One of the tasks you face as a manager, especially if your organization makes frequent business transactions, is that of preparing a budget. A budget is a tool used for planning and controlling your financial resources. It is a guideline for your future plan of action, expressed in financial terms within a set period of time. A budget does not have to be complex. However, it should support the strategic plan for the organization. We will need resources to achieve our goals and objectives.

For this assignment, you will focus on the operating budget. An operating budget shows the company’s projected revenue and associated expenses for an upcoming period—usually the next year. An operating budget starts with revenue, and then shows each expense type. This includes variable costs, or the costs that vary with sales, such as the cost of raw materials and production labor. The operating budget includes fixed costs, such as the monthly rent on office space or the monthly payment for a photocopier lease. The budget also includes operating expenses, such as interest on business loans, and the non-cash expense of depreciation. These items enable the company to compute its projected net income and net profit percentage.

Imagine you are the healthcare administrator for an actual non-profit clinic, home health agency, or outpatient surgery center. Your first task is to locate either the strategic plan for that organization or determine its strategic direction through the vision statement, mission/purpose statement, and strategic priorities/goals. You will also need to locate the audited financial statements for the organization.

Using the information from your research, develop a one-year operating budget for the chosen entity, which will include operating revenues and expenses. Include a 1–2 page document to justify the approach you use in constructing the operating budget with the strategic plan or strategic direction.

  • Upload the strategic plan or strategic direction and audited financial statements as an attachment or include the web link.
  • Complete your operating budget using Excel.
  • Support your work with at least 3 quality references, one being your course textbook.

The specific course learning outcome associated with this assignment is:

  • Develop a budget for a department within a healthcare organization.


Required Resources 

Cleverley, W. (2018.) Essentials of Healthcare Finance (8th ed.). Burlington, MA: Jones and Bartlett. 

Supplemental Resources 

Calculators. (n.d.). Investopedia. Retrieved from http://www.investopedia.com/calculator/ 

Finance. (2014). General Format. Retrieved from http://www.financepractitioner.com/home 


Course Resources 


Instructional Materials

Required Resources 

Agency for Healthcare Research and Quality (AHRQ). (2019). Section 4: Ways to approach the quality improvement process (Page 1 of 2). Retrieved from https://www.ahrq.gov/cahps/quality-improvement/improvement-guide/4-approach-qi-process/index.html

Agency for Healthcare Research and Quality (AHRQ). (2018). Understanding quality measurement. Retrieved from https://www.ahrq.gov/professionals/quality-patient-safety/quality-resources/tools/chtoolbx/understand/index.html

Becker’s Hospital Review. (2019). Cost containment is a top priority in 2019 for healthcare executives. Retrieved from https://www.beckershospitalreview.com/cost-containment-is-a-top-priority-in-2019-for-healthcare-executives.html

BrainStuff. (2013). How does the Affordable Care Act work? [Video]. Retrieved from https://youtu.be/vju70I6qSKk

Codible. (2012). NPV and IRR in Excel 2010 [Video]. Retrieved from https://youtu.be/qAhV3xG0i8s

Claxton, G., Cox, C., Gonzales, S., Kamal, R., & Levitt, L. (2015). Measuring the quality of healthcare in the U.S. Retrieved from https://www.healthsystemtracker.org/brief/measuring-the-quality-of-healthcare-in-the-u-s/

Gaither, K. (2014). Payback and discounted payback [Video]. Retrieved from https://youtu.be/423Wdr5SDPc

Gapenski, L. C. & Reiter, K. L. (2016). Healthcare finance: An introduction to accounting & financial management (6th ed.). Chicago, IL: Health Administration Press.

Healthcare Financial Management Association (HFMA). (2019). Retrieved from https://www.hfma.org/about-hfma.html

Interwork. (2018). How to achieve (& maintain) regulatory compliance in healthcare. Retrieved from https://interwork.com/regulatory-compliance-in-healthcare/

iPatientCare. (2016). Why quality improvement in healthcare is important. Retrieved from https://ipatientcare.com/blog/why-quality-improvement-in-healthcare-is-important/

Kaiser Family Foundation. (2014). Health insurance explained: The YouToons have it covered [Video]. Retrieved from https://youtu.be/-58VD3z7ZiQ

Red Bag Alliance. (2017). HIPAA overview [Video]. Retrieved from https://youtu.be/gmu86igu93w

Ross, S. M. (2018). The importance of patient safety in healthcare [Blog post]. Cureatr.com. Retrieved from https://blog.cureatr.com/the-importance-of-patient-safety-in-healthcare

SBN Staff. (2016). Cost containment strategies that can control your health care costs. Smart Business. Retrieved from https://www.sbnonline.com/article/cost-containment-strategies-that-can-control-your-health-care-costs-2/

Serino, A. (n.d.). 5 examples of quality improvement in healthcare & hospitals. ClearPoint Strategy. Retrieved from https://www.clearpointstrategy.com/examples-of-quality-improvement-in-healthcare/

Steiner, R. (2017). What exactly does quality mean in the healthcare context? Elation Health. Retrieved from https://www.elationhealth.com/healthcare-innovation-policy-news-blog/quality-healthcare/

Trifilio, S. (n.d.). Understanding the true costs of healthcare regulatory compliance. HealthcareSource. Retrieved from http://education.healthcaresource.com/healthcare-regulatory-compliance-cost/

UAB Medicine. (2016). The business of health care part I: A historical look at cost control and reimbursement [Video]. Retrieved from https://youtu.be/09H_k32w7rY

Supplemental Resources 

Investopedia. (n.d.). Calculators. Retrieved from http://www.investopedia.com/calculator/

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