Income Statement and Donation Revenue

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vHow are the hospital’s revenues and expenses grouped for planning and control?

Patton-Fuller has two revenue categories; net patient revenue and other revenue.
Patton-Fuller expense categories are; salaries and benefits, supplies, physician and professional fees, utilities, other, depreciation and amortization, Interest, and provision for doubtful accounts.

The hospital’s revenue it broken up into two categories, the first being net patient revenue which consist of gross revenue generated by the hospital adjusted by contractual agreements with various manage care and or insurance groups. The second category is labeled “other revenue” and it appears to be made up of donations received from outside donors.

The other revenue categories are easy to plan and control because the only real expense associated with this revenue stream is from the marketing department siltation of donors. There should be collaboration with the marketing departments increased efforts with an increase in donation revenue. If a direct collaboration does not exist then it would appear that the marketing department’s campaign was not effective and thus the hospital’s directors should consider having the marketing department change its methods or consider reducing or cutting the marketing department.

The net patient revenue and associated expenses such as physician and other professional cost should show a similar collaboration, because an increase in net patient revenue can only occur by an increase in the number of patients seen or by renegotiating the hospitals various contracts. With an increase in patients you would expect physician and other professional cost to increase as well. Another expense category that you would expect to increase and decrease based on the number of patients seen would be the supplies expense, however this is not be true with Patton-Fuller because the notes from their 2010 budget stated that the hospital over purchased supplies in 2009.
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