Departmental Draft Budget Exercise
Outpatient Family Medicine Clinic
	Past 12 Months' Actual Results		Budget Proposal
	TOTAL		TOTAL
Patient Visits	3,840
Gross Charges	$ 1,315,556		-
Contractual Allowances	(723,556)		-
Collection Percent	45.0%		44.8%
Net Patient Revenue	592,000		-
Other Revenue	84,112		-
Total Revenue	676,112		-
Clinical Expenses:
Clinical Physician Compensation	229,803		-
Clinical Staff Compensation	184,563		-
Non-Clinical Staff	68,144		-
Coding/Charge Entry Leased Staff	35,000		-
Fringe Benefits	77,627		-
Total Salaries & Benefits	595,137		-
Operating Expenses:
Supplies	14,883		-
Rent	36,000		-
Malpractice	5,500		-
Purchased Services	584		-
Depreciation Expense	6,000		-
Other Expenses	11,665		-
Total Operating Expenses	74,632		-
Total Clinical Expenses	669,769		-
Net Clinical Income(Loss)	6,344		-
Revenue Assumptions: Patient Visits will increase by 3 percent Gross Charges per Visit will Increase by 1 percent Collection Percentage will be 44.8 percent Other Revenue will increase by 5 percent Expense Assumptions: Clinical Physician Compensation will grow at the same percentage as Total Revenue growth. Clinical and Non-Clinical Staff Team sizes will not change, but their compensation will receive an annual merit increase of 2.5 percent. Coding/Charge Entry costs will increase at the same percentage as gross charges growth. Supplies, Purchased Services, Malpractice, and Other Expenses are all variable costs that fluctuate at the same percentage growth as Patient Visits Depreciation is straight-line, and no assets were added or retired from prior year. Your rental agreements have a 4 percent increase scheduled to begin at the start of this year. Reflection Questions: Summarize the overall financial performance of this clinic in the new year's budget, in comparison to the prior year's actual results. Upon completion of your draft budget, is there any additional information, beyond the provided assumptions listed above, that you would try to gather to help you to build a stronger and more thoughtful budget? If given full access to this clinic's financial history and market data, what additional analytics would you perform to validate that the provided assumptions are reasonable for the budget construction?