Organisational Management in Health Care

This article discusses cash budget preparation, loan amount calculation, and profit calculation for a surgery center. It also provides expert advice on pricing and costing structure. The subject is Organisational Management in Health Care, and the course code and college/university are not mentioned.

Running head: ORGANISATIONAL MANAGEMENT IN HEALTH CARE
Organisational Management in Health Care
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Question 1:.................................................................................................................................2
a. Preparing the cash budget for January to March:...................................................................2
b. Depicting the amount loan needed for the new equipment with a bank balance of 8,500:. . .3
c. Depicting the amount loan needed for the new equipment with a bank balance of 8,500
when revenues changed:............................................................................................................3
d. Depicting the report for Bondi Junction Medical Centre concerning all the cash flow
situation:.....................................................................................................................................5
Question 2:.................................................................................................................................5
a. Depicting the profit or loss is expected for the Surgery Centre for the month of June 2018:5
b. Depicting the procedures needed for making a profit of 20,000 minimum, while providing
advice on current pricing and costing structure of the Centre:..................................................6
References:.................................................................................................................................8

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Question 1:
a. Preparing the cash budget for January to March:
Particulars January February March
Cash Income
Bulk-billed patients $ 24000 $ 31200 $ 28800
Non-bulk-billed patients $ 22200 $ 23700 $ 26400
Non-Medicare patients $ 16500 $ 15000 $ 19500
Total Cash Income $ 62700 $ 69900 $ 74700
Cash outgoing
Salaries
Receptionists $ 6,000 $ 6,000 $ 6,000
Doctors $ 12,000 $ 12,000 $ 12,000
$ 18,000 $ 18,000 $ 18,000
Operating expenses
mortgage repayments $ 3,000 $ 3,000 $ 3,000
Insurance $ 5,000 $ - $ -
Cleaning and cost centre $ 500 $
500
$ 500
Other expense $ 100 $
100
$ 100
phone bill $ 1,500 $ - $ -
electricity bill $ - $ 2,500 $ -
Mobile plans $ 300 $
300
$ 300
Car lease $ 10,000 $ 10,000 $ 10,000

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Motor vehicle running cost $ 1,000 $ 1,000 $ 1,000
New medical and office
equipment
$ - $ 85,000 $ -
$ 21,400 $ 102,400 $ 14,900
Total Cash outgoing $ 39,400 $ 120,400 $ 32,900
Monthly Cash Balance $ 8500 $ 31,800 $ (18,700)
Closing balance $ 31,800 $ (18,700) $ 23,100
b. Depicting the amount loan needed for the new equipment with a bank balance of
8,500:
From the relevant calculation of the budget it could be identified that minimum $
27,200 will be required as loan for purchasing the equipment’s. The calculation mainly
depicts that the closing balance for the period of February is mainly at the level of -$ 18,700,
while minimum monthly cash balance needs to ben at the levels of $ 8500. This relevantly
makes the minimum loan amount at the levels of $ 27,200 is needed by Bondi Junction
Medical Centre.
c. Depicting the amount loan needed for the new equipment with a bank balance of
8,500 when revenues changed:
Particulars January February March
Cash Income
Bulk-billed patients $ 24000 $ 31200 $ 28800
Bulk-billed patients $ 12000 $ 15600 $ 14400
Non-Medicare patients $ 16500 $ 15000 $ 19500

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Total Cash Income $ 52500 $ 61800 $ 62700
Cash outgoing
Salaries
Receptionists $
6,000
$ 6,000 $ 6,000
Doctors $
12,000
$ 12,000 $ 12,000
$
18,000
$ 18,000 $ 18,000
Operating expenses
mortgage repayments $ 3,000 $ 3,000 $ 3,000
Insurance $ 5,000 $ - $ -
Cleaning and cost centre $ 500 $ 500 $ 500
Other expense $ 100 $ 100 $ 100
phone bill $ 1,500 $ - $ -
electricity bill $ - $ 2,500 $ -
Mobile plans $ 300 $ 300 $ 300
Car lease $ 10,000 $ 10,000 $ 10,000
Motor vehicle running cost $ 1,000 $ 1,000 $ 1,000
New medical and office
equipment
$ - $ 85,000 $ -
$ 21,400 $ 102,400 $ 14,900
Total Cash outgoing $ 39,400 $ 120,400 $ 32,900
Monthly Cash Balance $ 8500 $ 21,600 $ (37,000)
Closing balance $ 21,600 $ (37,000) $ (7,200)

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The above table represents the changes in calculation, which needs to be conducted by
Bondi Junction Medical Centre for increasing its competitiveness in the market. Therefore,
the overall income of Bondi Junction Medical Centre will decline, which increases the
amount of loan required for the purchase of the new equipment. Therefore, under the current
circumstances Bondi Junction Medical Centre will require a loan of $ 45,500 to replenish the
negative closing balance and maintain $ 8,500 in the monthly cash balance.
d. Depicting the report for Bondi Junction Medical Centre concerning all the cash flow
situation:
After analysis the calculation of three-month budget, it could be identified that the
management will require loan for purchasing the equipment. Under normal circumstance the
loan amount will be at the level of $ 27,200 taken during the period of February, as the
closing balance is negative. Furtherer, analysis on the new GP practice is conducted, which is
directly affecting the revenue stream of the medical centre. The combined revenue of the
centre has fallen for each month forcing the closing balance to decline and become negative.
Thus, under the adverse circumstance the overall loan amount for the new machine to be
purchased by the medial centre and having a monthly closing balance of $ 8,500 is at the
levels of $ 45,500. The financial future of the centre is relatively high, where adequate
adjustment to the costing needs to be conducted for increasing its competitiveness and
maximise the profits generated from operations (Gopee and Galloway 2017).
Question 2:
a. Depicting the profit or loss is expected for the Surgery Centre for the month of June
2018:
Particulars Units Charges Supplies

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Procedure 1 40 4000 800
Procedure 2 40 5000 3500
Total Procedure 80 9000
Budget
Revenue $ 360,000
Expenses
Doctors’ Fees $ -
Surgical Supplies $ 172,000
Salaries $ 20,500
Occupancy costs $ 18,200
Communication $ 1,200
Total Expenses $ 211,900
Net Cash Flow (Profit) $ 148,100
b. Depicting the procedures needed for making a profit of 20,000 minimum, while
providing advice on current pricing and costing structure of the Centre:
The difference in actual figures and budgeted figures is due to the accounts used in
calculating the statement. The difference in profit is due to the anticipation of cost incurred
by the centre during the period. The expenses related to occupancy cost, communication and
equipment incurred during June have relevantly increased than the anticipated expense. The

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number of procedures also declined for the period, which is also the main reason behind the
decline in cash flow of the centre.
Particulars Units Charges Supplies
Procedure 1 70 4000 1000
Procedure 2 71 5000 3600
Total Procedure 141 9000
Altered Budget
Revenue $ 635,000
Expenses
Doctors’ Fees $ -
Surgical Supplies $ 325,600
Salaries $ 20,500
Occupancy costs $ 24,000
Communication $ 4,200
Equipment $ 240,000
Total Expenses $ 614,300
Net Cash Flow $ 20,700
The overall profit of 20,000 can be accumulated by the centre when procedures 1
needs 70 units and procedures 2 needs units 71 units. Therefore, with the 141 procedures
under both procedure 1 and 2 the net profit will be at the level of 20,700. The current pricing
structure of needs to be improved, which might help in minimising the level of expenses and

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improving profits for the Centre. The Centre should focus its activities in procedures 1, as it
has the lowest surgical supplies and helps in increasing profits for the Centre (Zingg et al.
2015).

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References:
Gopee, N. and Galloway, J., 2017. Leadership and management in healthcare. Sage.
Zingg, W., Holmes, A., Dettenkofer, M., Goetting, T., Secci, F., Clack, L., Allegranzi, B.,
Magiorakos, A.P. and Pittet, D., 2015. Hospital organisation, management, and structure for
prevention of health-care-associated infection: a systematic review and expert consensus. The
Lancet Infectious Diseases, 15(2), pp.212-224.