NUR 4327 – Deliverable 3 – Financial Forecasting Memo

NUR 4327 – Deliverable 3 – Financial Forecasting Memo

Payer mix is a reference to patients with government and health plan percentages, such as Medicare or Medicaid, compared to commercial or private insurance. Commercial and private insurance are responsible for a higher rate than government-issued insurance. The projected revenue in the Financial Forecasting Memo shows that the prior year’s revenue was 7,525,122, and the new year’s projection is 7,414,948. This change in the payer mix will reduce revenue for the new year by 110,174.

The financial impact of the changing payer mix shows decreases projected by the new year. Although the patient count has increased by 40, government insurance has risen significantly while private insurance has lowered. The rise in government insurance means the facility receives less money per patient due to lower government rates. The private insurance companies are not enough to make up the difference in the payer gap. Medicaid and Medicare expansions negatively affect hospitals due to the payment rate gap, although patient intake goes up (Freedman et al., 2017).

NUR 4327 – Deliverable 3 – Financial Forecasting Memo

When it comes to cutting expenses in healthcare settings, it is important to ensure that the quality of care, patient satisfaction, and staff progress are not affected. Recommendations would include reducing waste, including medications and materials. Budget meetings with high-spending departments to go over limitations and ways to reduce costs. Staffing schedules are a common way to reduce expenses. Provide adequate schedules for staff to fit their hours without lapsing into overtime (Drake,2020).

References

Drake, K. (2020). Staffing during budget cuts. Nursing Management, 51(3), 56.
https://doi.org/10.1097/01.NUMA.0000654868.04675.61

Freedman, S., Nikpay, S., Carroll, A., & Simon, K. (2017). Changes in inpatient payer-mix and
hospitalizations following Medicaid expansion: Evidence from all-capture hospital discharge
data. PLoS ONE, 12(9), 1–9. https://doi.org/10.1371/journal.pone.0183616

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NUR 4327 – Deliverable 3 – Financial Forecasting Memo

The nurse manager in orthopedics has asked for your assistance with a finance project. She is being asked to estimate revenue for the next fiscal year based on the projected number of hip replacements increasing from 300 this year to 340 next year.

NUR 4327 – Deliverable 3 – Financial Forecasting Memo

The nurse manager must also factor in the expected changes in sources of revenue by the payer. The hospital is estimated to lose some contracted insurers due to local competition and see increased Medicare and Medicaid patients due to area demographics and economic conditions. She has provided you with the numbers from this year’s budget and the projections on numbers and payment amounts for next year.

 Instructions

formulate a financial forecasting memo to your nurse manager that:

Part One – Financial Forecasting Model

·      Contains a completed financial forecasting model by downloading the Financial Forecasting Model to:

·      Calculate the income projected from each payer source and total for the year to compare next year’s revenue to this year’s revenue.

·      Provide your nurse manager with your estimates on the increase/ decrease in revenue for next year’s budgeting.

Part Two – Financial Forecasting Memo

·      Explains how the change in payer mix will impact the overall projected revenue of the unit.

·      Describes the financial impact of a changing payer mix.

·      Lists recommendations for the manager to consider in expenses so that the budget will balance as neutral.