Discussion Board #5 Economics of HealthCare As the PowerPoint lecture and textbook indicated, healthcare is a business in which money is brought in via payment for services and money is spent toward providing those services. Every effort is made to anticipate the dynamics of revenue and expenditures by developing a budget. However, when those two have a gap in which revenue is more/less than expenditures, then a manager must find a way to bring the two together. One way to address the issue is to look at the salary and benefits being provided to the employee. The company pays the base salary, makes the necessary deductions for taxes, contracts and pays premiums with different insurance companies for the coverages provided, and establishes and contributes to the employee retirement plan. All fringe benefits are paid for by the company/employer. Below is a sample of salary and benefits for an employee at your facility: Salary and Fringe Benefits Base Salary Dollar Amount ($ per year paid by Employer) 47,000.00 Medical Insurance 7,600.00 Life Insurance 500.00 Accidental Death and Dismemberment 600.00 Long Term Care Insurance 2,000.00 Paid Time Off (vacation and sick days) 3,100.00 Retirement Plan 1,700.00 Consider the following: In the event of a budget shortfall: o Which of the above benefits would you cut to meet your budget and still be an attractive job to prospective employees? o Describe the reason and rationale for your choice of benefits to cut. If the opposite were true and the revenue exceeds the expenditures, then you would have money to enhance the working benefits for your employees. In that case: o If you could add a benefit for your employees, what would be the benefit that you would add? o Describe the reason and rationale for your choice of benefits to add.

Discussion Board #5 Economics of HealthCare As the PowerPoint lecture and textbook indicated, healthcare is a business in which money is brought in via payment for services and money is spent toward providing those services. Every effort is made to anticipate the dynamics of revenue and expenditures by developing a budget. However, when those two have a gap in which revenue is more/less than expenditures, then a manager must find a way to bring the two together. One way to address the issue is to look at the salary and benefits being provided to the employee. The company pays the base salary, makes the necessary deductions for taxes, contracts and pays premiums with different insurance companies for the coverages provided, and establishes and contributes to the employee retirement plan. All fringe benefits are paid for by the company/employer. Below is a sample of salary and benefits for an employee at your facility: Salary and Fringe Benefits Base Salary Dollar Amount ($ per year paid by Employer) 47,000.00 Medical Insurance 7,600.00 Life Insurance 500.00 Accidental Death and Dismemberment 600.00 Long Term Care Insurance 2,000.00 Paid Time Off (vacation and sick days) 3,100.00 Retirement Plan 1,700.00 Consider the following: In the event of a budget shortfall: o Which of the above benefits would you cut to meet your budget and still be an attractive job to prospective employees? o Describe the reason and rationale for your choice of benefits to cut. If the opposite were true and the revenue exceeds the expenditures, then you would have money to enhance the working benefits for your employees. In that case: o If you could add a benefit for your employees, what would be the benefit that you would add? o Describe the reason and rationale for your choice of benefits to add.