Health finance | Economics homework help


Buying expensive items is not easy for individuals with limited economic resources. Even though the budgets of most health care organizations (e.g., hospital, clinic, doctor’s office) are significantly larger than the budget of the average American family, most of these organizations operate with limited resources too. Health care managers use planning and budgeting information to make resource use decisions.

To prepare for this Discussion, complete the readings in your Learning Resources. Think about a significant purchase you have made in the past. How did you pay for it? Did you shop around for the best deal? What was the impact on your own budget and finances?

Post a comprehensive response to the following:

  • Share an example of something that you had to budget and plan to pay for. How does your personal decision-making process differ from what you learned about planning and budgeting in health care?
  • How do most individuals monitor and control their cash flow? Provide specific examples.
  • How does the monitoring of cash flow of a health organization compare to the monitoring the cash flow for individuals handling their personal finances? Explain your choice.

Be sure to support your work with specific citations from this week’s Learning Resources and/or additional scholarly sources as appropriate. Your citations must be in APA format. Refer to the Essential Guide to APA Style for Walden Students to ensure your in-text citations and reference list are correct.



A financial manager’s responsibilities do not cease after he or she develops a budget for execution. On the contrary, the manager’s job begins with a completed budget. The manager must track the execution of the budget approved by senior leadership to meet financial goals. Since trends, costs, and other externalities can cause changes or variances in the budget, the financial manager must monitor and adjust spending when necessary to account for those variances.

Even with relatively good control, taxes, rounding effects, and unexpected price increases can negatively affect budget execution. Nickels and dimes add up quickly. If unaccounted for and not closely tracked, those nickels and dimes can derail even the most carefully considered financial plan. Overspending can pose serious threats to projects and the availability of resources for future projects. Under spending can indicate a problem in quality control. Under spending may be a good thing (due to improved efficiency) or it may also be bad (manufacturers cutting corners, which may result in inferior product). The bottom line to remember is that variance happens and health care managers must respond effectively.

To prepare for this Application Assignment, review the Northeast Health System 2011 Annual Report. As you review, analyze the concept of variance. Consider what factors influence variance and how organizations control these factors in a real world setting. Analyze how the economic environment in which the organization operates influences the means of adjusting expenditures to meet financial goals.

To complete this Application Assignment, you will calculate: 1) the variance for selected items from the annual report and 2) the percentage that each expense item contributes to the overall expenses. Next, you will write a 2- to 3-page paper that explains how the variance and expense percentage calculations are used to monitor and control the budget.

You will submit both the excel spreadsheet and the 2- to 3-page paper as follows:

  1. Using the provided Excel spreadsheet, calculate the variances for each line item under the tab labeled “Variances.” A guideline for calculating the variances is located in the Weekly Resources.
  2. Using the provided Excel spreadsheet, calculate the expense proportion of each line item under the tab labeled “Proportional Allocations.”
  3. After completing the spreadsheet, please address the following in a 2- to 3-page paper. The first paragraph should address the first two elements. The bulk of the paper should address the remaining elements.
    • Explain the concept of variance. Cite your sources.
    • Briefly describe the Northeast Health System from the information found in the annual report.
    • Summarize the key variances (positive or negative) you uncovered during your analysis (data only). Focus on the most significant variance items.
    • Summarize the key findings from your proportional allocation analysis. Focus on the most significant proportions.
    • What observations can you make about the Northeast Health System based on the variances and proportional allocations that you calculated?
    • What do you believe led to the variances you identified?
    • Since certain line items in a budget are more controllable than others, what actions might you recommend to the Northeast Health System to either decrease or increase their significant variances and proportional allocations?

Your written assignments must follow APA guidelines. Be sure to support your work with specific citations from this week’s Learning Resources and additional scholarly sources as appropriate. Refer to the Essential Guide to APA Style for Walden Students to ensure your in-text citations and reference list are correct.




Introduction to Health Care Economics & Financial Management
Chapter 3, “Financial Reporting in Managed Care Settings”In this chapter you will apply the concepts of managed care to analyze and evaluate utilization and costs for a sample pediatric office.

Chapter 4, “Types and Components of Budgets”Budgets are a way to review, monitor, and plan the production of goods and services. This chapter focuses on the descriptive function of various types of budgets commonly encountered in health care settings.

Chapter 5, “Budget Monitoring and Control”This chapter shows how budgets are used to monitor resource use. Budget information helps to identify performance problems, investigate their sources, and suggest opportunities to take corrective action.

Chapter 6, “Budget Preparation”In this chapter, you will see how budgets are used to plan for the future and to prepare budgets for the following year or more. The concepts relevant to budget preparation for operating and capital budgets are discussed. Considerations in preparing a cash flow budget and zero-based budgeting are included.

Northeast Health System. (2011). Strength upon strength: Northeast Health System annual report 2011. Retrieved from

Powell, A., Davies, H. & Thomson, R. (2003). Using routine comparative data to assess the quality of health care: understanding and avoiding common pitfalls. Retrieved from ttp://

This article discusses the ways in which quality of care is currently assessed is by taking routinely collected data and analyzing them quantitatively. It also touches on the fact that the use of routine data has many advantages but there are also some important pitfalls. It also covered how collating numerical data in this way means that comparisons can be made—whether over time, with benchmarks, or with other healthcare providers (at individual or institutional levels of aggregation).

You use the following document for this week’s Application assignment:

Document: Instructions for Calculating Percentage of Variance (Word document)

Document: Week 2 Application Assignment spreadsheet (Excel document)

Healthcare Financial Management Association

The Healthcare Financial Management Association is a membership organization for health care financial management executives and leaders. The association is considered a respected thought leader on top trends and issues facing the health care industry. The HFMA website provides a knowledge center with useful supplemental information on a number of health care financial topics, publications, news, and a career center.

Healthcare Financial Management Association Knowledge Center

The Healthcare Financial Management Association provides a wide assortment of current articles, seminars, and other breaking news about various aspects of health care financial management.

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