Answering To Your CFO

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Answering To Your CFO

• Knowing Your True Costs
• Presented By Monica Haddox

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What will be covered in this Webinar?

• Part A Finding your true costs and projecting
  need
• Part B Measuring your cost projection vs. your
  actual costs

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Where do I start?

• Create a team
• Know your history
• Brainstorm
• Create a system of measurement
• Test your system

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What are costs?

• - Human Capital
• - Outsourcing of any kind
• - Supplies and Materials
• - Technology
• ANYTHING that takes money or time is a
• Cost!

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Have you seen this look?

• CFOs have to answer to someone, too!
• Being within budget gives you bargaining power!
• Having a plan allows everyone to relax!

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How can you project the future need?

• Look at the business plan for the future of the
  hospital/MTSO
• Align your goals with the overall goals of the
  facility
• Identify the role your department plays in the
  business plan
• Address the needs of the business plan vs. your
  current resources to project potential future
  costs within your department

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Business 101

• SWOT analysis
• Strengths
• Weaknesses
• Opportunities
• Threats
• How can this help me find my costs?

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Obstacles in the Road.

• Unplanned costs can be crippling
• Budgetary cuts an be unplanned
• Changes are inevitable!

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Is it time to choose New Technology?

• How much does the tech cost?
• Interfaces or other cost when switching?
• How long will switch take?
• What is the game plan in the mean time?

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Managing the Work- Being the Outsource

• Managing work- what to do with new accounts and
  how to budget
• Costs of overhead
• Payroll
• Training
• Other client needs that are your responsibility?

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Outsourcing

• Negotiate, negotiate, negotiate!
• Create a solid contract
• Have definitive terms and limits on contracts
• Be realistic!

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What is the largest piece of your budgetary Pie?

• Human Capital, or
• Technology?

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Human Capital

• How much can you expect from your employees?
• Do you have a clear job description for your
  employees?
• Do you measure their performance?
• Does their job create overhead, or cost savings
• Is the overhead necessary
• What is the actual cost savings vs. cost of
  employee?

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Employee vs. Contractor

• How much do your employees cost?
• Do you provide health insurance?
• 401K?
• Other employee benefits? Cafeteria privileges,
  PTO, vacation time, expenses?
• Calculate all benefits into the current pay of
  your employees and that is the total cost of the
  FTE (full-time employee)

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For instance.

• Pay per hour- 11.00 x 40 hours 440
• 401K cost- 4 of 440 17.60
• PTO accrual per week- 1 hour 11
• Health Insurance- 250/4 62.50
• Federal/Unemployment taxes- 52.80
• Total per week 583.90
• Per year before benefits 22,880
• Per year after benefits 30, 363
• A difference of 7483 per year, per employee

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Contractor Costs

• How much does your contractor actually cost?
• How are they paid? Cents per line? Flat rate?
• Do they need support from your staff?
• How much time does your staff take to accommodate
  contractor needs?
• Can you streamline the process with automated
  processes, training or information?
• Do their services require you to pay extra
  technology fees?

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Another for instance

• Contractor pay is 10 cents per line and reports
  are generally 5 minutes long
• 12 lines per minute x 5 minutes x .10 6.00
• Technology costs 2 cents per line 1.20
• Total report cost by contractor 7.20
• Does your staff have to handle the report after
  the document is returned? How long does it take
  the staff member per document? Add this to the
  total cost of the document

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Technology Help or Hinder?

• Does your technology address your needs?
• Do you have to perform other tasks outside of
  your technology that you feel should be addressed
  by your technology?
• Good rule of thumb If you have a repetitive
  task that can be addressed by technology, you
  should find a program or as your IT department to
  help you create a program to address your needs!
• Dont forget, time is money and technology should
  be helping you make money- not costing you time
  or money

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Reporting Capabilities

• Do you have the reports that you need?
• Are you using your technology to its fullest
  potential? Ask your vendor!
• How do you request upgrades from your vendor?
  How do they notify you of upgrades?

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Controlling Costs

• How can you control rising costs, but still
  engage your employees?
• Promotion from within
• Training
• Non-monetary incentives

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Controlling Costs Cont.

• How do you get the most from your outsourced
  contracts?
• Contractual obligations
• Training period- how long is too long?
• Plan with your contractors- establish
  communication

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More Costs!

• Technology- how can you cut costs?
• Do you have annual contracts or costs associated
  with technology?
• Do you have maintenance fees with your current
  contract?
• Can you find another program without the costs?

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Food for thought

• Other business expenses
• 1. Marketing
• 2. Advertising
• 3. Working Business expenses
• 4. Recruiting
• 5. IT
• 6. Other

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What about Growth?

• What do you need to approach your CFO?
• A strong and realistic plan
• Accurate numbers and costs from a reliable source
• Good communication
• Time frames and landmark goals
• Proof of ROI (return on investment)

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Reverse engineering your budget to find your true
costs

• Cost of transcription-
• Costs of personnel
• Technology
• Outsourcing
• Quality review
• Training
• Other transcription related costs such as
  hardware, etc.

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To review

• Employee Costs Per line of transcription-
• Pay per hour- 11.00 x 40 hours 440
• 401K cost- 4 of 440 17.60
• PTO accrual per week- 1 hour 11
• Health Insurance- 250/4 62.50
• Federal/Unemployment taxes- 52.80
• Total per week 583.90
• Per year before benefits 22,880
• Per year after benefits 30, 363
• A difference of 7483 per year, per employee

• Contractor Costs per line of transcription-
• Contractor pay is 10 cents per line and reports
  are generally 5 minutes long
• 12 lines per minute x 5 minutes x .10 6.00
• Technology costs 2 cents per line 1.20
• Total report cost by contractor 7.20
• Does your staff have to handle the report after
  the document is returned? How long does it take
  the staff member per document? Add this to the
  total cost of the document

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Reverse engineering continued

• Total budgetary costs per annum
• Total from last year, or
• Projected costs
• Add projected need and growth
• Dont forget things like raises, technology, and
  training
• Keep an eye on the Business plan
• Monitor spending
• Allow for changes and increases in your budget

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Thank You!

• Questions??
• Have a wonderful day!