Making a hospital budget is only second to medical delivery systems in for a hospital. In fact, if a budget is not properly written, the hospital may be unable to deliver medical services at all. So many expenses and sources of revenue must be taken into consideration, so the budget process takes an expert to get through it successfully. Let's find out how to start.
Determine hospital revenue. Revenue can come from patient payments, tax dollars, donations, insurance credits. Be sure to deduct a percentage of the patient bills that will remain uncollected, the charity work expected by the hospital and the pro bono work it does.
Figure out expenses. Start with the physical facility. How much does it cost to keep up the building or buildings. What is the maintenance cost of each department, engineering, air-conditioning, heat, water, other utilities. Know what equipment costs, how much must be replaced per patient day, and if any can be recycled. Include the non-medical cost of each bed in the hospital. Include advertising.
Know the cost of personnel, all employees and ancillary staff, including consultants, outsourced contracts, perhaps laundry or nurse staffing services. For all employees of the hospital, from janitorial to hospitalists, figure the fringe benefits the hospital must pay for each.
Add all medical equipment costs, ongoing and expected expansion or replacement of new diagnostic equipment.
Know the medical costs of each bed. How many staff hours are spent on each bed, occupied or not. Use this figure as an average to get a cost per patient year. Add to that the non medical costs per bed. Include every possible cost that keeps that bed in the hospital. Don't forget replacement costs per annum for any and all patient needs.
What about expansion? Are you planning a new wing, or the renovation of an old one? Are you expanding into a new specialty that could bring in extra revenue? Estimate that revenue when planning your budget.
Don't forget parking garages, lots, landscaping, groundskeeping or window washing.
Include all insurance for the facility and personnel.
Write in an emergency expense fund. Disasters occur and the hospital must be prepared for them when they arrive.
To do the budget, use a spreadsheet. Enter all categories and the cost of each. Add all taxable items and the percentage of each. You probably get reduced rates on utilities, or least a break on the taxes on them. Enter all formulas for those. It is possible your state or your hospital system has one already available. If the spreadsheet exists, use it or modify it for your own needs. If it does not, make one, so making next year's budget is simply a matter of entering numbers and letting the computer do the work.