Budget & Forecast for the Future
All health care organizations should anticipate fluctuating patient volumes, consumer preferences, competition, and a rapidly changing payer mix in a changing economic environment. Plan accordingly to stay current with all of these changes and keep yourself financially stable.
Forecasting helps determine how many patients the physician needs to see per month to break even and when he or she might have to draw from other financial resource pools.
Steps to Budgeting & Forecasting
Be disciplined and thoughtful
- Think about changes in reimbursements, addition/elimination of services, or possible new locations, and how these elements affect your budget.
- Set a date to complete your budget and stick to it.
- Don't create a budget that is unattainable. Budgets are important planning tools and should reflect reality.
- Don't pad your budget to make yourself look good.
Ask for input from managers, staff, and physician leaders
- Having everyone contribute input when developing your budget helps keep them accountable and aligned with the practice's financial steps toward viability.
- Physicians and staff will better understand the financial decisions being made within the practice if they are involved in the budgeting process.
- Obtaining feedback from others can lead to new ideas and revenue opportunities for your practice.
- Physician input can assist with budgeting and revenue forecasting and help you set financial goals for the practice.
What you will need
- Time to think about, discuss, and put together a budget for your practice.
- Financial tools for your practice to draft a budget and forecast revenue and expenses for the future of your practice. You can use a simple spreadsheet or other financial software of your choice.
- A business plan to keep your practice on track.
Difficulty: Easy for someone with an accounting background; moderate for someone without
Outcome: Understanding of your financial situation and ability to make informed decisions
Time to Complete: One month