You are a consultant to Phoebe Putney Hospital in Southern Georgia. You have the financial reports along
Question:
You are a consultant to Phoebe Putney Hospital in Southern Georgia. You have the financial reports along with some additional data that you are reviewing in order to provide some recommendations for the hospital moving forward. As part of your analysis, you will be comparing the performance of Phoebe Putney to the median results as published by Becker’s Hospital Review (Becker's CFO Report).
As part of your report, you are to complete the following:
1.Calculate the following financial ratio calculations for 2015 and 2016: (4 points each)Current Ratio
a. Accounts Receivable Turnover (DAR)
b. Days Cash on Hand (subtract depreciation and amortization from operating expenses to get cash operating expenses)
c. Payment Turnover--current liabilities ÷ (total operating expenses/365)
d. Operating Margin
2.In addition you are to calculate the following:
a. Net income(loss) per patient day for 2016 (Remember that the monetary figures are listed in thousands, but the patient days are actual) (4)
2016
Total Discharges: 17,730
Total Patient Days: 101,142
b. Percentage of net patient revenue for 2016 for (2 points each)
a) Medicare and Medicaid (combined)
b) Third party payers
c)Self pay patients
3.Once you have performed the calculations you are to comment on the findings. Include in your response the answers to the following (you are not limited to these, they are just to get you started): (100 points)
a. Is there a downward or upward trend from one year to the next based on your calculations? Why did that happen?
b. How do they compare to the industry overall?
c. How does their payer mix compare to the national mix as provided in Week 2 supplemental materials (The Healthcare Dollar—Where It Came From).
d. Provide 3-4 recommendations that you will make for the administration of Phoebe Putney moving forward. Make sure that those recommendations are realistic and viable.
4. Place your answers on the answer sheet provided with the assignment (see blackboard weekly materials week 3). Show your work for the calculations.
Phoebe Putney Answer Key
Ratio Analysis | |||||
2016 | Formula in Numbers | 2015 | Formula in Numbers | Becker Comparison | |
Current Ratio | |||||
Accounts Receivable Turnover (DAR) | |||||
Days Cash on Hand | |||||
Payment turnover | |||||
Operating Margin |
Net Income (Loss) per patient day 2016: |
Payer Mix | |||||
2016 | Formula in Numbers | 2015 | Formula in Numbers | National Mix | |
Medicare/Medicaid | |||||
Third Party Payers | |||||
Self Pay |
Below is the PHOEBE PUTNEY MEMORIAL HOSPITAL, INC. BALANCE SHEETS, July 31, 2016 and 2015
https://drive.google.com/file/d/0B8PxniSyye0fMUFFZWVVWUxuamc/view
http://www.beckershospitalreview.com/finance/65-financial-benchmarks-for-hospital-executives-022117.html
International Business The Challenge of Global Competition
ISBN: 978-0077606121
13th edition
Authors: Donald Geringer Ball, J. Michael Geringer, Jeanne M. McNett, Michael S. Minor