1. Review table 14-5 (p.152) operating room operating data and choose 3 expense items that look interesting to you. Take special note to the expenses that have the most % change. a. Complete and show the math (even though it is completed for you) the common sizing (vertical) % of all three you chose. b. Complete and show the math (even though it is completed for you) the trend analysis (horizontal) % of all three you chose c. Develop some questions you would want to ask of why such a variance between comparative expenses from current year and prior year ( remember you are not the accountant or the manager to solve the issue but the investigator to control these management issues). 2. Are you or your immediate supervisor involved with staffing decisions? If so, are you aware of how staffing forecasts are prepared in your organization? Describe an example c. Develop some questions you would want to ask of why such a variance between comparative expenses from current year and prior year ( remember you are not the accountant or the manager to solve the issue but the investigator to control these management issues). 2. Are you or your immediate supervisor involved with staffing decisions? If so, are you aware of how staffing forecasts are prepared in your organization? Describe an example 3. As a manager, you must either review or prepare required data, your responsibility is to recall and apply the elements of consistency. Why? 4. If you reviewed a budget at your workplace do you think the major increases and decreases could be explained? Why or why not? 152 CHAPTER 14 Trend Analysis, Common Sizing, and Forecasted Data Table 14-5 Vertical and Horizontal Analysis for the Operating Room Comparative Expenses Account 12-Month Current Year 12-Month % Prior Year % Annual Increase % of (Decrease) Change Social Security 60,517 4.97 68,177 5.70 Pension 20,675 1.70 23,473 Health Insurance 8,422 0.69 18,507 1.55 (7,660) -12.66 1.96 (2,798) -13.53 (10,085) -119.75 Child Care 4,564 0.37 Patient Accounting 155,356 12.76 4,334 123,254 10.30 0.36 230 5.04 32,102 20.66 Admitting 110,254 9.05 101,040 8.45 9,214 8.36 Medical Records 91,718 7.53 94,304 7.88 (2,586) -2.82 Dietary 27,526 2.26 35,646 2.98 (8,120) -29.50 Medical Waste 2,377 0.20 3,187 0.27 (810) -34.08 Sterile Procedures 78,720 6.46 70,725 5.91 7,995 10.16 Laundry 40,693 3.34 40,463 3.38 230 0.57 Depreciation-Equipment 87,378 7.18 61,144 5.11 26,234 30.02 Depreciation-Building 41,377 3.40 45,450 3.80 (4,073) -9.84 Amortization-Interest (5,819) -0.48 1,767 0.15 (7,586) 130.37 Insurance 4,216 0.35 7,836 0.65 (3,620) -85.86 Administration 57,966 4.76 56,309 4.71 1,657 2.86 Medical Staff 1,722 0.14 5,130 0.43 (3,408) -19791 Community Relations 49,813 4.09 40,618 3.39 9,195 18.46 Materials Management 64,573 5.30 72,305 6.04 (7,732) -11.97 Human Resources 31,066 2.55 13,276 1.11 17,790 5727 Nursing Administration 82,471 6.77 92,666 7.75 (10,195) -12.36 Data Processing 17,815 146 16,119 1.35 1,696 9.52 Fiscal 17,700 1.45 16,748 1.40 952 5.38 Telephone 2,839 0.23 2,569 0.21 270 9.51 Utilities 26,406 2.17 38,689 3.23 (12.283) -46.52 Plant 77,597 6.37 84,128 7.03 (6,531) -8.42 Environmental Services 32,874 2.70 37,354 3.12 (4,480) -13.63 Safety 2,016 0.17 2,179 0.18 (163) -8.09 Quality Management 10,016 0.82 8,146 0.68 1,870 18.67 Medical Staff 9,444 0.78 9,391 0.78 53 0.56 Continuous Quality Improvement 4,895 0.40 0 0.00 4,895 100.00 EE Health 569 0.05 1,513 0.13 (944) -165.91 Total Allocated 1,217,756 100.00 1,196,447 100.00 21,309 175 All Other Expenses 1,211,608 Total Expense 2,429,364 IMPORTANCE OF FORECASTS The dictionary defines "to forecast" as "to calculate or predict some future event or condition. usually as a result of study and analysis of available pertinent data." From the manager's viewpoint, forecasted data are information used for purposes of plan- ning for the future. Forecasting, to some degree or another, is often required when producing budgets. (Budgets are the subject of two of the following chapters.) It is pretty simple today to create "what if" scenarios on the computer. But the important thing for managers to remember is that assumptions directly affect the results of forecasts