Holly Patterson Extended Care Facility
Bad debt is not a major problem for the Holly Patterson Extended Care Facility, and though operating expenses are increasing at a fairly modest rate (with the notable exception of benefits to employees, which are increasing more rapidly) they are not running rampantly out of control. Despite this, the medical facility is operating at a loss that appears to be growing more significant for reasons that organization has very little control over. Federal and state funding has been used in part to cover the operating expenses of the facility, which does not meet its full expenses through patient revenue, however these sources of government funding have dried up and can no longer be considered in the organization's operating budget....
As it is unlikely that this governmental spending will resume at any point in the near future, the facility will need to find other ways to make up for its budget shortcomings through revenue increases and/or cost cutting measures.
As bad debt is a very minor percentage of overall patient revenue, it is quite possible that prices for services could be increased without incurring greater losses or a higher percentage of unpaid debt. It is also possible that costs can be controlled through making the facility more efficient, and staffing cuts might be borne with greater ease than at some medical institutions. As an initial measure, however, tackling the budget shortfall solely from the revenue end might be sufficient as a stop-gap while greater efficiency is achieved.
