Innovative Financial Solutions for Home Health (IFS) offers a wide-range of Budgeting/Forecasting services. Let us help you improve your bottom line, your financial planning, and your company and staff’s financial discipline through the use of the best in Budgeting and Forecasting models.
A Budget is a static document
The budget should be completed prior to the start of the budgeted year and should not change during the year. It establishes the anticipated values/ratios projected by the agency for the upcoming year. It serves as a baseline for evaluating actual results, including:
- Agency growth
- Numerous Operational Ratios (Gross Margin %, Direct Cost to Overhead Cost, Medicare Revenue to Total Revenue, Payroll Costs to Total Costs,Gross Margin % by Payor, Travel Costs to Total Costs, Non-Medicare Revenue to Total Revenue, Cost to Charges)
- Cost per Visit (CPV) by Discipline (inclusive of all direct and indirect costs)
- Wage per Visit by Discipline
- Travel Cost per Visit by Discipline
- PPS Episodes (Average Reimbursement per Episode, Average Cost per Episode, Average Number of Visits (by discipline) per Episode)
A Forecaster is a dynamic document
A Forecaster is updated regularly and can be considered your “Living Budget”. A Forecaster contains all currently available actual data and the budgeted information for the remaining months of the year to create a more accurate and realistic projection of what your Year-End results will be. The remaining budgeted values can be adjusted based on identified trends from the accumulated actual values to improve the accuracy of projected year-end results.
The Budget establishes your fiscal goals whereas the Forecaster tracks your progress. Taken together, these powerful tools give you access to the knowledge needed to make sound business decisions. Every agency should use a Budget and a Forecaster as key management tools to help improve and/or maintain sound financial and operational practices.
To have a Forecaster, you should first have a Budget. Any budget is better than no budget (assuming that the budget is actually used). There are two distinct types of budgets: General Overview Budgets and Detailed Budgets. Both can stop at the agency level but the best go to the branch level (when applicable). Generally speaking, a Detailed Budget is better than a General Overview Budget.
The key differences between General Overview Budgets and Detailed Budgets:
|
General Overview Budget
|
Detailed Budget
|
|
|---|---|---|
| Revenues |
X
|
X
|
| Expenses |
X
|
X
|
| Patients |
X
|
|
| Episodes |
X
|
|
| Acuity Levels |
X
|
|
| Visits |
X
|
Better information leads to better decision making. The Budget and Forecaster are two of the major components needed to ensure that you have access to all pertinent data and information in a timely fashion. An IFS review of your current Budgeting and/or Forecasting methodology can improve your budgeting/forecasting process, and in turn, your bottom line. Let IFS assess your current procedures to identify the necessary changes that will help you get ‘more bang for your buck’ on your resource investment, thereby helping you become more efficient and profitable’.