Budget Flashcards
Which items are considered part of “Corporate Overhead?” CHOOSE THREE
Question 1Select one or more:
a.
Salaries of Administrative Leadership
b.
Billing and Accounting
c.
Human Resources
d.
Occupational Therapy Salaries
e.
Continuing Education Conference Fee
f.
Wheelchair for Rehab Department
g.
OT staff Licensure & Registration Fees
A. Salaries of Administrative Leadership
b.
Billing and Accounting
c.
Human Resources
What are items with a useful lifespan, typically longer than 1 year, and not intended for sale (such as treatment tables and computers) called?
Question 2Answer
a.
Corporate Overhead
b.
Capital Expenses
c.
Capital Assets
d.
Salary Expenses
capital expenses
Which of the following is a department that does not add to the profit of an organization, but does cost the organization money to operate?
Question 3Answer
a.
Cost Center
b.
Cost Containment
c.
Capital Expenses
d.
Corporate Overhead
corporate overhead
A Fixed Expense refers to:
Question 4Select one:
a.
Costs that remain constant from one month to another
b.
Costs that are anchored to the volume of service you provide
c.
Costs associated with providing care to patients
d.
Costs associated with the organization that are not directly for the patient
A.
Select all that a hospital is required to provide to full time employees, by federal law. CHOOSE THREE.
Question 5Select one or more:
a.
Worker’s Compensation Insurance
b.
Time off for Jury Duty
c.
FICA Taxes withdrawn
d.
Sick Pay
e.
Vacation Pay
A, B, C
How many available hours of therapist actual work is available for one week? Full time employees work M-F 8-4, 30 minute lunch break and 2, 15 minute breaks each day
Full time - OT
7 Hours x 5 days = 35 hours
Part Tim
35 hours/2= 17.5 hours OR
8/2= 4 x 5 days = 20 hours ( no breaks )
How many available hours per year of OT? They receive 15 days of vacation, 10 sick and 7 holiday/personal days
52 weeks x 5 days = 260 days of work possible
Subtract 32 days total off = 228 days
228 days x 7 hours a day = 1596 hours of OT per year
Given that they can treat two patients per hour, how many patient visits do you anticipate you should budget for the following year?
1596 hours x 2 patients/hr = 3192 visits per year
# OT treatments per week = 3912 per year/ 52 weeks = 61 patients per week
If there is typically a 20% cancellation rate by patients. What are your adjusted patient visits?
OT treatments per week: 61 treatments x .8= 48.8 treatments per week
OT treatments per year: 3192 x .8- 2553.6 treatments per year
If net revenue averages $50 per treatment, how much revenue would the department gain from this OT that earns $45,000 per year?
2554 treatments per year x $50= 127700
Subtract $45000 per year
= $82700 net revenue
What methods would you use to justify the .5 FTE OTA
Sessions missed
Productivity
Burn out
Waiting list
Calculate missed revenue
Assuming OT will treat 80% of the patients 2x a day for 30minutes each, how many hours of OT services do you need for each week? And for the year?
80% of 5 bed unit = 4 beds x 2x a day= 8 sessions x .5 hr= 4 hours a day
4 hours a day x 5 days= 20 hours a week
20 hours x 52 weeks = 1040 hours a year
Given that this is a new program and there are evaluation needs, what type of personnel would you hire initially and how many (FTE)? Consider not only direct patient care needs, but also admin needs for new center
Only 5 patients!
1 OTR (1 FTE)> ½ patient care, ½ admin duties
If you have more hours than direct patient hours needed in question 1. What would the personnel be doing in non patient care time?
Order equipment
Arranging space
Marketing
Developing policy and procedure manual
Prof. development
Documentation
FW manual
Billing
In June, the sub acute rehab expands to 10 beds and you are asked to determine additional FTE staffing given the 80% of patients treated by OT 2x a day for 30 minutes (double the treatment needs). What type of FTE? Predict salary costs for the year June- December
10 beds (.8) = 8 patients x 2 visits per day = 16 visits x .5hr
= 8 hours a day x 5 days = 40 hours a week are now needed
1 OTR 7 hours x 5 days= 35 hours x $50hr= $1750 x 52 weeks = $91000/2 (6 months) = $45000
½ OTA 5 hours x $25hr = $125 x 52 weeks =$6500/ 2 (6 months) = $3250
½ OTR 5 hours x $50 = $250 x 52 weeks = $13000/2 (6 months)= $6500
For Profit
Pays Taxes
Investors & Dividends
Restaurants, stores, accounting firms, etc.
Nonprofit
Does not earn profit for its owners; collects payments/donations to provide services and uses profit to further advance the organization~ not invest in business growth for a profit
No taxes
Mission/purpose to further a social cause/provide public benefit (hospitals, universities, national charities and foundations)
May have paid employees
Religious groups, labor unions, Habitat for Humanity, AOTA
Not-For-Profit
Also does not earn profit for its owners
Not required to operate for the benefit of public good; serves the goal of its members
May be tax exempt
Excess funds back into business growth
Run by volunteers
Examples are sports clubs, associations- NYSOTA
OT Revenue
Reimbursement
Contracts
Sales
Continuing Education Tuition
Expense – Budget Categories
Capital Expense (Improvement)
Personnel
Supplies
Overhead
Capital Expense
Expenditure made for an asset with a useful life of more than 1 year
Looks at the return on investment (ROI) in decision making
Equipment (copier, mats), technology (fluidotherapy; US; Driving Simulator)
Capital Expense:Written Justification
Compatibility
Projected patient use
Enhances patient care/safety?
Remain Competitive
Cost Comparison
Durability
Personnel Expenses
Employees as FTE = Full Time Equivalent
Benefits: within department
Continuing education, travel, dues, subscriptions
Benefits in HR Department
Payroll, health insurance, social security, Medicare, liability, vacation, workers comp, sick leave, retirement
Staffing Options
Employees – Full benefits
Per Diem - Liability, staff health benefits, in house required continuing ed & monitor regulations
Contract Service - No benefits (independent contractors & Consultants)
Utilization of Support Staff
Administrative Assistant or Receptionist Support
Aide Support
supplies
Billable items: Directly used with the patient and billed for within the services provided
Non-billable items: Indirect~ Cannot be billed, but supports the organization’s activities
examples of billable supplies
Billable~ bandages, AE, therapy putty, electrodes, and items that need to be replaced and not used repeatedly
Non-billable~ hot packs, US gel, paraffin, pens, stools,
corporate overhead expenses
Support Services~ Linen service, housekeeping, maintenance,
Centralized departments~ Legal counseling, accounting
space and utilities
Space~ cost associated with use of the space
Utilities~ water, gas, electric
Active Learning:What will you need for an outpatient clinic? How much will it cost?
1 Large therapy gym, 1 small treatment room, reception area
Personnel (1 OT, 1 OTA, 1 Admin Assist)
Supplies
Direct (items for Pt.’s)
Indirect (items to support the organization)
Equipment
Modalities/assessments/etc.…
Capital Equipment Expense
OT Budget Process
Review last year’s utilization of services and expenses
Seek feedback on potential needs with OT staff
Review potential shared needs with other departments (PT – OT)
Budgeting
Process of predicting what expenses and revenue will occur over a given period
Budgeting periods
Annual Fiscal Budget
Periodic Moving Budget
OT budget process
Predict potential expense needs and reimbursement changes based on current trends
Complete written justifications for new items or capital improvement items
OT budget process
Review by Rehab Manager
Review by CFO (Chief Financial Officer) or other (accountant, business manager)
Board of Directors Approval
