Budget for Chronic Kidney Disease

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Table of Contents

Introduction
The budget
Justification
Capital budget
Reference

Introduction

Treatment of chronic kidney disease (CKD) is a major challenge for major health care facilities across the world. With the increase in the prevalence rate of CKD the cost of administering the treatment of the diseases is also expected to increase. The paper seeks to develop a budget for a CKD program. The budget will be for a period of one year.

The budget

The budget will have two segments, these are, revenue and expenditure. The costs can be categorized grouped into direct and indirect costs. The direct costs relate to directly to the health care provided for patients with chronic kidney disease while the indirect costs are other auxiliary costs (Penner, 2013). The department will invest in capital equipment, information technology equipment, infrastructure, and operating expenses. The table presented below shows a summary of the budget for the CKD program.

Table 1.0 – Operating budget

Chronic Kidney Disease Program
Operating budget for the year 2013
Revenue
	Description	Amount ($000)
	Ministry of health	1,703,665.25
	Other provincial departments	19,766.25
	Grants and donations	1,225.00
	Fees from patients	40,000
	Others	52,625.75
	Transfer to capital budget	-175,455.00
	Total revenue	1,642,877.25
Expenditure
	Inpatient and resident services	1,226,477.00
	Primary health and home care	208,393.50
	Operational support	234,941.00
	Administration	110,953.50
	Ancillary	18,711.00
	Total operating expenses	1,799,476.00

Table 1.1 – Capital budget

Chronic Kidney Disease Program
Capital budget for the year 2013
Revenue
	Description	Amount ($000)
	Ministry of health	80,507.00
	Other provincial departments	35,733.25
	Grants and donations	22,246.00
	Others	36,968.75
	Transfer from operational budget	175,455.00
Expenditure
	Diagnostic imaging equipment	18,515.00
	Medical / surgical equipment	17,759.00
	Information technology	23,002.00
	Capital projects	180,505.50
	Total capital expenses	175,455.00

Justification

Operating Budget

The information provided in the table above indicates that the total revenue raised for the chronic kidney disease program will amount to $1,818,332,250. Out of the revenue raised, $1,642,877,250 will be allocated to operating expenses while $175,455,000 will be apportioned to capital expenditure. The main source of revenue for the program arises from the ministry of health. The allocation by the ministry of health is based on predetermined funding guidelines.

The second category of revenue item is the allocation from other provincial departments. This contains allocation received from the county government. The allocation is also based on predetermined guidelines and it amounted to $19,766,250. The third revenue item is donations and grants. This category contains funds received from various organizations such as research institutes. Grants and donations amounted to $1,225,000.

Further, fees from patients will amount to $40,000,000. The estimated number of patients who will be attended to during the year is 10,000 at an average cost of $4,000 per patient. The fees relate to charges for supportive care, home care and other services provided by the hospital.

This generates total annual revenue amounting to $40,000,000. Other revenues amounting to $52, 625,750 arise from miscellaneous sources such a coffee shop and patient and agency charges among others. They also relate to money received from other sources that do not fall into the categories discussed above.

A significant percentage of the expenses will relate to medical services provided to the patients and residents. The total expenses relating to inpatient and residents amounted to $1,226,477,000. The expense can be categorized into compensation and medical & surgical. Compensation relates to amount paid for salaries to employees, medical remuneration and benefits, and purchased salaries among others.

On the other hand, medical & surgical supplies relate to diagnostic imaging supplies, drugs, laboratory supplies, medical and surgical supplies, prosthetics, and therapeutic supplies. Further, the budgeted amount for the provision of primary and home health care services amounts to $208,393,500. These are costs related to the provision of health care services. Operational support costs amount to $234,941,000.

The category contains costs such as information technology contracts, utilities, repairs and maintenance, insurance, rent, and lease. The administration cost amounting to $110,953,500 contains expenses that relate to general support services. Examples of expenses in the category are advertising and public relations, board and meeting expenses, office supplies and other office costs, professional fees, outsources services, housekeeping and laundry supplies, and other general supplies that are related to the CDK program.

Capital budget

The budget is used to record expenses for projects that are expected to run for a period of more than one year. As mentioned above, out of the total revenue generated, $175,455,000 is allocated to capital expenses for the program. Revenue for the expenses will originate from ministry of health, other provincial departments, donations & grants, and other sources. The budget indicates that $18,515,000 will be used to purchase diagnostic imaging equipment and $17,759,000 will be spent on the purchase of other medical / surgical equipment.

Further, the cost of information technology amounting to $23,002,000 will be used for various expenses that relate to information technology. Some of the expenses in this category are installation of E-Health, wireless network, enterprise backup, RUH UPS upgrade, and desktop virtualization among others. Finally, the cost of $180,505,500 for capital projects relates to cost of renovation of various structures that will be used for the program. It will also include the cost of demolition and construction of new structures for the program.

Reference

Penner, S. (2013). Economics and financial management for nurses and nurse leaders. New York, USA: Springer Publishing Company.

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