You have been given the Statement of Revenues, Expenses, and Changes in Net Posi

Question

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

Explanation / Answer

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

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