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    Case Analysis - Rosemont Hill Health Center - V3

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    thearpan
    This document summarizes the costs associated with different departments at a hospital in 1975. It shows the number of patient visits, salaries, other expenses, and total expenses for each department. It then calculates the costs for each department more accurately by redistributing salaries of nurses and social workers who served multiple departments. The corrected costs show the family planning department's cost per patient was $4.82, rather than the $11 shown previously. It estimates the family planning department is bearing additional costs of $6 per patient for other departments like pediatrics and adult medicine.

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    © All Rights Reserved
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    Case Analysis - Rosemont Hill Health Center - V3

    Uploaded by

    thearpan
    3K views8 pages
    This document summarizes the costs associated with different departments at a hospital in 1975. It shows the number of patient visits, salaries, other expenses, and total expenses for each department. It then calculates the costs for each department more accurately by redistributing salaries of nurses and social workers who served multiple departments. The corrected costs show the family planning department's cost per patient was $4.82, rather than the $11 shown previously. It estimates the family planning department is bearing additional costs of $6 per patient for other departments like pediatrics and adult medicine.

    Original Description:

    Rosemont Hill Health Center

    Original Title

    Case Analysis_Rosemont Hill Health Center_V3

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    This document summarizes the costs associated with different departments at a hospital in 1975. It shows the number of patient visits, salaries, other expenses, and total expenses for each department. It then calculates the costs for each department more accurately by redistributing salaries of nurses and social workers who served multiple departments. The corrected costs show the family planning department's cost per patient was $4.82, rather than the $11 shown previously. It estimates the family planning department is bearing additional costs of $6 per patient for other departments like pediatrics and adult medicine.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    3K views8 pages

    Case Analysis - Rosemont Hill Health Center - V3

    Uploaded by

    thearpan
    This document summarizes the costs associated with different departments at a hospital in 1975. It shows the number of patient visits, salaries, other expenses, and total expenses for each department. It then calculates the costs for each department more accurately by redistributing salaries of nurses and social workers who served multiple departments. The corrected costs show the family planning department's cost per patient was $4.82, rather than the $11 shown previously. It estimates the family planning department is bearing additional costs of $6 per patient for other departments like pediatrics and adult medicine.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 8
    At a glance
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    The document discusses changing the hospital's cost accounting method to more accurately calculate the costs per department on a per patient basis. The old method overestimated costs for some departments.

    The new method more accurately accounts for salaries and expenses that are shared between departments, lowering the calculated per patient costs for some departments like Family Planning. It also distributes shared administrative costs proportionally based on factors like space used and patients seen.

    The departments that see an increase in their per patient costs according to the new method are Pediatrics, Adult Medicine, Mental Health, and Social Services.

    Department No.

    of patient visits Salary ($) Other ($) Given


    total
    Department
    Floor Space
    (sq. feet)
    Lab usage
    (hours/year)
    Pediatrics 5000 20000 8000 28000 Pediatrics 1000 1000
    Family planning 10000 5000 15000 20000 Family planning 1300 200
    Adult medicine 2100 30000 16000 46000 Adult medicine 1800 2400
    Nursing 4000 27000 6000 33000 Nursing 300 100
    Mental Health 1400 15000 8000 23000 Mental Health 1000 0
    Social services 1500 32000 8000 40000 Social services 500 0
    Community health 2500 5000 10000 15000 Community health 1100 100
    Dental 6400 20000 10000 30000 Dental 1000 200
    Subtotal 32900 154000 235000 8000
    Admistration 38000 2000 40000 Adminstration 500 0
    Rent 36000 36000 Record keeping 300 0
    Utilities 10000 10000 Laboratory 1200 0
    Laboratory work 16000 9000 25000 10000 4000
    Cleaning 6000 6000
    Record keeping 7000 3000 10000
    Total 362000
    No of patients visits 32900
    Avg cost per visit 11
    Calculation backup
    Total Patients
    Attended
    10000
    Salary expense 5000
    Salary Cost taken
    from Nursing
    department
    4500
    Salary Cost taken
    from Social Service
    department
    4965
    12000 divided in ratio of no. of
    patients(10000/(32900-1500)*12000) + (8000/7)
    Total Salary expense 14465
    Otherexpense 15000
    Exibit 2 : Cost & patient visits in 1975 Exibit 3 ; Floor Space & lab usage by department
    FOR THE FAMILY PLANNING DEPARTMENT
    2 MSW's social workers divide their 50% of their
    salary($12000) in ratio of number of patients & one BA
    social worker divides his salary($8000) evenly in 7
    departments (except dental)
    1 nurse salary ($9000)Distributed between Family
    planning($4500) & Pediatrics($4500) evenly
    REMARKS
    Other expense taken
    from Nursing
    department
    1000
    Other expense taken
    from Social Service
    department
    1241
    3000 divided in ratio of no. of patients(10000/(32900-
    1500))*3000 + (2000/7)
    Total Other expense 17241
    Total Salary + other
    expenses
    31706
    ADMINISTRATIVE
    COST: 3757 (14465/154000)*40000
    RENT 5850 (1300/8000)*36000
    UTILITIES +
    CLEANING 2600 (1300/8000) )*(10000+6000)
    LAB WORK
    1250
    (No. of hours x lab people salary/hour ) + (Other cost
    X % lab time consumed)
    4X200 + (200/4000)*9000
    RECORD KEEPING 3040 (10000/329000) *10000
    EFFECTIVE COST 48203
    TOTAL PATIENTS: 10000
    EFFECTIVE COST PER
    PATIENT 4.82
    CONCLUSION: As per new cost accounting method, Cost of Family planning department is $4.82 / Per patient.
    But as per current cost accounting method Avg cost per patient for family planing department is shown as 11$.
    Our earlier cost 110000
    Extra cost of other
    departments that
    we are bearing 61797
    So, we are bearing additional cost (6$ per patient) of Pedatrics,Adult medicine, Mental Health,Social services & Community health deapartments.
    Calculation
    Old given cost - new
    calculated cost
    (=110000-48203)
    Other expense of 1 nurse ($2000)Distributed between
    Family planning($1000) & Pediatrics($1000) evenly
    2 MSW's social workers divide their 50% of their other
    expense($3000) in ratio of number of patients & one BA
    social worker divides his other expense($2000) evenly in
    7 departments (except dental)
    RATIO OF SALARIES
    SQUARE FOOT BASIS
    SQUARE FOOT BASIS
    HOUR BASIS
    RATIO OF PATIENTS
    Distribution of our
    extra cost among
    other departments
    Ratio of per patient
    cost
    Departments Per patient cost of departments incurring more than
    $11/per patient cost
    Per patient EXTRA
    cost of
    departments
    incurring more
    than $11/per
    patient cost ( Per
    patient cost - $11)
    Pediatrics 768 Pediatrics 11.7 0.7
    Adult medicine 39186 Adult medicine 46.7 35.7
    Mental health 16465 Mental health 26 15
    Social services 5159 Social services 15.7 4.7
    Community health 220 Community health 11.2 0.2
    Total sum 111.3 56.3
    (=0.2/56.3 * 61797)
    Calculation (Remarks)
    (=0.7/56.3 * 61797)
    (=35.7/56.3 * 61797)
    (=15/56.3 * 61797)
    (=4.7/56.3 * 61797)
    11.7
    4.8
    46.4
    5.3
    26.0
    15.7
    11.2
    7.6
    0.0
    5.0
    10.0
    15.0
    20.0
    25.0
    30.0
    35.0
    40.0
    45.0
    50.0
    C
    o
    s
    t

    p
    e
    r

    p
    a
    t
    i
    e
    n
    t
    s

    Departments
    Cost per patient
    Cost per patient
    Department No. of patient visits Salary ($) Other ($) Given total expense ($)
    (Salary+Others)
    Salary change due to
    nurses serving for other
    departments
    Salary change due to
    Social workers serving for
    other departments
    Corrected salary Other expenses due to
    change in nurses working
    for other departements
    Other expense change due
    to social workers
    Pediatrics 5000 20000 8000 28000 4500 3054 27554 1000 763
    Family planning 10000 5000 15000 20000 4500 4965 14465 1000 1241
    Adult medicine 2100 30000 16000 46000 9000 1945 40945 2000 486
    Nursing 4000 27000 6000 33000 -18000 2672 11672 -4000 668
    Mental Health 1400 15000 8000 23000 0 1678 16678 0 419
    Social services 1500 32000 8000 40000 0 -18857 13143 0 -4714
    Community health 2500 5000 10000 15000 0 2098 7098 0 525
    Dental 6400 20000 10000 30000 0 2446 22446 0 611
    Subtotal 32900 154000 235000 154000
    Admistration 38000 2000 40000
    Rent 36000 36000
    Utilities 10000 10000
    Laboratory work 16000 9000 25000
    Cleaning 6000 6000
    Record keeping 7000 3000 10000
    Total 362000
    No of patients visits 32900
    Avg cost per visit 11
    Department
    Floor Space
    (sq. feet)
    Lab usage
    (hours/year)
    Pediatrics 1000 1000
    Family planning 1300 200
    Adult medicine 1800 2400
    Nursing 300 100
    Mental Health 1000 0
    Social services 500 0
    Community health 1100 100
    Dental 1000 200
    8000
    Adminstration 500 0
    Record keeping 300 0
    Laboratory 1200 0
    10000 4000
    Rate of people working in
    lab ($/hour) 4
    Exibit 3 ; Floor Space & lab usage by department
    Exibit 2 : Cost & patient visits in 1975 Expenses
    11.7
    4.8
    46.4
    5.3
    26.0
    15.7
    11.2
    0.0
    5.0
    10.0
    15.0
    20.0
    25.0
    30.0
    35.0
    40.0
    45.0
    50.0
    Pediatrics Family
    planning
    Adult
    medicine
    Nursing Mental
    Health
    Social
    services
    Community
    health
    C
    o
    s
    t

    p
    e
    r
    p
    a
    t
    i
    e
    n
    t
    s

    Departments
    Cost per patient
    Corrected Other expense Corrected total expense
    (Corrected Salary +
    corrected other expense)
    Adminstration ($)
    (% salary X
    Adminstration expense)
    Rent ($)
    (% sq ft X total rent)
    Utilities +Cleaning ($)
    (% sq ft X Utility
    expense)
    Recordkeeping ($)
    (% patients X
    recordkeeping expense)
    Department wise
    Laboratory expense
    ($)
    (No. of hours x lab
    people salary/hour ) +
    (Other cost X % lab
    time consumed)
    Actual
    total
    customer
    service
    departme
    ntal
    expense
    Average actual
    cost per visit
    ($)
    (actual total
    expense / No
    of patients)
    Charge per patient($)
    (Revenue / no. of
    patients)
    9763 37317 7157 4500 2000 1520 6250 58744 11.7 10.5
    17241 31706 3757 5850 2600 3040 1250 48202 4.8 10.5
    18486 59432 10635 8100 3600 638 15000 97405 46.4 10.5
    2668 14339 3032 1350 600 1216 625 21162 5.3 10.5
    8419 25097 4332 4500 2000 426 0 36355 26.0 10.5
    3286 16429 3414 2250 1000 456 0 23548 15.7 10.5
    10525 17623 1844 4950 2200 760 625 28001 11.2 10.5
    10611 33057 5830 4500 2000 1945 1250 48583 7.6 10.5
    235000 40000 36000 16000 10000 25000 362000
    1800 0
    4320 0
    1080 0
    Pediatrics
    9%
    Family planning
    4%
    Adult
    medicine
    36%
    Nursing
    4%
    Mental
    Health
    20%
    Social services
    12%
    Community
    health
    9%
    Dental
    6%
    Expense-department wise (Average
    actual cost per visit)
    Nursing
    12%
    Mental Health
    4%
    Social services
    5%
    Community
    health
    8%
    Dental
    20%
    Revenue - department wise
    11.2
    7.6
    Community
    health
    Dental
    Cost per patient

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