A

Synopsis On

To Study the Hospital Financial Planning of

Baby Friend Hospital &critical Care Private Limited.

Under Supervision Of – Sonali Bagde

Submitted By

Name-Abhishek Nair

Masters In Business Administration

MBA (2017-2019)
Introduction –

Community members need to have a basic understanding of hospital

finance to evaluate a hospital’s charitable commitment to the health of their
community. Hospitals demonstrate this commitment by providing services
that address the community’s unfunded healthcare needs. These services,
often called community benefits, include charity care, health promotion,
prevention and screening programs, and a range of other services that
target those who otherwise would not have access to health care. For
people who face significant barriers to care as a result of social inequities
or lack of insurance, these services can be a lifeline and a last resort. In
some instances, a hospital may state that poor financial performance
prevents it from providing higher levels of charitable community benefits.
How does a person judge the accuracy of such a claim? Financial analysis
is one useful tool for measuring a hospital’s charitable commitment to the
community and determining whether this amount is reasonable or
sufficient. While this guide will not make you into a financial expert, it will
provide:

• Vocabulary to help you understand information about a hospital’s

financial performance;

• Tools that can be used to evaluate a hospital’s charitable commitment to

the community; and,

• Valuable tips on how groups can engage hospital leadership in

meaningful discussions of hospital financial performance.
Objectives-

1. Focus on quality and cost improvements will follow.

2. Don't isolate financial planning.

3. Adjust revenue cycle management for the new payer — patients.

4. Invest in experts to get the most out of your data.

5. Bring pharmacy in house to help control drug cost increases.

 RESEARCH METHODOLOGY

DEFINITION :

Research Methodology is the systematic analysis of the methods applied to

a study. The methodology may include publication research, interviews,
surveys and other research techniques, and could include both present and
historical information.

RESEARCH DESIGN

Research design is the plan, structure to answer whom, when, where

and how the subject is under investigation. Here plan is an outline of the
research scheme & which the researcher has to work. The structure of the
research is a more specific outline and the strategy out, specifying the
methods to be used in the connection & analysis of the data.

DESCRIPTIVE RESEARCH DESIGN

The type of research design used in this study is Descriptive research. The
main characteristics of this method is that the researcher has no control
over the variables and he can only report what has happened or what is
happening. This study of hospital financial planning provides us to
understand the various vulnerable charactertics of the payers, hospital
expenses, various income generated, and make the maximum output if the
income source to fulfill with the latest equipments to the patients

DATA COLLECTION

1. PRIMARY DATA: It is a finished data which is collected by you only. The

different way of collecting primary data is personal interview, questionnaire,
survey etc.

2. SECONDARY DATA: Secondary data is collected from already existing

sources in various organization broachers & records. Secondary data for
the study were collected from the magazines, websites & other previous
studies. To meet the objectives, the study used qualitative research. The
descriptive study was done through review literature that helped in
validation and extraction of the important variables and factors. Data was
collected from secondary sources. Secondary sources were magazines,
websites, books, office executives and company data. The main source of
information for this study is based on the data collection. Data collected is
secondary in nature.

Secondary data have been collected from official websites of baby friend
hospital and critical care centre private limited

Data analaysis

Sources of Hospital Financial Information

Audited Financial Statements Hospitals, like other businesses or

organizations, issue financial statements. Financial statements are reports
that show the type of financial actions an organization has taken and the
impact of these actions. For example, statements show where and when a
hospital’s money has been spent and whether the hospital is financially
successful. They answer questions such as: What is the financial picture of
the organization in any given year? How well did the hospital do during a
given period of years? Audited financial statements are prepared by an
independent auditing firm according to generally accepted accounting and
auditing principles. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made
by management, and evaluating the overall financial statement
presentation. There are three major financial statements:

• The income statement.

• The balance sheet.

• The cash flow statement.

Each statement has a distinct focus and use.

BALANCE SHEET EQUATION The Liabilities + Equity portion of the
balance sheet equation represents outsider and owner “claims against” the
total assets shown on the assets portion of the equation. The balance
sheet has two counterbalancing sections which form the balance sheet
equation:

Assets = Liabilities + Equity (or Net Assets)

RATIO Profitability Total Margin Operating Margin Markup Ratio Deductible

Ratio Liquidity Current Ratio Days Cash on Hand, Short-Term Sources
Only Days Cash on Hand, with Board Designated Investments Solvency
Equity Financing Cash Flow to Total Debt DEFINITION Revenues in
excess of expenses Total Revenues Net Operating Income Total Operating
Revenue (Gross Patient Service Revenue + Other Operating Revenue)
Total Operating Expense Contractual Allowance Gross Patient Service
Revenue Current Assets Current Liabilities Current Cash and Investments
(Other Operating Expenses/365) (Current Cash and Investments + Board-
Designated Investments) (Other Operating Expenses/365) Unrestricted Net
Assets Total Unrestricted Assets (Revenues in excess of Expenses +
Depreciation) (Total Current + Total Noncurrent Liabilities) WHAT IT
SHOWS Shows the percentage of revenues collected from central and
peripheral activities that is kept as profit. For example, a 5% Total Margin
means that for every $1.00 collected as revenue, $0.05 is kept as profit.
Shows the percentage of revenues collected from central activities that is
kept as profit. For example, a 3% Operating Margin means that for every
$1.00 collected of patient revenues, the hospital keeps $0.03 as profit.
Measures the percentage by which charges are increased above cost. For
example, if the hospital’s cost for providing a particular service was
$10,000 and they charged $15,000 for the service, they would have a
markup of 1.5. Measures the percentage discount that third-party payers
get, on average, from listed charges. For example, a 25% ratio would mean
that the average third-party payer received a 25% discount off listed
charges. Measures how many times the hospital is able to meet its short-
term obligations with short-term resources. A ratio of two would show that
the hospital could pay its current liabilities twice over. Illustrates the number
of days the hospital could continu
Questionnaire;-

• How much money does the hospital have?

• How does the hospital get its money?

• By providing medical services?

• By providing nonmedical services?

• Through donations from individuals, foundations, or the government?

• Through investments?
• What percentage of money comes from each of these sources?

• What does the hospital use the money for?

• How much cash has the hospital generated after meeting operating
expenses?

• What is the hospital’s investment strategy?

• What was the value of charity care provided to the community?

• What is the estimated value of a hospital’s tax exemptions?

• What internal and external factors affect the hospital’s financial