Running head: SENSITIVITY ANALYSIS

Sensitivity Analysis HCS/405 April 21, 2014

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Sensitivity Analysis This paper will concentrate on certain elements that may affect Patton-Fuller Hospital. Certain elements will include how trend analysis may be used to plan for staffing and the effects of giving raises to nurses. Staffing is expensive if an organization wants to stay competitive within the employment market. Also discussed are the advantages, disadvantages, and the best choice for Patton-Fuller. Comparative data facilitates forecasting will also be summarized. Comparative Analysis As with any business, there is a need for keeping track of the finances and the same said for Patton-Fuller. Keeping track of revenues and expenses as well as audits, is how Patton-Fuller keeps all revenues and expenses in order. However, even with the best of record keeping it is easy for errors to occur, which are why there are many steps in financial reporting, this way errors are caught and fixed. Having finances in order helps the business keep revenue and expenses in order. Looking at Patton-Fuller Community Hospital analysis shows persistent increase in the wintertime months creating the heavier amount of work and the summertime are normally be less work. Staff wages, management can compare previous wages internally or of other health care organizations and compare, industry average to determine if a wage is appropriate. The Nurse-to-patient ratio is determined by the patient census. The ratio calculated by calculating the number of nurses and number of hours those nurses worked then dividing that by the patients census. This will give the healthcare organization an idea if they have right number of nurses working. 2010 Budget Assumptions The chief financial officer proposed a new budget based on the previous two years operating budget variances. The budget also included a financial analysis for giving the nurses a

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$ 1.00 raise or decreasing the nursing ration from four to one (four patients for every nurse). The current nurse ratio is 5 to 1 with a current hourly rate of $30.00 an hour. Five different elements are currently affecting staffing of the nurses at Patton Fuller Hospital such as raises in wages, shortages in nurses, poor quality in patient care, dissatisfied nurses and nurses being overworked. I believe Patton Fuller Hospital would benefit greatly if the nurse ratio change to four to one. I also believe the nurses would be happy to receive a dollar raise with better benefits, this will enable nurses to give quality care and focus more on their patients, turnover rates will decrease because nurses will not feel so overworked and overwhelmed with their workload. If nurses receive a $1.00 raise going up to $31.00 with benefits, the nursing average monthly cost would be $1,974.781. If Patton Fuller decreases the ratio to 4-1, the monthly average cost would be $2,388,848. The 2010 budget assumption shows that it will have a positive effect on Patton Fuller because of the 3% deflation rate for prices in 2009. Patient revenue is expected to increase, but will have a decrease rate of 3% because of the new management care contracts (University Of Phoenix, 2014). All of Patton Fuller new efficient equipment will offset any increase in utility cost. Trend Analysis for Staffing In order for Patton-Fuller Community hospital run in tip top shape, they are required to employ, recruit and retain a well-educated team of employees that are there to care for the patients. One way for the Human Recourses Team to employ, recruit and retain good employees is to track any employment and correct any issues that may have come about is through trend analysis. Trend Analysis is a tool management uses in order to track any trends in employment. Patton-Fuller can use trend analysis to track what years or even months and weeks are the most staffed and what was going on at those times. Trend analysis could be used to project the amount

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of new hires as well as being able to keep individuals in the company to better serve their patients. Trend analysis was able to show me that the wage of $21.32 per hour for a Staff RN is an acceptable and even desirable wage for a RN. Both Teressa Ashley(2003 hire date) and Mozell Silverman (2001 hire date) were hired in to Patton-Fuller Community Hospital at the same wage yet there hire dates were 3 years apart from one another. Historical data such as this is the best way for Patton-Fuller to increase longevity and improve retention in the company. Trend Analysis for Forecasting Trend analysis is very important to Patton-Fuller Community Hospital on many different levels. Being able to forecast a jump or a decreased amount of patients admitted to the hospital around a certain time of year or month can allow the hospital to be more prepared for increases in income and need of staff as well decrease in those areas. Although trend analysis is not an exact science it does show any patterns that may develop over a period of time for the company. The HR department can use trend analysis in order to see what time of year or how often they need to increase or decrease staff. The same goes for the financial side. Seeing historical figures during a certain period or quarter can better prepare a facility for shortcomings or windfalls. Staffing maybe challenging and require more money than expected. Downsizing staff or decreasing hours may happen to maintain service at a certain stage. Downsizing staff is not good for patient care but financially beneficial to an organization. Each health care organization must obtain good nurse to patient ratio and some states may have a ratio already mandated. A good health care organization keeps the employees happy and tries not to over work him or her. When processing a trend analysis and relying on the financial forecasting a health care organization is ready for staffing issues. An organization uses the trend analysis form of comparative analysis to

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compare current and past ratios to make comprehensive forecasts for future investments and financial decisions.

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References:
https://ecampus.phoenix.edu/secure/aapd/cist/vop/Healthcare/PFCH/financialstatements.asp?revenue andexpense