Hospital Budgeting Essay Example | Topics and Well Written Essays - 750 words

Hospital Budgeting - Essay Example Favorable variance implies that the actual result exceeded or just equals the budgeted result in the desired direction. For example, if supplies usage is less than the budgeted the variation is favorable because it results to material savings. On the other hand a variance is said to be unfavorable if the actual result is more than the budgeted result in the wrong direction (adverse). For example, if the total wage rate exceeds the budgeted wage rate the variance is termed unfavorable, since more cash outlay is involved than the planned cost (Drury, 2007). Variance can be used to analyze the performance of different firms in the same industry such as hospitals among themselves through a standard rate. Where, it can either be represented in percentage or discrete values. In health sector variance is used to measure the extent of efficiency in utilizing health facilities. It also reveals areas that need further investigation depending on the level of deviation from the expected and the relevant range that is acceptable in the health sector. Variations within the accepted range imply that projects or operations are running on as expected. It is the managers concern that the departmental salaries were higher than the expected in this scenario. The possible causes of salary variance includes: increase in wage rate this would have resulted in adverse salary variance. Also, hike in wage rate might have resulted from hiring extra health worker due to unexpected epidemic within a given season. If for the past period the hospital has experienced high number of patients beyond the planned capacity thus calling for the need to work for overtime hours and recruiting more health workers. From the general principles employment terms overtime hours are paid at a premium. This are greatly inflated our salary expedition beyond the departmental control. Another possible cause of inflated wage cost is the presence of idle time payment. The total idle time in the current period migh t have doubled as compared to the previous financial year. This will negatively influence our total salaries expenditure thus creating large deviation from the budgeted labor cost. The department also may have suffered from the effect of government regulation raise basic wage rate in health sectors. To comply with such rules the hospital might have been forced to raise it basic wage rate to all staffs thus increasing the total wage cost against the budgeted wage cost (Drury, 2007). The second variance of concern was the supplies, which was adverse on the budgeted cost. Supplies variance rises as a result of total deviation of the actual result from the budgeted material cost. Supplies variance could have resulted from materials such as drugs evaporation resulting to reduction in stock thus falling to cure the expected number of patients. This will imply that cost for the evaporated drugs was the total variation from the budgeted. Another cause for this variation could have resulted from an increase in material price. Following the changes in exchange rate, material price rose from the standard cost thus making it expensive to acquire the required supplies (Drury, 2007). This change in price resulted in a change in the total material cost thus recording a negative material variation. In addition, the material usage on patients might have increased by almost double thus reducing the total no of patients from the planned allocation. Supplies variation may also emerged from the

Economic impact of health care reform Term Paper

Economic impact of health care reform - Term Paper Example ertaken major reforms in healthcare through the passing of bills such as the healthcare reform bill in the president Obama’s administration (Scarborough, 2010). However, such major steps can be argued as to have major positive and negative impacts on the economy at large especially due to the fact that this sector has been noted as to account for a the highest government expenditure as compared to other sectors. This essay is a critical evaluation of the economic impacts of the healthcare reform bill. The US has been classified as one of the developed countries in the world where health care contributes to a significant number of approximately 65% of all personal bankruptcy cases, which are reported (Scarborough, 2010). It is also known to spend much of its financial resources in providing healthcare for its citizens. However, reports show that the management of these resources has been slowed down in the past due to the lack of proper healthcare policies, which would ensure that every individual is covered by a medical insurance policy, in order to facilitate them with proper treatment in cases of sickness and accidents as well as lack of proper guidelines to control insurers from exploiting their clients. Due to this, insurance policy holders find themselves in situations whereby they are forced to dig deeper from their pockets so as to pay for the hospital bills after the insurers pay for small portions instead of clearing all the expenses incurred (Scarborough, 2010). This ha s resulted to people refraining from acquiring treatment due to lack of finances to take care of the expensive care provided to them. In fact, most of the people have accumulated a lot of debts and from research it is evident that the highest percentage in this group does not continue to seek further medical treatment out of fear that debts would increase. However, the coming of President Obama into power renewed hope and anticipation among the American communities due to his promise of