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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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