Homework SourseYou have been given the Statement of Revenues Expenses and C
You have been given the Statement of Revenues, Expenses, and Changes in Net Position from Sarasota County Public Hospital for years 2016 and 2015 (Refer to table below). Review the statement and answer the following questions.
SARASOTA COUNTY PUBLIC HOSPITAL DISTRICT
Statements of Revenues, Expenses and Changes in Net Position
Years ended September 30, 2016 and 2015
1. What is the gross patient service revenue for both years? (4)
2. What percentage does the provision for bad debts account for based on the gross patient service revenue? (2) net of prov debts/gross pat rev x100%
3. Compare Sarasota County Hospital District’s bad debt percentage to the AHD national average Make sure to select the correct hospital type for comparison. You may have to go to Saratota’s site to determine if it is for profit, not-for profit, multi-hospital, or non-multi hospital.
The AHD data is provided below
HOSPITAL BAD DEBT EXPENSE TRENDS BASED ON OPERATING CRITERIA
HOSPITAL BAD DEBT EXPENSE TRENDS BASED ON MEDICARE
DISPROPORTIONATE SHARE HOSPITAL (DSH) PARTICIPATION
HOSPITAL BAD DEBT EXPENSE TRENDS BASED ON PERFORMANCE IN VALUE-BASED PURCHASING
7.44%
4. How does Sarasota compare to the rest of the country? (5)
5. What could be some reasons for the difference? (5)
6. What percentage of total operating expenses do salaries, wages and fringe benefits account for for each year? (4)
7. Find four areas that represent the biggest differences in line items between the two years under non operating items? What could account for the differences? (10)
8. Sarasota’s excess of revenues over expenses was almost 16 million dollars less in 2016 over 2015. Provide two viable, well developed recommendations for Sarasota’s administration for ways to reverse this trend. Discuss each recommendation separately. For example: First recommendation is …., Second recommendation is ….. Do not co-mingle the recommendations.
| 2016 | 2015 | |
| operating revenues: | ||
| Net patient service revenue, net of provision for bad debtsof $125,863,304 in 2016 and $114,022,502 in 2015 Other revenue | $702,550,286 | 644,374,041 |
| other revenue | 16,881,490 | 17,431,883 |
| Total operating revenues | 719,431,776 | 661,805,924 |
| operating expenses | ||
| salaries, wages and fringe benefits | 362,154,492 | 306,793,080 |
| supplies | 148,223,399 | 132,452,568 |
| purchased services | 96,310,316 | 87,046,147 |
| professional fees | 22,366,225 | 19,435,537 |
| state of florida medical assistance assessment | 8,643,786 | 7,619,198 |
| depreciation and amortization | 39,320,638 | 37,858,112 |
| total operating expenses | 677,018,856 | 591,204,642 |
| operating income | 42,412,920 | 70,601,282 |
| net operating items | ||
| Ad valorem tax | 46,845,113 | 44,983,493 |
| interest expense | (14,020,033) | (13,759,733) |
| INTEREST rate swap receipts, net | 733,945 | 762,916 |
| investment income | 19,195,462 | 11,608,350 |
| unrealized gains and losses on investment net | 6,684,182 | 2,499,399 |
| change in fair value of ineffective interest rate swaps | 299,454 | 4,098,751 |
| other nonoperating income | 4,798,957 | 2,010,096 |
| total nonoperating items | 64,537,100 | 52,203,272 |
| excess of revenues over expenses | 106,950,020 | 122,804,554 |
| other changes in net position: | ||
| contributions restricted for capital purposes | 1,064,118 | 3,612,013 |
| increase in net position | 108,014,138 | 126,416,567 |
| net position begining of year | 825,899,824 | 699,483,257 |
| Net position end of year | 933,913,962 | 825,899,824 |
Solution
Soln : 1)
2) Bad debts in 2016 = 125863304 and in 2015 = 114022502
3) Sarasota is a not for profit and non multiple hospital, as per the AHD data for such hospitals
Percentage Bad Debt Expense to Net Patient Revenue = 10.39%
While for the Sarasota it is more than 15% in both the years, whcih seems to be on very high side.
4) Compare tot he hospitals in country the Sarasota\'s Bad debts are way higher and almost double compare to other hospitals under or not same category.
Reasons may be as it is one of the biggest hospital and majorly people from poor background are coming to this hospital, who at times are not able to pay the charges and it is having all specialised that makes it attractive for very large population in the country.
| 2016 | 2015 | |
| Gross patient revenue(in$) | 82,84,13,590 | 758396543 |
