Project #46527 - Healthcare Finance

Answer the following questions using the Health Information Department Budget furnished below, specifically the data included in Table 8–3:

1.  What would be the dollar impact if the 5 percent increase planned for January 1 were reduced to 3.5 percent and postponed until April 1?

2.  As an alternate cost-saving strategy, determine the annual savings if all hourly staff were reduced from 40 to 37.5 hours as their standard workweek. Consider the top three staff—director, compliance specialist, and registries coordinator—as salaried and thus unaffected by the workweek change.

3.  Determine the total dollar impact if both of the foregoing strategies were implemented together. Remember that the pay increase affects everyone but that the 37.5-hour week affects just hourly staff.

Sample Health Information Department Budget

This budget is based on the following premises:

1.  Fiscal year: July 1 through June 30

2.  Workweek: 40 hours/week; 2,080 hours/year per FTE

3.  Cost of living increase: 5 percent of current base rate (see Table 8–3 for detailed cost of living calculations by position title)

4.  Effective date of cost of living increase: January 1

5.  Overtime rate: time and a half, based on current base for employee

6.  Holiday pay: regular base rate (for employees who work on a scheduled holiday: double time, calculated on current base for each employee)

7.  Temporary agency rate: average rate is $13/hr. for clerical worker, no fringe benefits given

8.  Sick pay: calculated on each employee’s current base

9.  Fringe benefits: 29 percent of total wages and salaries for the department; 29 percent for each individual employee

10. Wage and salary calculations are displayed to show these details:

  Factor                                                                                        Example

  Current annual base                                                                  $58,000

  July–December of current calendar year—total earnings           29,000

  January 1 cost of living increase (5%)                                           2,900

  New annual base effective January 1                                           60,900

  January–June of coming calendar year—total earnings                30,450

  Total needed for full 12-month period of the fiscal year               29,000      +30,450                          $59,450       

Health Information Department Budget

Personnel Costs

Object Code

01               Wages and Salaries                                                 $461,724.00   

02               Fringe Benefits                                                         133,900.00

03               Vacation Relief Coverage                                             2,000.00

04                  Sign- on Bonuses                                                     10,000,00

                     Subtotal A                                                                                 $607,624.00

Equipment

Object Code

10   office chairs (6 at $128 each)                                                     $768.00

                   Automatic Paper Shredder                                               429.00

                   Stepstools (3 at $59 each)                                                177.00

                   Multiterminal Wordprocessing System                       74,000.00

  Subtotal B                                                                                        $75,374.00                                                      

Supplies

Object Code

021             Printed Forms, Stationery, Office                              $51,999.00                                   Supplies: Vendors         

026             Books                                                                              1000.00

027             Journals and Magazine Subscriptions                             1,620.00

028             General Stores Supplies—Internal                                  3,400.00

035             Parking                                                                              -0-

044             Travel                                                                            1,700.00

051             Film Rental                                                                         -0-

                     Subtotal C                                                                                        $59,719

Services

Object Code

122             Contractual Temporaries                                               1,850.00

131             Equipment Rental                                                           2,000.00

134             Outside Contractual Service                                             5,000.00

136             Equipment Repair Contracts                                            2,000.00

138             Computer License Agreement                                        32,000.00

                     Subtotal D                                                                                           $42,850.00

Cost Transfers

Object Code

150             Telephone                                                                        $3,840.00

151             Work Orders                                                                         -0-

152             Postage                                                                                   360.00

153             Photocopy/Print Shop                                                           200.00

154             TV-VCR Rental                                                                       -0-

158             Dietary                                                                                   560.00

                     Subtotal E                                                                                                                                                 $4,960.00

Summary

                   Personnel Costs                                                        607,624.00

                   Equipment                                                                  75,374.00

                   Supplies                                                                 59,719.00

                   Services                                                                  42,850.00

                   Cost Transfers                                                                4,960.00

                     Total                                                     $790,527.00

 

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Due By (Pacific Time) 11/07/2014 03:00 pm
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