Checkpoint - When focusing on costs, it is favorable to be...

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    Looking only at revenue: Patient Revenue for '05 = 500 while budget = 550, this means that patient revenue is under budget. Since the focus is  on revenue and not costs, under budget is unfavorable, meaning that there was less actual revenue than expected  when the budget was created.   Net patient revenue is under budget by 49, unfavorable, less incoming revenue than planned with the budget.   Total Operating Revenue: under budget by 29, unfavorable, less incoming revenue than planned with the budget.   When focusing on revenue, it is favorable to be over budget, more actual revenue than planned with the budget.  Under budget, would indicate less revenue than budgeted which is unfavorable.
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Unformatted text preview: When focusing on costs, it is favorable to be under budget, less actual costs than originally budgeted. It is unfavorable to be over budget, more actual costs than budgeted. Some possibilities for the revenue shortage could be too much competition from other hospitals, more advertising from other hospitals, and poor level of care from this hospital. Another possibility is low prices. If the hospital does not expect to take action to increase revenue, then the plan for future years may need to be lowered if they expect diminished revenue streams going forward....
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