A comparison of budget for 2017-18 with the budget made for the year 2018-19 reveals the following:
There is an increase in the cost incurred on Acute admitted in the year 2018-19 as compared to the year 2017-18, the cost has increased from $ 376,244 to $ 394,207, although the volume has only increased by 703 cases, i.e. increased from 83,170 to 83,867. The increase in cost is not commensurate with the increase in volume from the activity, implying that spending per case has increased.
On an overall level total expense on acute disease patients, both admitted, non-admitted and emergency has increased by 5.4% from the last year. Further, expenses on sub-acute diseases’ patients has increased by 4.1% from the year 2017-18 and mental health cost has gone up by 4.4%.
On an overall level it is evident that forecast for revenue during the year has increased from $ 772,343 to $ 813,742, which is compensated by the total expenses which have gone up from $ 791,390 to $ 830,662.
On net result level the profit has gone down by $ 2,127, i.e. profit has reduced to $ 17,445 in 2018-19 as compared to $ 19,572 in 2017-18.
There is an increase in mental health expense from $ 61,023 in 2017-18 to $ 63,721 in the year 2018-19.
In the year 2019-20, it is estimated that the cost for acute diseases shall go up from $ 806,871 to $ 833,800, i.e. an increase of 4.8%. The sub-acute cost of the company is expected to go up by 4.1% as compared to the previous year. And similarly, mental health cost of the company has gone up by 3.2%.
These increases in cost are due to both volume increase and increase in cost per patient. The volumes in acute disease department is forecasted to go up from 126,841 in the year 2018-19 to 129,642 in the year 2019-20.
The volumes in the sub-acute division has gone up from 10,387 in the year 2018-19 to 10,643 in the year 2019-20. Similarly, the mental health department projects the volume going up from 12,373 in the year 2018-19 to 12,646 in the year 2019-20.
The expenses of the company on block funding allocation is expected to go up by 2.2% as compared to the expense in the year 2018-19.
On an overall basis, the total expenses are projected to go up by $ 34,061, i.e. 4.1%, as compared to the expenses in the year 2018-19, whereas the total revenue if projected to go up by $ 38,384, as compared to the revenue in 2018-19.
Thus, as a result of the given increase in expenses and revenue, the net profit is expected to reduce by $ 2,313, i.e. from $ 27,867 to $ 26,344.
Thus, looking at the overall budgeting exercise carried out, it is evident that the volume of business is expected to go up in the year 2019-20 as compared to the previous year and thus, the expenses are also bound to increase accordingly.
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