Preparing+the+Budget - 1. Preparing the Budget Assume you...

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1. Preparing the Budget Assume you are the financial director of a clinic that is a part of an organization named Getwell Clinics Incorporated. Your clinic—named after you—serves a suburban community with a population of about 24,000, of which 25% are expected to become patients of the clinic. Each patient is expected to average five visits per year. Assume that visits occur evenly throughout the year. The average physician’s salary is $11,000 per month. The current practice is fee-for-service and includes Medicare and nonMedicare patients. The clinic has been approached by several HMOs to provide services to their enrollees, but the board of directors has decided to defer participation until year 2015. After adjustments and allowances, average charges are $50 per visit. You believe that patient receivables are too high. You expect to improve collections, resulting in a balance of $220,000 patient receivables at the end of the year. The flexible budget for operating costs for the clinic is as follows: Operating Costs Variable Expenses per Visit Fixed Expenses per Month Nurses’ salaries 0 $18,000 Administrative and technical salaries 0 $19,000 Medical supplies $6.00 0 Rent 0 $4,000 Service bureau for medical and financial records $1.00 $2,000 Other operating expenses
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This note was uploaded on 12/25/2010 for the course DEPTT. 2339485 taught by Professor J.khowel during the Spring '10 term at

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Preparing+the+Budget - 1. Preparing the Budget Assume you...

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