msn 6216 Need help with this. 8/1/2020 Assessment 2 MSN-FP6216 – Summer 2020 – Section 01 https://courserooma.capella.edu/webapps/blackboard/conte

msn 6216
Need help with this.

8/1/2020 Assessment 2 MSN-FP6216 – Summer 2020 – Section 01

Don't use plagiarized sources. Get Your Custom Assignment on
msn 6216 Need help with this. 8/1/2020 Assessment 2 MSN-FP6216 – Summer 2020 – Section 01 https://courserooma.capella.edu/webapps/blackboard/conte
From as Little as $13/Page

https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_266816_1&content_id=_9030362_1&mode=reset 1/3

Assessment 2
Preparing and Managing an Operating Budget

Overview

Prepare an 810-page operating budget for a hospital unit.

Note: Complete the assessments in this course in the order in which they are presented.

Sound financial management is essential to the fiscal well-being of all health care organizations, and the nurse
leader plays an important part. Consequently, the preparation and effective management of operating budgets is
a critical skill for nurse leaders. The budget guides leaders in optimizing the use of resources, and because nurses
are closest to patients, they understand very well what it takes to operate on a daily basis and provide safe, high-
quality care.

This assessment provides an opportunity for you to develop an operating budget for a health care unit. Keep in
mind, staff is a large part of this budget and is often hard to control.

By successfully completing this assessment, you will demonstrate your proficiency in the following course
competencies and assessment criteria:

Competency 1: Design an operating budget that incorporates variances or discretionary spending.
Prepare an operating budget.
Explain how a budget is designed and created.

Competency 2: Develop a plan for managing the labor force, within the parameters of the budget and
productivity.

Develop an approach to ongoing budget management.
Competency 5: Apply financial principles to a strategic plan for achieving organizational goals and fiscal
success.

Develop a strategic plan.
Competency 6: Communicate effectively with diverse audiences, in an appropriate form and style,
consistent with applicable organizational, professional, and scholarly standards.

Present budget data and information clearly and accurately.
Integrate relevant and credible sources of evidence to support budget data and information,
correctly formatting citations and references using APA style.

SHOW LESS

Competency Map

Use this online tool to track your performance and
progress through your course.

CHECK YOUR
PROGRESS

Context

Details Attempt 1 Available Attempt 2 Attempt 3

Tutorials Support Log Out Todd Brandt-dee 2

https://campus.capella.edu/web/competency/

https://campus.capella.edu/web/technical-support/courseroom-help/courseroom-3-help?deepLink=true

http://campustools.capella.edu/support/auth.aspx

https://courserooma.capella.edu/webapps/login?action=logout

8/1/2020 Assessment 2 MSN-FP6216 – Summer 2020 – Section 01

https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_266816_1&content_id=_9030362_1&mode=reset 2/3

Numbers on a budget sheet or report are only numbers. Nurse leaders are major decision makers who must be
informed and able to make data-driven decisions, often in a very limited amount of time. Financial analysis
consists of the organization and presentation of data in a meaningful and relevant format that enables analysis,
comparison, and synthesis.

One of the major challenges facing nurse leaders with regard to financial analysis is determining how many and
what types of health care goods and services to deliver. Leaders must also consider how much to charge for
goods and services and how to break even or generate profits.

Questions to Consider

As you prepare to complete this assessment, you may want to think about other related issues to deepen your
understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss
them with a fellow learner, a work associate, an interested friend, or a member of your professional community.
Note that these questions are for your own development and exploration and do not need to be completed or
submitted as part of your assessment.

SHOW MORE

Resources

Required Resources

The following resources are required to complete the assessment.

APA Style Paper Template [DOCX]. Use this template for the written portion of your operating budget.

SHOW MORE

Assessment Instructions

Note: Complete the assessments in this course in the order in which they are presented.

Preparation

You are the nurse manager of a 35-bed hospital unit with 20 full-time equivalent (FTE) staff. You have been
given the task of getting the budget under control. Several people have recently left the unit, and you have
been working to fill those open positions. Your staff work scheduled overtime and many sign up to work extra
shifts. Your unit serves an older population, as well, and has incurred expenses associated with this group of
patients.

Note: Remember that you can submit all of, or a portion of, your draft to Smarthinking for feedback, before
you submit the final version for this assessment. However, be mindful of the turnaround time of 2448 hours
for receiving feedback, if you plan on using this free service.

Requirements

Note: The following requirements correspond to the grading criteria in the assessment scoring guide. Be sure
that your budget addresses each point, at a minimum. You may also want to read the Guiding Questions:
Preparing and Managing an Operating Budget [DOCX], linked in the Resources under the Suggested
Resources heading, to better understand how each criterion will be assessed.

Tutorials Support Log Out Todd Brandt-dee 2

http://campustools.capella.edu/redirect.aspx?linkid=4242

https://campus.capella.edu/web/technical-support/courseroom-help/courseroom-3-help?deepLink=true

http://campustools.capella.edu/support/auth.aspx

https://courserooma.capella.edu/webapps/login?action=logout

8/1/2020 Assessment 2 MSN-FP6216 – Summer 2020 – Section 01

https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_266816_1&content_id=_9030362_1&mode=reset 3/3

Prepare and submit an operating budget for your hospital unit.

Prepare the operating budget.
Note: Assemble your budget figures in a table, using a format of your choice. You may use
either Microsoft Word or Excel to create your budget table.

Explain how the budget was designed and created.
Develop a strategic plan.
Develop an approach to ongoing budget management.
Present budget data and information clearly and accurately.
Integrate relevant and credible sources of evidence to support your budget data and information,
correctly formatting citations and references using current APA style.

Additional Requirements

If you use Microsoft Excel to create your budget table, submit the Excel file along with your budget narrative.
You may also add the Excel file to your Word document as an embedded object.

Format your budget narrative using APA style.

Use the APA Style Paper Template [DOCX], linked in the Resources under the Required Resources
heading. An APA tutorial is also provided in the resources to help you in writing and formatting your
document. Be sure to include:

An APA-formatted title page and reference page. An abstract is not required.
A minimum of five properly formatted citations and references.

Your budget should be 810 pages in length, not including the title page and reference page.

Portfolio Prompt: You may choose to save this learning activity to your ePortfolio.

How to use the scoring guide

Preparing and Managing an Operating Budget Scoring Guide

Use the scoring guide to enhance your learning.

VIEW SCORING
GUIDE

This button will take you to the next available assessment
attempt tab, where you will be able to submit your assessment.

SUBMIT ASSESSMENT

Tutorials Support Log Out Todd Brandt-dee 2

https://campustools.capella.edu/redirect.aspx?linkid=2974

https://courserooma.capella.edu/bbcswebdav/institution/MSN-FP/MSN-FP6216/180400/Scoring_Guides/u02a1_scoring_guide.html

https://campus.capella.edu/web/technical-support/courseroom-help/courseroom-3-help?deepLink=true

http://campustools.capella.edu/support/auth.aspx

https://courserooma.capella.edu/webapps/login?action=logout 8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 1/9

Vila Health: Developing an
Operating Budget

Introduction
Locations
Medical Unit Office
SAMC Budget
Conference Room
Pediatrics Department Operating Budget Adjustments Proposed
Adjusted Budget
Conclusion
Credits

Introduction
Vila Health: Developing an
Operating Budget
Budgeting may seem dry and boring, but it is crucial, since it is
the process by which an organization determines what it is going
to do and what specific actions it is going to take to pursue its
goals. Half of this process is the operating budget, which
allocates funds for daytoday functioning.

You are in charge of the budget for St. Anthony Medical Center’s Med-
Surg department. These are difficult times at the hospital; while the
overall hospital budgeting process is ongoing, there have been some
unexpected revenue shortfalls, and hard choices are in order.

SAMC Office Visits.
Another day of work at St. Anthony Medical Center. First, you
should stop by the Medical Unit Office and check in. Afterwards,
you should head to the conference room.

8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 2/9

FY 2017 YTD
(Jul – Dec)

FY 2017 Budget FY 2017
Variance YTD

OPERATING
REVENUE

Inpatient Revenue $345,040,349 $700,000,000 $(4,959,651)

Outpatient Revenue $232,498,397 $525,000,000 $(30,001,603)

TOTAL PATIENT
SERVICES REVENUE

$577,538,746 $1,225,000,000 $(34,961,254)

SAMC Medical Unit Office
It looks like you have an email!

From: Owen Welch, CFO

Subject: Budget Forecast

Hi, this is Owen. I’m sending you this email to give you a headsup. I
know you’ve been working on the MedSurg budget for the next fiscal
year, and that you have have a pretty solid draft. Well, I just got out of a
forecast meeting, and I hate to say it, but it looks like the rumors are true.
I think we’re going to have to be ready to trim up to 6 percent from next
year’s operating budget to address these revenue shortfalls. I’d like you
to take a look at your draft so far, and then think about how you might
handle this.

I know that Anna Jiang over in Pediatrics is in the same boat you’re in,
but she saw the writing on the wall a little sooner and worked up a plan
for cuts to their operating budget. She’ll be giving a brief presentation to
senior leadership this afternoon about her plan it might be worth your
time to go sit in on that and see what she has in mind.

Thanks! I know this is a tough time.
-Owen

SAMC Budget

Income Statement

8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 3/9

DEDUCTIONS FROM
REVENUE

Contractual
Adjustments

$476,543,215 $950,000,000 $1.543,215

Charity and
Uncompensated Care

$6,725,412 $14,000,000 $(274,588)

TOTAL DEDUCTIONS
FROM REVENUE

$483,268,627 $964,000,000 $1,268,627

NET PATIENT
SERVICES REVENUE

$94,270,119 $261,000,000 $(36,229,881)

OTHER OPERATING
REVENUE

Other Operating
Revenue

$3,500,000 $10,000,000 $(1,500,000)

TOTAL OPERATING
REVENUE

$97,770,119 $271,000,000 $(37,729,881)

OPERATING
EXPENSES

Salaries and Wages $42,932,230 $88,000,000 $(1,067,770)

EMPLOYEE BENEFITS $12,624,012 $25,000,000 $124,012

PROFESSIONAL FEES $4,082,215 $9,000,000 $(417,785)

SUPPLIES $23,883,407 $46,000,000 $883,407

PURCHASED
SERVICES – UTILITIES

$1,632,191 $3,000,000 $132,191

PURCHASED
SERVICES – OTHER

$11,536,320 $22,000,000 $536,320

DEPRECIATION $8,455,254 $17,000,000 $(44,746)

RENTALS AND
LEASES

$2,252,670 $4,000,000 $252,670

8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 4/9

INSURANCE $2,715,378 $5,000,000 $215,378

LICENSE AND TAXES $7,992,144 $18,000,000 $(1,007,856)

INTEREST $8,393,790 $18,000,000 $(606,210)

PROVISION FOR BAD
DEBTS

– – –

OTHER DIRECT
EXPENSES

$4,744,642 $8,000,000 $744,642

TOTAL OPERATING
EXPENSES

$131,244,253 $263,000,000 $(255,747)

NET OPERATING
REVENUE

$(33,474,134) $8,000,000 $(37,474,134)

NET REVENUE
BEFORE ITEMS
LISTED BELOW

$(33,474,134) $8,000,000 $(37,474,134)

EXTRAORDINARY
ITEM

– – –

NET REVENUE OR
(EXPENSE)

$(33,474,134) $8,000,000 $(37,474,134)

FY 2017 YTD
(Jul – Dec)

FY 2017 Budget FY 2017
Variance YTD

OPERATING
REVENUE

Inpatient Revenue $21,123,516 $50,000,000 $(3,876,484)

TOTAL PATIENT
SERVICES REVENUE

$21,123,516 $50,000,000 $(3,876,484)

OPERATING
EXPENSES

Salaries and Wages $12,157,632 $23,000,000 $657,632

Med/Surg Department Budget

8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 5/9

Employee Benefits $3,040,408 $5,750,000 $165,408

Professional Fees $250,160 $400,000 $50,160

Supplies $5,883,497 $10,000,000 $883,497

Purchased Services –
Utilities

$27,456 $50,000 $2,456

Purchased Services –
Other

$23,484 $50,000 $(1,516)

Insurance $57,315 $105,000 $4,815

License and Taxes $21,456 $40,000 $1,456

Other Direct
Expenses

$972,157 $1,500,000 $222,157

TOTAL OPERATING
EXPENSES

$22,433,565 $40,895,000 $(1,986,065)

NET REVENUE OR
(EXPENSE)

$(1,310,049) $9,105,000 $(5,862,549)

After hearing Owen’s message and looking at the draft
budget, what are your initial thoughts?

SAMC Conference Room

Budget Meeting in Progress
Your counterpart in Pediatrics, Anna Jiang, is briefing
management on how her department will address the
budget shortfall.

Presentation by Anna Jiang

Hi everybody, thanks for coming.

8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 6/9

I want to jump right into this, don’t want to take up too much time. This…
has not been an easy process. When I got the word that I needed to trim
6 percent from next year’s Pediatrics budget, I gulped. Six percent is a
big bite, and it’s even harder when we’re dealing with it on such short
notice. It’s like trying to fix a car as it’s rolling down the highway.

Anyway. My first reaction – like everybody’s, I think – was to try to
distribute the cuts equally throughout all of my line items. But of course,
that’s not possible. Some of them are fixed in ways that I just can’t
budge. It’s not like I can just unilaterally say we’re going to pay less for
licenses and taxes, for instance.

So I’ve tried to look at places where cuts are even possible, regardless of
how hard they are. My first hope was that I could make up some room in
the Supplies line item. But I can’t. Not enough. We can live with maybe a
3 percent trim there, but even that is pushing dangerously close to not
having the right materials to do our jobs safely. Again, it’s not like we can
just unilaterally decide not to wear rubber gloves one day a week.

You know where this is going. It breaks my heart to do this, but in the
end, staffing is the one place where, if I push hard enough, I can create
some wiggle room. We’re pretty sure that we have a couple of
retirements happening in the department in the next six months. If we
don’t replace them, and if we have at least one other departure – which
would be expected, given normal turnover rates – I believe we can
absorb the shortfall by cutting staff through attrition. We just won’t
backfill the positions.

This isn’t an approach that I love – I’m well aware that this is going to
increase the burden on our remaining staff, and is going to lead to
inefficiency in the short term and burnout and higher turnover in the
longer term. To be frank, this is an action that’s going to cost us money in
a couple of years, when we’ll have to clean up the mess that this will
create. But it gets us through the immediate crisis, and that’s what we
need to do if we’re going to survive to deal with those other crises down
the road.

Thank you.

Pediatrics Department Operating
Budget Adjustments Proposed

8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 7/9

Decrease to Salaries/Wages and
Employee Benefits line items through
attrition to achieve requested 6%
reduction.
Salaries and Wages

FY 2017 Budget: $21,000,000
FY 2017 Adjusted Line Items: $19,250,000

Employee Benefits

FY 2017 Budget: $5,150,000
FY 2017 Adjusted Line Items: $4,935,000

Professional Fees

FY 2017 Budget: $400,000
FY 2017 Adjusted Line Items: $400,000

Supplies

FY 2017 Budget: $9,000,000
FY 2017 Adjusted Line Items: $8,730,000

Purchased Services – Utilities

FY 2017 Budget: $50,000
FY 2017 Adjusted Line Items: $50,000

Purchased Services – Other

FY 2017 Budget: $50,000
FY 2017 Adjusted Line Items: $50,000

Insurance

FY 2017 Budget: $105,000
FY 2017 Adjusted Line Items: $105,000

License and Taxes

FY 2017 Budget: $40,000
FY 2017 Adjusted Line Items: $40,000

Other Direct Expenses

FY 2017 Budget: $1,500,000
FY 2017 Adjusted Line Items: $1,500,000

Total Operating Expenses

FY 2017 Budget: $37,295,000

8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 8/9

FY 2017 YTD
(Jul – Dec)

FY 2017
Budget

FY 2017
Variance

YTD

FY 2017
Adjusted
Line Items

OPERATING
REVENUE

Inpatient
Revenue

$19,203,517 $50,000,000 $(5,796,483)

TOTAL PATIENT
SERVICES
REVENUE

$19,203,517 $50,000,000 $(5,796,483)

OPERATING
EXPENSES

Salaries and
Wages

$10,204,669 $21,000,000 $(295,331) $19,250,000

Employee
Benefits

$2,136,201 $5,150,000 $(438,799) $4,935,000

Professional Fees $248,175 $400,000 $48,175 $400,000

Supplies $4,662,491 $9,000,000 $162,491 $8,730,000

Purchased
Services – Utilities

$26,221 $50,000 $1,221 $50,000

Purchased
Services – Other

$24,303 $50,000 $(697) $50,000

Insurance $52,178 $105,000 $(322) $105,000

License and
Taxes

$22,903 $40,000 $2,903 $40,000

Other Direct
Expenses

$926,388 $1,500,000 $176,388 $1,500,000

FY 2017 Adjusted Line Items: $35,060,000

Adjusted Budget

Pediatric Department Budget

8/1/2020 Vila Health: Developing an Operating Budget Transcript

https://media.capella.edu/CourseMedia/MSN6216/VilaHealthOperatingBudget/transcript.html 9/9

TOTAL
OPERATING
EXPENSES

$18,303,529 $37,295,000 $(343,971) $35,060,000

NET REVENUE
OR (EXPENSE)

$899,988 $(5,452,512) $3,347,034

Conclusion
You have completed the Developing an Operating Budget activity. In this
activity, you learned about some budget realities at St. Anthony Medical
Center, and some trends to keep in mind as you develop your budget for
the Medical-Surgical Unit.

Credits
Subject Matter Expert:
Georgann Weissman
Interactive Design:
Lori Olson
Instructional Design:
Stephen Sorenson
Media Instructional Design:
Keith Pille, Felicity Pearson
Project Management:
Nakeela Hall

Licensed under a Creative Commons Attribution 3.0 License
(https://creativecommons.org/licenses/by-nc-nd/3.0/)

https://creativecommons.org/licenses/by-nc-nd/3.0/

Leave a Comment

Your email address will not be published. Required fields are marked *