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    Medical Practice Budgets

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    Creating a Budget

    Various budget approaches play an important role in resource allocation in human service organizations. You are the medical clinic administrator for three physician group clinics and you are preparing a budget matrix to be presented to the physicians. The matrix budget consists of line-item, functional, and program budgets.

    Operating Expenses:
    Rent: $12 per square foot; practice office space is 2,500 SF
    Malpractice insurance: $20,000 per physician, per year
    Utilities $3,000 per month
    Office supplies $1,500 per month
    Equipment/lease $700 per month
    Miscellaneous $200 per month
    Personnel expenses:
    Physician salary (3 physicians) $200,000.00 Per physician
    Administrator $ 50,000.00 FTE (full-time employee)
    Insurance Coordinator $ 35,000.00 FTE
    Nurse (3 full-time nurses) $ 45,000.00 FTE
    Front office staff (3 full-time staff) $ 25,000.00 FTE
    Benefits are calculated at 21% of base salary

    Number of annual patient visits: 30,000

    Use the information above to create each of the following:

    1. A line-item budget table showing the cost for personnel, including all salaries and benefits
    2. A functional budget to calculate personnel costs per patient visit
    3. A total program budget for providing healthcare services for 30,000 patient visits

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    Solution Summary

    The solution designs a line item, functional, and program budgets for a medical practice.