Budget & Breakeven Analysis of Orthopaedics at Nepean Hospital

This report presents a detailed budget and breakeven analysis for the Orthopaedics department of Nepean Private Hospital. The analysis covers various aspects of the department's financial operations, including staffing costs (orthopaedic surgeons, nurses, and ward staff), consumable expenses (surgical instruments, cotton, medicine), utility costs, administrative expenses, and depreciation. Revenue projections are based on income from consultancy services, joint replacement surgeries, and other surgeries. The report calculates the total income, total costs, and profit/loss, and determines the breakeven point for the department. Assumptions regarding operating hours, staff remuneration, patient volumes, and service charges are clearly stated. The analysis indicates whether the department is operating at a profit or loss, providing crucial insights for financial management and decision-making.

Running head: HEALTH FINANCIAL MANAGEMENT
Health Financial Management
Name of the Student:
Name of the University:
Author’s Note:

1HEALTH FINANCIAL MANAGEMENT
Table of Contents
Introduction:...............................................................................................................................2
Budget and Breakeven Analysis:...............................................................................................2
References:.................................................................................................................................4

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Introduction:
For a budget and breakeven analysis in this part of the assignment the Orthopaedics
department of Nepean Private Hospital has been selected. The orthopaedics department of the
hospital provides various orthopaedic services including joint replacement surgery and sports
injury surgery. In the following parts, a detailed budget analysis has been performed for the
department showing the expenses and incomes of the department.
Budget and Breakeven Analysis:
Expenses Income
Category Item/Costs Formula Calculation Explanatory Notes Category Product/Service Formula Calculation Explanatory Notes
Staffing Orthopaedic Surgeon 5*200*8*5*52 $ 2,080,000.00 This cost holds the consultancy Income Consultancy 1*20*5*52*500 $ 2,600,000.00
Nurse 10*40*8*5*52 $ 848,000.00 Joint replacement surgery 1*10*5*52*10000 $ 26,000,000.00
Wardener 10*25*8*5*52 $ 520,000.00 Other surgery 6*25*5*52*500 $ 19,500,000.00
On costs total cost of staff above x 15% $ 517,200.00 TOTAL INCOME Insert total amount here -> $ 48,100,000.00
TOTAL STAFFING Insert total amount here -> $ 3,965,200.00
Consumables Surgical Instrument (10*4*20*5*52)*130 $ 27,040,000.00 Break Even Calculation
Cotton (20*10*20*5*52)*10 $ 10,400,000.00 TOTAL INCOME $ 48,100,000.00
Medicine (5*5*20*5*52)*25 $ 3,250,000.00 minus TOTAL COSTS PER YEAR $ 46,792,200.00
others (3*4*20*5*52)*5 $ 312,000.00 Profit / Loss $ 1,307,800.00
TOTAL CONSUMABLES Insert total amount here -> $ 41,002,000.00
Utilities Fooding (20*5*35)*52 $ 182,000.00 If the Profit/Loss row is NEGATIVE, your service is LOSING MONEY. Increase your income.
Hotel Expenditure (20*5*60)*52 $ 312,000.00
Misc. (20*5*20)*52 $ 104,000.00
TOTAL UTILITIES Insert total amount here -> $ 598,000.00
Administration Management Staff Salaries 10000*52 $ 624,000.00
Security and maintance 4000*52 $ 208,000.00
Office Expenses 250*52 $ 13,000.00
Building Rent 3500*52 $ 182,000.00
TOTAL UTILITIES Insert total amount here -> $ 1,027,000.00
Depreciation Depreciation 1000000*20% $ 200,000.00
TOTAL DEPRECIATION Insert total amount here -> $ 200,000.00
It has been assumed for the analysis that, the department will be operating for 8hours
in a day and 5 day in a week for total of 52 weeks in a year. All the staffs would be paid on
the basis of such assumption (Farber 2014). For the operation of the orthopaedic department
5 orthopaedic surgeons will be required and they will be paid $200 per hour as remuneration.
In addition, there will be 10 nurses who would be paid $40 per hour, and for maintenance of
the other purposes 10 ward staffs would be there with an hourly pay of $25.
The cost of consumables has been calculated on the basis of number of patients in a
week and rates have been considered from recent market sources and best assumptions. It is
also assumed that there would be one management staff paying a salary of $12,000 per week
and a security staff paying $4,000 per week. Further, there would be $250 estimated office
expenses per week and $3,500 rent per week for the building (Farber 2014).

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On the revenue side, it has been assumed that there would be on an average 20
patients per week for consultancy services charging $500 per patient, 10 joint replacement
surgery patient charging $10,000 per surgery and 25 patients for other minor surgeries for a
fees of $500 per surgery.

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References:
Doye, D. G., & Sahs, R. (2016). Using Enterprise Budgets in Farm Financial Planning.
Farber, D. A. (2014). Breaking Bad: The Uneasy Case for Regulatory Breakeven
Analysis. Cal. L. Rev., 102, 1469.
Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. PHI Learning.
Klychova, G. S., Zakirova, A. R., Zakirov, Z. R., & Valieva, G. R. (2015). Management
aspects of production cost accounting in horse breeding. Asian Social Science, 11(11),
308.