Financial plan development and implementation

Financial Plan

Carolinas Healthcare System, a non-profit self-sustaining public organization, is the largest healthcare system in combined North and South Carolina. It is a multi-disciplinary, integrated healthcare system that provides an extensive range of health and human services to the general public of Carolina. The organization owns, leases and manages hospitals, nursing homes, physical therapy facilities, home healthcare agencies, as well as other healthcare associated operations (Carolinas Healthcare System, 2016). The organization employs more than 60,000 personnel and has a capacity of over 7,500 registered beds. The following section encompasses a projected budget that contains a 3-year financial projection from December 31, 2015. The financial projection takes into account detailed expenditures, income, contingency, gain or loss (Carolinas Healthcare System, 2015). The financial projection outlines the net revenues and the net expenses of the organization.

CAROLINAS HEALTHCARE SYSTEM

3 YEAR FINANCIAL PROJECTION

STARTING DECEMBER 31, 2015

NET REVENUE

2015

Year 1

Year 2

Year 3

% of total

% of total

% of total

% of total

Tertiary & Acute Care Services

6,877,396

76%

7544000

78%

7819646

77%

8103997

76%

Continuing Care Services

282,080

3%

467147.7

4.83%

639789.3

6.30%

789073.4

7.40%

Specialty Services

82,055

1%

93816.41

0.97%

121864.6

1.20%

106631.5

1%

Physicians' Services

1,565,625

17%

732308.7

14%

1370977

13.50%

1386210

13%

Other Services

231,905

3%

212779.5

2.20%

203107.7

2%

277242

2.60%

Totals

9,039,061

9671795

10155385

10663154

NET EXPENSES

Wages, Salaries & Benefits

4,981,692

55%

5230777

54.08%

6315634

62.19%

6611156

62%

Materials. Supplies & Other

3,010,451

34%

2,810,037

29.05%

2843508

28%

2879052

27%

Depreciation & Amortization

501,945

6%

506964.5

5.24%

510815.9

5.03%

639789.3

6%

Financing Costs

122,844

1%

120387.1

1.24%

103584.9

1.02%

104498.9

0.98%

Non-Operating Investment Losses

120,528

1%

78343.2

0.81%

79212

0.78%

85305.23

0.80%

Funding for Facilities, Equipment & New Programs

301,601

3%

292553

3.02%

302630.5

2.98%

343353.6

3.22%

Totals

9,039,061

9671795

10155385

10663154

Section Two

In delineation, a business model is the approach of undertaking business by which an organization can ensure sustainability through the revenue it generates. In particular, the business model outlines the way in which an organization makes revenues by distinguishing its position in the value chain. The current business model of Carolinas Healthcare System is the business to consumer service provider business model. The main sources of revenue include the provision of services (mainly tertiary and acute care), continuing services, specialty services and physician services. On the other hand, the main sources of expenditure for the organization comprise of wages and salaries, materials, depreciation, and financing costs (Ovans, 2015).

The internal resources and financial capabilities have a significant impact on the implementation of the business model. For example, the internal resource of the organization is the expertise of the physicians to have a significant impact on the implementation of the business model. As pointed out in the annual report of Carolinas Healthcare System, the physicians are constantly seeking ways in which they can enhance not only the healthcare that the patients receive, but also the experience they have whilst receiving it. In particular, the assimilation of technology, clinical distinction, and patient-centred care have a positive influence on the business model (Carolinas Healthcare System, 2015). Financial capability is the knowledge, know-how, attitudes and behaviour of persons with respect to the management of financial resources and understanding, selecting and utilizing financial services that are suited to the needs of the organization's (World Bank, 2013). One of the main ways in which the organization's internal resources and financial capabilities affect the financial plan is that inefficient execution implies that the organization is not able to meet its goals. This in turn adversely impacts the financial plan set by the objective. In addition, the financial capabilities adversely influence the implementation of the plan in the sense that it leads to poor decision-making, which affects the chances of achieving the objectives.

There are a number of budget assumptions and strategies included to increase volume. The net revenue of Carolinas Healthcare System for the next three years is projected to increase by 7% in the first year and five percent for the following two years. This implies that the total net revenue of the organization will increase from $9,039,061 in 2015 to $9,671,795 in 2016 to $10,155,385 in 2017, and further up to $10,663,154 in 2018. the main vehicle for this growth is the tertiary and acute care services. This is largely for the reason that the healthcare sector expects a continuing increase in the baby-boomers generation. statistics indicate that, roughly 10,000 baby boomers are anticipated to be included in the Medicare program each day. These individuals are 65 years old and above. Largely, this category requires acute care and tertiary services. Therefore, the revenue generated from these healthcare services is projected to increase substantially over the next three financial years (Moffit and Senger, 2016). A particular area in which the company has made significant advancement is acute stroke. The Annual Report of the company indicate proper advancements in the treatment of acute stroke and the organization plans on making certain that these trends continue (Carolinas Healthcare System, 2015).

The speciality services are projected to increase from $282,080 in 2015 to $467,147.70 in 2016, increase to $639,789.30 in 2017 and further up to $789,073.40 in 2018. This represents a 3% increase further up to 4.8% to 6.35 and further up to 7.40%. Carolinas Healthcare System anticipates to enhance its speciality care services, taking into consideration that the organization has substantial accessibility to expert knowledge to provide quality treatment in distinctive or complex courses of care. The specialty care providers of the organization lay emphasis on particular areas of health care in which they have comprehensive and in-depth training and education. This increase is anticipated because the specialists within the organization continue to improve and enhance treatment services and quality. In accordance to the 2015 Annual Report, data obtained from the organization's clinical trials has been tremendously positive, which proves that the company is offering the best treatment (Carolinas Healthcare System, 2015).