Financial Analysis of Patton-Fuller Community Hospital Essay

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Introduction

Patton-Fuller Community Hospital was established in 1975. Today, it is a for-profit hospital, the specialists of which are oriented to providing high-quality medical care. Thus, the focus is on increasing the hospital’s profitability and on improving the quality of patient care to gain more revenues. The quality of the care depends on effective staffing decisions.

To understand the perspectives for the future financial growth of the hospital, it is important to analyze how raises in wages and changes in the ratio of nurses to patients can influence staffing and performance. Thus, it is necessary to compare the financial data of 2008 and 2009, analyze the effects of the 2010 budget assumptions, and refer to the trend analysis while discussing the staff question at Patton-Fuller.

The Comparative Analysis of Data

While comparing the financial data of 2008 and 2009, it is possible to identify the increase in the net patient revenue by 9% in 2009. These results are significant because the rate of expenses is increased only by 3%. The comparison of the expenses related to the salaries and benefits demonstrates that the expenses in 2009 increased by more than $6,000. On the one hand, the increase can be discussed as insignificant in comparison with the changes in the net revenue.

On the other hand, an increase in the patient volume is not observed. As a result, raises in wages even in $1per hour can result not only in the improvement of the quality of patient care but also in inadequate increases in total expenses. As a result, the raises in wages cannot be discussed as one effective variant to cope with the decreased patient volume, but they are necessary to avoid the negative effects of the staff shortages on the organization’s profitability.

Referring to the changes in the nurse-to-patient ratio, it is possible to state that the shortage can become the reality that affects the quality of the patient care, and the task of the management is to keep the staff levels and follow the current nurse-to-patient ratio or focus on decreasing the number of patients for one nurse.

The Effects of the 2010 Budget Assumptions

The financial ratios associated with 2009 can be discussed as improved in comparison with the data of 2008. From this point, it is possible to predict further improvements for 2010. However, the increase in revenues is possible only if the question of the raises in the staff wages and the question of the nurse-to-patient ratio are resolved.

The increase of the wage is $1 per hour can be discussed as rather insignificant for the staff, but it can lead to significant increases in expenses. The positive effects of these changes are the possible increases in the staff’s job satisfaction and quality of patient care. The negative effects are the increases in costs of more than $600,000 per year.

If the changes in the nurse-to-patient ratio are realized, there are also positive and negative effects. The positive effects of decreasing the number of patients for one nurse are the decreases in nurse burnout and the increases in the quality of the patient care. However, it is also necessary to address the question of the nurse shortage and to correlate the number of patients with the expected number of nurses working at Patton-Fuller in 2010. The obvious negative effects of the changes are the decrease in the nurse workload which can lead to increasing the expenses. Thus, the expected increase in costs can be more than $4,700,000 per year.

The Use of a Trend Analysis to Plan Staffing

A trend analysis is necessary for a company to conclude about the paths to follow in the future while referring to the previous experience. Thus, Patton-Fuller should focus on collecting and analyzing the financial information and data related to the financial progress of the hospital. For instance, concentrating on such numbers as the net patient revenue in $418,509 in 2008 and $459,900 in 2009 and on total liabilities and equities in $548,535 in 2008 and $587,767 in 2009, it is possible to analyze the correlations and dependencies to predict the progress for the next years.

The trend analysis can be used to plan for staff and make decisions with the focus on the analysis of the financial data. Managers and economists of Patton-Fuller become able to analyze the differences in the assets, liabilities, revenues, and costs as well as the differences in the patient volumes. As a result, the minimal necessary number of nurses can be determined with references to the differences in data associated with the summer and winter months.

All the differences serve as the fundament to state whether it is necessary to increase the number of staff to address the shortage issue or whether it is possible to improve retention while focusing on the current nurse-to-patient ratio and the level of the employee’s job satisfaction.

Trend Analysis and the Comparative Analysis for Forecasting

Summarizing the trend analysis, it is possible to note that the raises in wages can result in increases in expenses without the obvious increase in revenues. The focus is on improving the quality of patient care and increasing employee job satisfaction without the actual decrease in costs.

Thus, the rise of wages in $1 per hour can be discussed as the significant change in the wage policy of Patton-Fuller. Furthermore, referring to the current trends and the identified pattern, it is possible to assume that the changes in the nurse-to-patient ratio can lead to increased costs as well as to the increased quality of patient care. The workload can be reduced by 20%.

The comparative analysis of the financial data and annual report can directly improve forecasting concerning Patton-Fuller because it is possible to predict the changes in numbers while focusing on the current revenues and expenses. That is why, the conclusions of the comparative analysis are used to decide which ratio can lead to nurse burnout, which raises in wages are adequate, and how the focus on the patient census can contribute to forecasting.

Conclusion

Having analyzed the financial data referred to 2008 and 2009, it is possible to state that the observed improvements in ratios in Patton-Fuller Community Hospital are not directly associated with the changes in staffing. However, any changes in the nurse-to-patient ratio or raises in wages can lead to positive and negative changes in the financial data. That is why the focus on the comparative analysis of the data and the discussion of the trend analysis is necessary to decide which decisions can be discussed as successful concerning the situation at Patton-Fuller.

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IvyPanda. (2022, April 13). Financial Analysis of Patton-Fuller Community Hospital. https://ivypanda.com/essays/financial-analysis-of-patton-fuller-community-hospital/

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IvyPanda. (2022) 'Financial Analysis of Patton-Fuller Community Hospital'. 13 April.

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IvyPanda. 2022. "Financial Analysis of Patton-Fuller Community Hospital." April 13, 2022. https://ivypanda.com/essays/financial-analysis-of-patton-fuller-community-hospital/.

1. IvyPanda. "Financial Analysis of Patton-Fuller Community Hospital." April 13, 2022. https://ivypanda.com/essays/financial-analysis-of-patton-fuller-community-hospital/.


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IvyPanda. "Financial Analysis of Patton-Fuller Community Hospital." April 13, 2022. https://ivypanda.com/essays/financial-analysis-of-patton-fuller-community-hospital/.

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