Using exhibit 10.6 as an example , construct line-item, program, and performance budgets for a service or program in a health care organization

ITIONAL APPROACHES TO BUDGETING VHIBIT 10.6 SUMMARY ZERO-BASED BUDGET 475 Crown Colony Westover Family Practice Parkland Affiliates $36,800 115,200 152,000 $58,625 201,000 259,625 Practice revenues Initial services Follow-up services mus $28,350 Total 91,350 119,700 Practice expenses Labor expenses 000 162,082 Total 162,082 Hospitalist practice net income (loss) (42,382) Hospital income Net inpatient revenues (loss). 189,000 Incremental financial impact of proposal $146,618 Performance measure: new admissions 900 202,603 202,603 (50,603) 330,563 330,563 (70,938) 235,750 $185,147 385,000 $314,062 1,750 1.150 Note: The budgets for each practice separately are considered line-item budgets. The three budgets presented altogether or in other combinations constitute a program budget. Finally, when performance targets are added to a line-item budget, it becomes a performance budget. 619 sonson ITIONAL APPROACHES TO BUDGETING VHIBIT 10.6 SUMMARY ZERO-BASED BUDGET 475 Crown Colony Westover Family Practice Parkland Affiliates $36,800 115,200 152,000 $58,625 201,000 259,625 Practice revenues Initial services Follow-up services mus $28,350 Total 91,350 119,700 Practice expenses Labor expenses 000 162,082 Total 162,082 Hospitalist practice net income (loss) (42,382) Hospital income Net inpatient revenues (loss). 189,000 Incremental financial impact of proposal $146,618 Performance measure: new admissions 900 202,603 202,603 (50,603) 330,563 330,563 (70,938) 235,750 $185,147 385,000 $314,062 1,750 1.150 Note: The budgets for each practice separately are considered line-item budgets. The three budgets presented altogether or in other combinations constitute a program budget. Finally, when performance targets are added to a line-item budget, it becomes a performance budget. 619 sonson