financial projections - finance.pdf · examples?-- volume-- across the board price change c....
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Financial Projections –
BASIC TRAINING
September 29, 2016
Bret Goebel
Bret Goebel Consulting
NMHA Financial Consultant
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prəˈjekSH(ə)n / noun
1. An estimate or forecast of a future situation or trend based
on a study of present ones.
“The budget is based on a projection of 8-months of actual
results.”
SYNONYMS: forecast, prediction, prognosis, outlook
expectation, estimate
2. The presentation of an image on a surface, especially a
movie screen.
“It would be a nice day for a movie projection.”
Nurses dispense comfort, compassion, and caring
without even a prescription – Val Saintsbury
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FINANCIAL PROJECTION
DISCLAIMER!!
• 25 distinct hospitals or hospital systems in New
Mexico
• No doubt there are 25 different approaches to the
annual budget.
• If there is any difference in approaches, follow the
budget guidance from your Finance Department
over the concepts and/or approaches presented
today.
As a nurse, we have the opportunity to heal the heart, mind,
soul and body of our patients, their families and ourselves.
They may forget your name, but they never forget how you
made them feel. – Maya Angelou
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FINANCIAL PROJECTION
What it is:
• Prediction
• Forecast
• Plan
• Estimate
• Guesstimate – 100% guaranteed to be wrong!
What it is not:
• A contract
• An absolute result
Always thank your nurse. Sometimes, they’re the only
one between you and a hearse. --Warren Beatty
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FINANCIAL PROJECTION
USES?
• _____________________________________
• _____________________________________
• _____________________________________
When you’re a nurse, you know that every day
you will touch a life or a life will touch yours.
--- Author Unknown
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FINANCIAL PROJECTION
TWO APPROACHES:
1. Quantitative – based on numbers and math.
Annualization based on historical experience
2. Qualitative – based on insights, estimates, best
guesses based on experience and knowledge
flavored with expectations.
NOTE: It is okay to use both approaches to make a
Financial Projection.
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FINANCIAL PROJECTION
Please refer to USES of Projections (three at least).
Which uses are likely based mostly on Quantitative
methods and which uses are likely based mostly on
Qualitative methods?
QUANTITATIVE:
1. __________________________________
2. __________________________________
QUALITITIVE:
1. __________________________________
If love can’t cure it, nurses can. -- Unknown
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FINANCIAL PROJECTION
QUANTITATIVE APPROACH - REVENUES
1. Baseline Data
a. INPUTS: Price, Quantity
b. Senior Leadership may prescribe OVER-ARCHING
ASSUMPTIONS.
Examples?
-- Volume
-- Across the board price change
c. OUTPUTS: Price, Quantity
Clinical Departments have Revenues (Gross Charges ) and Expenses.
Support Departments have Expenses.
NOTE: A Department may budget gross revenue. Accounting
Will usually budget Net Patient Revenue and Payor Mix.
Nurse – Just another word to describe a person strong enough to
tolerate everything and soft enough to understand everyone.
-- Anonymous
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FINANCIAL PROJECTION
QUANTITATIVE APPROACH – REVENUES
Save one life, you’re a hero. Save a hundred lives,
you’re a nurse. --- Unknown
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FINANCIAL PROJECTION
QUANTITATIVE APPROACH - REVENUES
Never do anything you would not want to explain to us
nurses. -- Anonymous
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FINANCIAL PROJECTION
QUANTITATIVE APPROACH – EXPEN$ES
1. Baseline Data
a. INPUTS: Price, Quality
b. Senior Leadership May prescribe OVER-ARCHING
ASSUMPTIONS.
Examples?
Average annual salary increase
Reduce Overtime to $0.
c. OUTPUTS: Price Quantity
Gotta pass the pills to pay the bills!
-- Anonymous
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FINANCIAL PROJECTION
QUANTITATIVE APPROACH – EXPEN$ES
Do you want to speak to the Doctor in charge, or the Nurse
who really knows what is going on? -- Unknown
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FINANCIAL PROJECTION
QUANTITATIVE APPROACH – EXPEN$ES
The trained nurse has become one of the great blessings
of humanity, taking a place beside the physician and the
priest – William Osler
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FINANCIAL PROJECTION
QUALITITATIVE APPROACH
A nurse will always give us hope, an angel with a
stethescope. – Terri Guillemets
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FINANCIAL PROJECTION
QUESTIONS?
It’s about the sick and hurting patients and their
terrified family members. – Bret Goebel,
Career Healthcare Bean-Counter
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