W6A4 Healthcare Budget Request – Budget Development
How do you make difficult decisions? Do you carefully consider the repercussions of each choice? Perhaps you discuss possible outcomes with others. Maybe you rely on tools for help, even if the tool is a coin that can help you reach a conclusion with a simple flip.
Healthcare organizations generally don’t have an unlimited stack of coins, neither for flipping nor for spending. Therefore, they must be strategic in how they spend the resources they do have.

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Budgeting is a process by which they can decide which projects or purchases are worth the cost involved and whether they should expand their operations, invest in new equipment or services, or pursue other projects with the potential to bring in additional profits.
For this Assignment, you examine how budgets are developed. After developing a sample budget for a product or service, you also examine how ratios can be used to analyze the budget and provide information that can guide choices.
To Prepare
• Reflect on the expenses and revenues you considered in the Week 4 Assignment.
• Consider any other expenses that you have yet to account for in the development, launch, and implementation of the healthcare product or service you have proposed.
• Consult with your internal finance counselor to help identify and estimate any hidden expenses that may not be obvious.
The Assignment: Budget Development
Develop and analyze a budget for your proposed healthcare product or service. To do this, complete the following:
Part 1: Develop the Budget Worksheet:
Open your Excel Assignment Workbook and navigate to the “W6A4 Budget Development” worksheet.
• Using the Healthcare Budget Request Guide for guidance, create a 5-year budget for the healthcare product or service that records the projected expenses and revenues associated with the healthcare product or service you have proposed. Be sure to include startup and operating expenses in your budget. You may bring forward the work from the W4A3 Estimated Expenses assignment and add to it.
• Calculate the budget ratios as directed in the Healthcare Budget Request Guide.
NOTE: You will copy your worksheet and analysis onto the Healthcare Budget Request Template (Word document) for submission.
Part 2: Summary of Analysis and Interpretation of Results:

Create a brief (1- to 2-page) description of your budget and analysis that clearly describes the budget. Be sure to address the following:
• During the course of 5 years, is there an estimated surplus or deficit?
• What percentages of the budget are dedicated to various categories you have defined, such as startup costs, etc.?
• What does this budget mean for your organization?
Place your analysis on the Healthcare Budget Request Template under the section titled W6A4 Projected Budget (Five Year).

Learning Resources

Required Readings (click to expand/reduce)

Penner, S. J. (2016). Economics and financial management for nurses and nurse leaders (3rd ed.). New York, NY: Springer Publishing Company.
• Chapter 5, “Reporting and Managing Budgets” (pp. 111–136)
• Chapter 6, “Budget Planning” (pp. 141–161)
• Chapter 7, “Special Purpose, Capital, and Other Budgets” (pp. 163–186)

Cross, V. (2019). The role of variance analysis in businesses. Retrieved from https://smallbusiness.chron.com/role-variance-analysis-businesses-22641.html

Garcia, M. (n.d.). What does an unfavorable variance indicate? Retrieved April 23, 2019 from http://smallbusiness.chron.com/unfavorable-variance-indicate-81570.html

Investopedia. (2019, March 31). What is a budget? Budgeting terms and tips. Retrieved from https://www.investopedia.com/terms/b/budget.asp

Johnston, J. (2017, January 6). With so much uncertainty, how do you build your hospital’s budget? Retrieved from https://www.hfma.org/Content.aspx?id=51828

Johnston, K. (n.d.). How to develop a budget for a new product or service. Retrieved April 23, 2019 from https://smallbusiness.chron.com/develop-budget-new-product-service-38629.html

Document: Excel Assignment Workbook (Spreadsheet)

Document: Healthcare Budget Request Template (Word document)

Document: Healthcare Budget Request Guide (Word document)

Required Media (click to expand/reduce)

Abyssal Spark. (2013, December 30). How to make a budget in Excel – Part 1 [Video file]. Retrieved from https://www.youtube.com/watch?v=AZbWLu5zzAo

Laureate Education (Producer). (2012a). Budget forms tutorial [Video file]. Baltimore, MD:

Rubric Detail

Name: NURS_6211_Week6_Assignment_Rubric
•
Excellent Good Fair Poor
Create a worksheet that records the following:

Using the Healthcare Budget Request Guide for guidance, create a 5-year budget for the healthcare product or service that records the projected expenses and revenues associated with the healthcare product or service you have proposed. Be sure to include startup and operating expenses in your budget.

Calculate the budget ratios as directed in the Healthcare Budget Request Guide.

Create a brief (1- to 2-page) description of your budget and analysis that clearly describes the budget. During the course of 5 years, is there an estimated surplus or deficit? What percentages of the budget are dedicated to various categories you have defined, such as startup costs, etc.? What does this budget mean for your organization? 75 (75%) – 85 (85%)
The analysis clearly and accurately presents in detail a 5-year budget with projected expenses and revenues.

Ratios are calculated accurately and as directed.

The analysis provides a complete, detailed, and specific summary and interpretation of results that includes a discussion of the estimated surplus/deficit, allocations, impact, and interpretation of the calculated values. 68 (68%) – 76 (76%)
The analysis clearly and accurately presents a 5-year budget with projected expenses and revenues.

Ratios are calculated accurately.

The analysis provides a relatively detailed and specific summary and interpretation of results that includes a discussion of the estimated surplus/deficit, allocations, impact, and interpretation of the calculated values. 60 (60%) – 67 (67%)
The analysis presents a budget that is vague, incomplete, or inaccurate in its portrayal of estimated expenses and revenues.

Ratios are calculated inaccurately.

The analysis provides an incomplete, inaccurate or vague summary and interpretation of results, discussion of the estimated surplus/deficit, allocations, impact, and interpretation of the calculated values. 0 (0%) – 59 (59%)
The analysis presents a budget that is vague, incomplete, or inaccurate in its portrayal of estimated expenses and revenues, or has items missing.

Ratios are calculated inaccurately or are missing.

The analysis provides an incomplete, inaccurate, or vague summary and interpretation of results, discussion of the estimated surplus/deficit, allocations, impact, and interpretation of the calculated values, or items are missing or unaddressed.
Written Expression and Formatting – Paragraph Development and Organization:
Paragraphs make clear points that support well-developed ideas, flow logically, and demonstrate continuity of ideas. Sentences are carefully focused—neither long and rambling nor short and lacking substance. A clear and comprehensive purpose statement and introduction is provided that delineates all required criteria. 5 (5%) – 5 (5%)
Paragraphs and sentences follow writing standards for flow, continuity, and clarity.

A clear and comprehensive purpose statement, introduction, and conclusion are provided that delineates all required criteria. 4 (4%) – 4 (4%)
Paragraphs and sentences follow writing standards for flow, continuity, and clarity 80% of the time.

Purpose, introduction, and conclusion of the assignment are stated, yet are brief and not descriptive. 3.5 (3.5%) – 3.5 (3.5%)
Paragraphs and sentences follow writing standards for flow, continuity, and clarity 60%–79% of the time.

Purpose, introduction, and conclusion of the assignment are vague or off topic. 0 (0%) – 3 (3%)
Paragraphs and sentences follow writing standards for flow, continuity, and clarity < 60% of the time. No purpose statement, introduction, or conclusion were provided. Written Expression and Formatting - English Writing Standards: Correct grammar, mechanics, and proper punctuation 5 (5%) - 5 (5%) Uses correct grammar, spelling, and punctuation with no errors. 4 (4%) - 4 (4%) Contains a few (1–2) grammar, spelling, and punctuation errors. 3.5 (3.5%) - 3.5 (3.5%) Contains several (3–4) grammar, spelling, and punctuation errors. 0 (0%) - 3 (3%) Contains many (≥ 5) grammar, spelling, and punctuation errors that interfere with the reader’s understanding. Written Expression and Formatting The paper follows correct APA format for headings, font, spacing, margins, indentations, parenthetical/in-text citations, and reference list.