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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. 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).
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
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…
References
Carolinas Healthcare System. (2015). 2015 Annual Report.
Carolinas Healthcare System. (2016). Carolinas Healthcare System Financial Information. Retrieved 6 August 2016 from: http://www.carolinashealthcare.org/about-us/corporate-financial-information
Moffit, R. E., Senger, A. (2016). Medicare's Rising Costs -- and the Urgent Need for Reform. The Heritage Foundation.
Ovans, A. (2015). What Is a Business Model? Harvard Business Review.
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