accounting for health care environment

posted by .

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 one physician, on average, will examine 4 patients per hour for 7.5 hours each day. Also assume that the office is open for patient visits 20 days per month. 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 $3.00 $6,000

Planned purchases of medical supplies are $16,000 per month. Supplies are paid in the month following purchase. Service bureau expenses are paid in the month following service. All other expenses are paid in the month of incurrence.

During year 2015, your clinic plans to purchase $80,000 worth of equipment, which will depreciate on the straight-line basis over 5 years. A $75,000 line of credit has been arranged at the bank if needed. Assume a desired minimum cash balance of $10,000. You may assume that interest on any amounts borrowed is already considered in other operating expenses.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Healthcare Technology

    Analyze disaster vulnerabilities in health care and human service organization. Write a vulnerability assessment report for an urban medical clinic serving low-income clientele as if you were a consultant. The clinic is located in …
  2. accounting

    GRANT CLINIC, INC. Financial Plan and Presentation Grant Clinic, Inc. serves a suburban community with a population of about 24,000, of which 25% are expected to become patients of the clinic. Approximately 6 miles from Grant Clinic, …
  3. Healthcare Finance

    You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 …
  4. Healthcare Finances

    You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follow: Revenues (10,000 visit) $400,000 Wages and benefits $220,000 Rent $5,000 Depreciation $30,000 Utilities $2,500 …
  5. Statistics

    community physicians clinic is a large clinic with 85 physicians. they treat about 8,600 patients each week. coders are expected to code 100 clinic records each day. how many Full Time Employees are needed to code these records?
  6. Healthcare Finance

    you are considering starting a walk in clinic. Your financial projections are as follows: revenues $400,000, wages and benefits 220000, rent $5,000., depreciation $30,000., utilities $2,500., medical supplies $50,000. and administrative …
  7. Healthcare Finance

    You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 …
  8. Healthcare finance

    You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 …
  9. Healthcare finance

    You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 …
  10. Math

    Pearland Medical Center owns a small satellite clinic, specializing in General Practice, located at nearby Pearland airport. General Practice Clinic’s sole payor is Air Health, a health care plan that covers the airport employee …

More Similar Questions