Cost Management I.P 2 - Essay Example

Cost Management Ans While cutting the costs the clinic has to make sure that; i. It keeps working ii. Staff does not feel unduly offended so as to affect the working environment. The budgeting exercise can be carried out as follows;Administration Salaries: - Administrator - Assistant - Two Secretaries Supplies Advertising and promotion Professional meetings/dues Purchased Services: - Accounting and billing - Custodial - Security - Consulting Community Mental Health Services - Salaries (two social workers) - Transportation Outpatient mental health treatment Salaries: - Psychiatrist - Two Social Workers Original Budget$60,000$35,000$42,000 $35,000$9,000 $14,000$15,000$13,000$12,000$10,000$46,000$10,000$86,000$70,000 Revised Budget$50,000$30,000$20,000$32,000$2,000$5,000$12,000$12,000$12,000$9,000$45,000$10,000$86,000$34,000Explanation regarding such decision follows below in(Ans-2).

Total$457,000$359,000Ans. 2:Dr. Stephanie White should lead the way with a reduction in her perks.Assistant must also share his/ her part of the responsibility.In this IT age when PCs are replacing Secretaries, the clinic in dire need of austerity measures can also do with only one secretary (he can be given some extra bonus) more secretarial work can be given to the assistant of Dr. White.Advertising and promotional campaigns should be bare minimum. In fact reducing these costs should be top on the priority.

Professional meets generally end up in lavish luncheons or late night parties. Such meetings can be curtailed till budgetary position improves. This should be second priority. Reducing salaries should be the last option.The Psychiatrist is an outsider and he has to be a professional one, so it would be difficult to curtail his fees.We already have the services of two social workers under the head 'Community Mental Health Services'. Therefore we can work with one social worker in 'Outpatient mental health treatment'.

The burden can be equally shared between these three. (some more bonus can be distributed amongst these three for putting in extra efforts).Ans. 3: Dr. Stephanie White is running a community mental health agency, so in this noble mission he has to take care of couple of things;i. This being a noble task she has to take care of his clients with missionary zeal.ii. While pursuing this task she has to make sure that financial constraints of the clinic are not passed on to the clients, as it will make matters more complicated for Uptown Clinic.iii. She has to arrange the facilities in such a manner that the cost cutting exercise does not affect the routine check-ups.

Dr Stephanie should not be seen as shooing away the patients citing lesser funds.iv. The bitter truth is finances are reduced from next year and the clinic has to provide similar services (if not better) with the reduced budgets.v. In the meantime she should try to quickly analyze the reasons for reduced budget and should emphasize the vitality of working finances to such organizations like Uptown Clinic.