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Medical Practice Budgets

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

Solution Summary

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