Please read the discussion board post and complete a full 1-page peer review (response). Also, please elaborate on the discussion and follow the grading rubric. ***Please do not use the same words from the original order #121566*** I do not need a title page. I have attached the discussion board post and grading rubric as a file.

Question 1

1. The invasive radiology department has just purchased a piece of equipment that enables them to perform many of their procedures faster. One of the results of this improvement is that they are able to schedule 20% more cases on an average weekday. During the preplanning of this improvement, the director of short stay was not included and was told her staffing needs might increase by 10%. After the first month of the use of the new equipment, the short stay unit had the following variances. (Chapter 7 #1)

• Which of the variances are positive?
• Which of the variances are negative?
• What does the director need to report to senior leadership as to what has happened and why, and what she is doing to make appropriate adjustments?

Answer 1

The volume number of patients has a positive variance. The budgeted number of patients was 1,000 while the actual volume was 1200, exceeding the budgeted units by 200. The supplies have a negative variance. The budgeted supplies were 5,000 units, while the actual supplies were 5,100 (Waxman, 2018). The facility will have to pay for the excess 100 supplies out of pocket—resulting in increased expenditure and decreased revenue. The overtime hours associated with staffing has a negative variance. This is shown by the budgeted 50 hours in overtime and the actual 75 hours in overtime. This indicates that the facility will incur additional costs to cover the 25 hours not accounted for in the budget. The director needs to report that the turnout of the patients in terms of the volumes documented is favorable for the facility. Hence, it is appropriate to increase the staffing by 10% to reduce the 25 additional hours incurred in overtime expenditures. Also, the director needs to emphasize the need to supply precisely budgeted supplies to avoid unaccounted supplies costs.

Question 2

Review the income statement provided in Table 7.2 and address the following questions: (Chapter 7 #4)

• From your analysis, you understand that the net margin for the organization has shown strong growth over the past year. What factor/s is/are driving this improved performance?
• What concerns do you have regarding current financial performance of this organization? As an executive leader within this organization, what priority issues should this organization address?
• Is your impression of the reported financial performance generally favorable or unfavorable? Why?

Answer 2

The improved performance is associated with increased routine services and inpatient ancillary and outpatient ancillary services. Studies have shown that increased routine services reduce the chances of healthcare-associated infections and adverse events resulting in malpractice charges and professional liability expenses (Geerligs et al., 2018). Also, research shows that patients provided with regular routine services are likely to pay for additional clinical services, driving the hospitals’ revenue higher than facilities that offer suboptimal services (Lion et al., 2019). Also, inpatient and outpatient ancillary services enhanced the growth since these services provide patients with better clinical experiences at an extra cost—and additional revenue for the hospital facility. Some of the concerns concerning the current financial performance include the drop in the insurance contracts in the management of care. This implies that the facility has been involved in fraud and that measures have been taken to reduce the number of patients under insurance cover. The facility leaders need to address this issue and establish the cause of reduced insurance contracts in the management of care. Also, supplies, maintenance, and professional liability costs have increased by 100%, 21%, and 4%, respectively. These issues point towards poor clinical equipment handling and maintenance, leading to depreciation rates by 19%. The facility is incurring high expenses to replace medical equipment, which should be the priority issue. The overall net income from operations pre-tax has improved by 97%, which is considered favorable.

References

Geerligs, L., Rankin, N. M., Shepherd, H. L., & Butow, P. (2018). Hospital-based interventions: A systematic review of staff-reported barriers and facilitators to implementation processes. Implementation Science, 13(1), 1–19. https://doi.org/10.1186/s13012-018-0726-9 (Links to an external site.)

Lion, J., Malbon, A., Henderson, M. G., & Friedman, R. H. (2019). A comparison of hospital outpatient departments and private practice. Health Care Financing Review, 6(4), 69–81. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4191490/ (Links to an external site.)

Waxman, K. T. (Ed.). (2018). Financial and business management for the doctor of nursing practice (2nd ed.). Springer Publishing Company.

Response: Income Statement
Nurse leaders use income statements to report their financial performances over a given financial year. Using income statements, nurse leaders are able to summarize their expenses and revenues over specific periods of time (Waxman, 2018). The given financial statement has provided a summary of the revenues and expenses of the organization. From your discussion, you have identified factors that contributed to improved financial performance in the organization. For example, you have identified increased routine services to be among the factors that improved performance. Doctor of Nursing Practice (DNP) graduates should understand how increased nursing practices drive improved financial performance in healthcare organizations.
Researchers have linked routine primary care with improved patient outcomes and cost savings. Healthcare organizations that are able to ensure increased routine care usually record improved patient satisfaction and reduced expenses. Matenge et al. (2021) conducted a systematic review of the literature to examine the impacts of routine primary care on the health outcomes of patients with different types of illnesses during the COVID-19 pandemic. The pandemic made healthcare organizations divert their resources from routine primary care for patients who did not need acute and urgent care. On the other hand, they prioritized resources for patients who required urgent and acute health care services. Significant improvement in health outcomes and cost savings were recorded due to increased routine care for patients who received urgent and acute health care services.
Today’s nurse leaders should have an adequate understanding of financial management principles. They should apply their financial management knowledge and skills to help their organizations to control costs and maximize revenue. Additionally, nurse leaders should be able to prepare and interpret financial statements to be able to identify elements that contribute to positive and negative financial performance.

References
Matenge, S., Sturgiss, E., Desborough, J., Hall Dykgraaf, S., Dut, G., & Kidd, M. (2021). Ensuring the continuation of routine primary care during the COVID-19 pandemic: a review of the international literature. Family Practice, cmab115. Advance online publication. https://doi.org/10.1093/fampra/cmab115
Penner, S. J. (2017). Economics and financial management for nurses and nurse leaders (3rd ed.). New York, NY: Springer Publishing. ISBN-13: 9780826160010.
Waxman, K. T. (2018). Financial and business management for the Doctor of Nursing Practice. 2nd ed. Springer Publishing Company.