Flexible Budgeting 1. Rostom Hospital is building a budget for the next fiscal y
ID: 2788350 • Letter: F
Question
Flexible Budgeting
1. Rostom Hospital is building a budget for the next fiscal year. All patients fall into three DRGs, DRG 129, Major head and neck procedures (DRG weight = 2.3284), 243, Cardiac pacemaker implant (2.6695), and 935, Non-extensive burns (1.4717). The expected volumes for November 2017 are 50 patients in DRG 129, 30 in 243, and 20 in 935. Only two services are provided, nursing and radiology. Nursing bases its budget on patient days and radiology bases its budget on x-ray RVUs (relative value units). Build the monthly budget for both departments information below.
Budgeted
DRG Patients ALOS Pat. Days RVUs per case Total RVUs
129 50 5.4 _______ 5.0 _______
243 30 4.5 _______ 4.0 _______
935 20 5.0 _______ 2.0 _______
Total _______ _______
Nursing Budget Radiology Budget
Fixed Labor $4,000/mo _______ $10,000/mo _______
Variable Labor $100/day _______ $30/RVU _______
Supplies $24/day _______ $18/RVU _______
Depreciation $20,000/mo _______ $10,000/mo _______
Prof. Fees -0- __0 ___ $40/RVU _______
Total _______ _______
Explanation / Answer
a b c=a*b d e=a*d DRG Patients ALOS pat days RVUs per case Total RVUs 129 50 5.4 270 5 250 243 30 4.5 135 4 120 935 20 5 100 2 40 Total 505 410 Monthly budget: Nursing Radiology Fixed labor 4,000 10,000 Variable labor 50,500 [100*505] 12,300 [30*410] Supplies 12,120 [24*505] 7,380 [18*410] Depreciation 20,000 10,000 Prof fees - 16,400 [40*410] Total 86,620 56,080
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