<p> HS 6200 - Budgeting Q4 Lecture Notes Joe Riley Prof: Dr. Fagin July 5, 2007 Student Presentations  Cross National Comparison of Health Systems Provided in 5 OECD Countries  By Selen  France is the #1 ranked health system in the world, while the US is 37th.  The US has the highest GDP towards healthcare at $12.9 trillion, while it is ranked #1 in customer satisfaction  International Healthcare Tourism  By Michelle  BlueCross BlueShield members of South Carolina can now receive care overseas at a fraction of the cost through Companion Global Healthcare. Perks of the program include: . Surgical Services, Travel Arrangements, VIP transfer from airport, Passport and Visas, Scheduling of Care Dr. Fagin’s Lecture  Why do we budget?  You make people in the organization accountable (for their expected revenues and expenses).  Budgeting is the process of converting, of ‘dollarizing’, the operating plan into monetary terms.  Types of Budgets  Bottom-up – starting at the lower levels on the floor, up to the VP levels to create a budget . Pros: empowers people (makes them feel like they had a hand in the planning) . Cons: doesn’t take global knowledge from the strategic plan into account. . E.g. Most hospitals use this approach  Top-Down Approach – Money is received at the top (executive level), and budgets are planned for the lower levels. . Pros: easier for execs to know how much money can be spent, and is needed in alignment with the strategic plan. . Cons: lower people may panic b/c won’t have enough money, etc. . E.g. Most governmental projects use this approach (CDC does)  Certificate of Need (CON) – a program that exists in approx. 37 states (state administered) that makes applicants for new facilities and new services in healthcare. The rules vary state to state.  E.g. We’re trying to plan for an outpatient surgery center. . We’re a hospital, so we have to figure things out to make sure it’s a good decision to expand our services. Make projections:  Revenue – calculate by volume  Volume (predict # of patients that need the surgeries you will provide) – Cases Expected by type of Surgery  Estimate of Cases by Physician  Payer Morbidity – some payers too much of a liability to work on due to other co-morbidities  Volume leads to Revenue  Take in payer mix, reimbursement, etc. to get actual $$ values  Rate/ Population – data you can get stratified by demographics like age. You can get this data from the state, but you usually have to pay for it. (free from Dartmouth Atlas)  Expenses – list all possible expenses  Payroll (what kind of payroll? how many? what kind of staff?)  Generate staffing levels vs. volume  Supplies – also volume related  Etc…  State of Georgia is considering getting rid of CON – b/c it can go against promoting qualified competition, which will drive down costs and benefit healthcare overall.  Concepts to Review from Chpt. 13; Nowicki book  Fixed vs. Flexible Budgeting  Discrete vs. Continuous Budgeting  Projecting Volumes  Converting Volumes into Revenues  Evaluating Budget Performance</p>