume and revenue to be generated for the firm to be profitable if not break even.

The targeted profit is set at $200,000Benchmarks/ key performance indicators   Accounts receivables                    Formula: less than 90days                    Benchmark: median 22.3%Bad debt expense                    Formula: as % of gross or net revenue                    Benchmark: less than 5%Average collection period or Days in patients accounts receivable                    Formula:                Net Accounts Receivable )/   Net patient service /365                    Benchmark: Median 47.

1daysSource: http://www.kareo.com/gettingpaid/2011/06/benchmarks-for-your-medical-practice-a-vital-part-of-critical-practice-analysis/ 2.0 Marginal costingUsing marginal costing differentiates the various elements of the costs of production. The costs are divided into fixed and variable costs. The marginal costs or the contribution is calculated by subtracting the variable costs from total revenues per unit.3.0 ProjectionsMedical spending with regards to private insurance spending is expected to grow in the year 2014 by an estimated 9.

4% (National Health Expenditure Projections 2010-2020). Spending by the government is also expected to grow in Medicare and Medicaid by 6.2 and 300 percent respectively (National Health Expenditure Projections 2010-2020). Based on this estimated for the hospital to be profitable it either has to increase the volume of patients and or increase the revenue received per procedure. conservative figure for the projected revenue of $ 15,694,583, this is by using increments in number of procedures and cost per procedure to reflect the change estimates.

The total expenses are estimated to be at $ 3,134,381 4.0 Notable areas of focusLooking at the expenses it could be noted that the physician contract services had a variance of -27.8% which affected the general result of the hospital. Other areas that should be focused on are the salaries and telephone costs. The hospital could consider employing more staff for its operations.5.0 Works CitedNational Health Expenditure Projections 2010-2020. 20 October 2013 http://www.cms.gov/Research- Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/downloads/proj2010.pdf>