Staffing Budgets/FTEs/Variance Analysis
Staffing Budgets/FTEs/Variance Analysis Assignment V4
PURPOSE
This assignment provideslearners with the opportunity to apply budgeting knowledge and skills by calculating full-time equivalents for a nursing unit, projecting FTE needs related to census changes, and analyzing a variance scenario.
DUE DATE:Sunday 11:59 p.m. MT at the end of Week 4
TOTAL POINTS POSSIBLE: 150
REQUIREMENTS
Description of the Assignment
This assignment is in two scenario-based sections each related to staffing budgets. In the first, the student will perform multistep calculations of FTEs and projection of future FTE needs for a selected nursing unit. The second section involves calculation of budget variance and its analysis. Each section requires supported written interpretation of findings.
Criteria for Content
Answer the questions and complete the calculations required for the two sections of the assignment.
Key points related to Calculations:
1. When performing calculations, standard rounding rules apply. If the number to the right of the decimal is less than 5, round down to the nearest whole number, e.g., 33.4 = 33 If the number to the right of the decimal is 5 or greater, round up to the nearest whole number, e.g. 33.5 =34.
2. Read the question carefully. Pay close attention to the units be asked and keep them consistent. For example, hours vs FTEs; days vs months vs years.
3. Provide ALL formulas with references. Designate which formula associates with which source. It is not sufficient to simply list the source at the beginning of the section. Write out the formula used BEFORE filling in the numbers.
Example: Efficiency Variance + Volume Variance + Cost Variance = Total Variance
Rundio, A. (2016). The nurse manager’s guide to budgeting and finance. 2nd. Ed., Indianapolis, IN: Sigma Theta Tau International.
• Section One: Staffing Budget and FTEs
o Calculations of full-time equivalents (FTEs)
o Project FTE needs related to census changes
• Section Two: Variance Analysis
o Calculating variance
o Variance analysis with explanation
Download the Assignment Word Document and submit your answers directly onto the form. When completed, upload into the assignment portal in your course. For the questions requiring a written response, please adhere to proper grammar and syntax, and provide references. For the questions requiring calculations, show all your work including the formula used. Include the references for formula chosen.
PREPARING THE ASSIGNMENT
Section One—Staffing Budget and FTEs
Personnel Budget Case Study
Sandra Chambers has recently accepted the position of assistant administrator for the department of nursing at Potter Regional Medical Center where she will oversee the operations of five medical units. As she evaluates the budgets for the different cost centers, she finds that all are being used at near or full capacity. The activity in four of the five has remained steady over the past 2 years. A fifth unit has realized a steady increase in patient volume during that time and is currently at 88% capacity. It has been projected that within the next 12 months the volume of patients moving through that unit will increase by 20%. Sandra needs to determine if the current FTEs for the unit will be sufficient to ensure quality and safe care continues to be provided, and if not, what is the number of FTEs that will be needed to cover a 20% increase in volume.
1. Suggest all the information Sandra needs to collect in order to project the FTEs needed for the next fiscal year accounting for the projected increased capacity. Remember, she is new to her position so be sure to include background data on the unit itself as it relates to previous budgets, nursing staff, and the organization. In other words, summarize your approach to this Case Study.
2. Sandra has collected the following census information on all five units for the last month, in
addition to what was asked in question number one. Calculate the ADC and Occupancy Rate for each unit using the Daily Census/Occupancy Rate table to determine which unit is currently at 88% occupancy rate and projected to increase over the next year.
Unit
Beds
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Total Patient Days
A
35
31
30
31
30
29
30
31
30
31
29
29
32
31
33
31
31
33
34
34
34
34
32
30
32
31
30
30
33
31
34
0
941
B
15
15
14
11
9
7
12
12
15
13
13
16
15
15
15
16
16
15
14
15
16
15
13
13
17
16
15
16
16
14
15
0
424
C
13
10
12
11
11
11
13
13
13
12
13
12
12
12
13
13
13
13
13
13
13
13
13
13
12
12
12
12
13
13
13
0
372
D
32
30
27
27
24
26
23
27
29
28
28
25
27
30
26
31
31
30
30
30
32
32
32
26
25
25
25
23
31
31
30
0
841
E
6
6
3
3
3
3
5
5
5
2
2
2
2
4
4
3
3
0
0
0
6
5
5
3
3
3
2
5
4
3
3
0
97
(adapted from…..Healthcare Financial Management Association (2012). Managing fiscal resources: A budget and productivity case study. Retrieved from hfmamd.org
Average Daily Census/Occupancy Rate
Unit
ADC
Occupancy (%)
A
B
C
D
E
The Unit with an 88% occupancy rate is _____.
3. Using data contained in the first questions, complete the table below and determine the Average Length of Stay (ALOS) for the following three units. Show your work.
Unit
# Beds
Patient Days
# Discharges
Average Length of Stay (ALOS)
A
110
C
96
D
85
What is the ALOS for the unit you identified earlier at an 88% occupancy rate? _____
You have determined the Unit for which Sandra must make FTE projections. For the remaining questions in this section, refer to the figures used and or obtained related to the Unit identified in Question 1.
Additional information includes
• the budgeted hours of care per patient day (HPPD-budgeted) is 8.0
• each employee receives 300 paid non-productive hours/year.
4. Calculate the number of FTEs needed for the Unit. Show the formulas used and all calculations. Include the reference used for your calculations at the beginning of your work.
5. Calculate the TOTAL FTEs needed accounting for nonproductive time. Include the reference used for your calculations at the beginning of your work.
6. Sharon now knows how many total FTEs are currently needed on the unit to provide safe, quality care to the patients on the unit. However, with a 20% projected increase in occupancy rate and average length of stay remaining steady on the unit, how will the required FTEs be affected?
7. Calculate the TOTAL FTEs required to reflect an increased patient volume of 20% (don’t forget to account for nonproductive time).Include the reference used for your calculations at the beginning of your work.
8. When Sharon calculated the number of FTEs budgeted currently in this unit and compared it to the number of actual FTEs being paid for, she found she was under budget by three FTEs. Explain how that could have happened and how this information affects her FTE budget request for the next year.
Section Two—Variance Analysis
Variance Analysis Case Study
During the month of February, an outpatient surgery clinic has incurred a significant unfavorable variance. The director of the clinic is quite concerned, as this has never occurred before. The director gathers information on total nursing care hours, average hourly rate of the employees, and total patient visits to determine what caused the variance.In addition, the director receives the patient acuity levels for the month of February.
Budget
Actual
Budget Variance
Patient Days
475
565
Nursing Care Hours
HPPD
7.0
7.6
Average Hourly Pay
$35.00
$45.00
$10.00
Total Payroll Costs
(Table adapted from: Rundio, A. (2016). The nurse manager’s guide to budgeting and finance, 2nd. Ed, Indianapolis, IN: Sigma Theta Tau International)
1. Complete the monthly personnel report for the surgical unit.
2. Calculate each of the following. Include the formulas used with reference. Remember, as this monthly report deals with payroll, the variances should be in dollars.
a. Volume (efficiency) variance:
b. Quantity (volume) variance:
c. Cost (price) variance:
3. What is the total variance in personnel budget for this month?
4. Analyze all the factors that made the differences and why the variances occurred. How can this variance be justified?
5. In what ways might these variances inform the current or future budgets?
NR533 Financial Management in Healthcare Organizations
Week 5 Assignment
Break-even Analysis Assignment V4
REQUIREMENTS:
Answer the questions and complete the calculations required for the assignment.
Submit your answers on a Word document,with the heading of Week 5Assignment. For the questions requiring a written response, please adhere to proper grammar and syntax, and provide references. For the questions requiring calculations, show all your work and follow the format that has been provided for the calculations in the lesson for Week 5.
1. When performing calculations, standard rounding rules apply. If the number to the right of the decimal is less than 5, round down to the nearest whole number, e.g., 33.4 = 33 If the number to the right of the decimal is 5 or greater, round up to the nearest whole number, e.g. 33.5 =34.
2. Read the question carefully. Pay close attention to the units be asked and keep them consistent. For example, hours vs FTEs; days vs months vs years.
3. Provide ALL formulas with references. Designate which formula associates with which source. It is not sufficient to simply list the source at the beginning of the section. Write out the formula used BEFORE filling in the numbers.Formulas used should be taken from one of the required resources for this course.
Example: Total Contribution Margin (CM) = (CM) category 1 + CM cat 2 + CM 3
Leger, J.M. & Dunham-Taylor, J. (2018). Financial management for nurse managers: Merging the heart with the dollar, 4th Ed. Burlington, MA: Jones-Bartlett.
PREPARING THE PAPER
Break-Even Analysis Case Study
You and several of your colleague business partners have decided to establish an outpatient fertility clinic in your service area. All of you are very familiar with this patient population base, have completed an extensive market analysis thatdemonstrated a great need for the service, and are comfortable with setting up a business and the costs associated with this special group of patients.
As part of the business plan, you and your partners will need to convince stakeholders that this new service endeavor will be viable. They will want to know how many patients visits annually will need to occur and how long it will take for the service to be at least cost neutral or profitable. To provide them with this information you will perform a break-even analysis. Use the following data, conduct the analysis accounting for the contribution margin of each patient acuity category.
• Fixed Costs: $9,788,000 (start-costs, specialty physicians, anesthesiologists, APNs, staff
nurses and other staff salaries, specialty equipment, other miscellaneous)
• Variable costs: $500/patient visit (specialty equipment, oxygen supplies, other
miscellaneous)
• Clinic days: Monday-Saturday- 312 days/year
• Projected patient visits per year: 7480
• Patient charges by patient acuity category:
o Simple (25%)————$2000/visit
o Moderate (60%)——–$6500/visit
o Complex (15%)———$10,000/visit
Break-even Analysis Data Table
Acuity Category
Percentage %
Charge per Visit
Visits per Year
Charges per Year
Visits per Day
Charges per Day
Contribution Margin
Simple
25%
$2000
Moderate
60%
$6500
Complex
15%
$10,000
Expected Total Daily Charges
ExpectedTotal Daily Revenue
Break Even point in days
Break Even point in visits
1. Describe your approach to this case study. In addition to the numbers given, what do you need to know before you can calculate the break-even analysis?
2. Perform the calculations needed for the break-even analysis. Show your work, formulas used, and reference the formula. When calculating the patient visits per day, round to the nearest whole. After you’ve completed the calculations, record your results in the appropriate place in the table.
3. How many patient visits are expected per day?
4. What is the contribution margin of each category of patient?
5. Based on the data and your calculations, what is the expected daily revenue?
6. How long (in days, months, or years) will it be before the return on investment begins?
7. How many patient visits will be required to reach the break-even point?
8. Discuss your analysis. Is the project viable and profitable service? Does the analysis support moving forward with the business? Cite specific data from you analysis to support your interpretation
NR533 Financial Management in Healthcare Organizations
Week 7 Assignment
Business Plan Assignment
Purpose
The purpose of this assignment is to develop a business plan for a quality improvement project, program, or service related to an area of student interest within the selected healthcare organization.
Due Date: Sunday 11:59 p.m. MT at the end of Week 7
Total Points Possible: 200
I. REQUIREMENTS:
1. Address all components of the business plan as outlined in Preparing the Paper.
2. Refer to the Business Plan Worksheet, available for download on the Course Resources page, as needed to complete the assignment.
3. This paper will be graded on quality and completeness of information, accuracy of any required calculations, use of citations, use of standard English grammar, sentence structure, and organization based on the required components.
4. Create this assignment using Microsoft Word, which is the required format for all Chamberlain documents. You can tell that the document is saved as an MS Word document because it will end in .docx.
5. Use of Turn It In is used for this assignment and is part of the submsiion into the assignment portal, See the Turn It In guidelines within the Resources tab on the left.
6. Submit the final paper to the Files by Sunday 11:59 p.m. MT. Any questions about this paper may be discussed in the weekly Q & A forum under Discussions.Once your paper has been submitted to Files, you are not allowed to resubmit to that portal without express approval by the faculty.
7. The length of the paper is to be no greater than sevenpages including the appendices, but excludes title page and reference page. Extra pageswill not be read nor graded by the instructor. Content beyond the page limit will not be considered part of the paper. Your business plan worksheet should be included in the appendices section but is not counted as part of your page limit..
8. APA format (6th edition) is required in this assignment, including a title page and a reference page. Use headings for the sections of the paper according to APA format. Remember that the introduction does require a heading. See the APA manual for details of formatting. You may also refer to Guidelines for Writing Professional Papers found in Course Resources.
9. A complete paper will contain all components outlined under Preparing the Paper.
II. PREPARING THE PAPER
A business plan is a detailed plan for a proposed program, project, or service.
The following sections should be clearly present with headings and complete. Use the headings provided in the outline below.Remember, there is no heading used for the introduction section.
I. Introduction/Overview
a. Purpose of assignment
b. PICOT
c. Purpose of business plan
d. What will be included
II. Proposal
a. Cover letter
b. Executive Summary
III. Detailed Abstract
a. Two types analyses
b. Marketing and financial plans
IV. Appendices
a. Financial tables
b. Graphs/charts
V. Conclusion
a. What was covered in the plan
b. Strengths and weaknesses of the plan
c. Approach for approval
1. Clearlyintroduce your business-plan assignment in the Overview section. This should be no longer that one paragraph. Include purpose of your assignment, PICOT as basis for and purpose business plan; and what will be covered in the assignment.
2. Include a clearly articulated cover letter written in business letter format, active voice and exactly as it would be read by leadership. Include overview of issue, proposed solution, and action request. There should be no other content on this page except for the business letter.
3. Present a captivating executive summary that is interesting and captures the interest of leadership and draws them in to read further. Content includes (1) a description of the proposed project, program, or service, (2) why it is being proposed, and (3) what outcomes are most likely to occur as a result.
4. Detailed Abstract expands the three areas of the executive summary.
a. Expand description of project purpose
b. Issue/problem defined; supportive evidence for project
c. Expected outcomes and project timeline
d. Marketing/needs analyses and plans at least two strategies
e. Fit with mission of organization
f. Fit with current services
g. Financial plan including budgetary needs
h. Financial impact on stakeholders (organization, patients, unit of service, community)
i. Break-even analysis and cost/benefit analysis results with reference to actual budget and analysis in appendices
5. Appendices should include any financial tables, charts, or graphs, or other supporting documents referred to in the detailed abstract. The business plan worksheet should be included in the appendices.
6. Conclusion for the paper includes an overview of what was covered in the paper, strengths and weaknesses of the plan, and plan for seeking proposal approval.
7. The paper length will be sevenpages maximum including the appendices and excluding title and reference page(s).
Note: If you go over the paper length, the additional information will not be read nor considered for part of you grade by the instructor.
8. Title and reference page(s) must be in APA format (6th edition).
9. Use 12-point Times New Roman font and one-inch margins on all sides of the paper.
10. Note: After submitting your assignment to Files, please upload your completed executive summary into the Week 8 designated Discussion to share with your peers
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