Discussion/Assignment
Please answer the discussion question for Week 9 & 10… I have attached the completed assignment 1 for reference.
Secondly please complete the assignment 3 for power point slides. Please let me know if you have any questions.
Discussion/Assignment
Organizational Snapshot
Identification of the Organization
Baylor Scott & White Holdings- BSW Holdings is a nonprofit organization that is situated in Texas, which was created as a merger of two healthcare systems in the county. The affiliates are the Scotts & White Healthcare (S & W) and Baylor Health Care System (BHCS). The corporation controls important aspects and reserved powers over the material affiliates of S & W and BHCS. It involves two flagship hospitals, the Scott & White Memorial Hospital and the Baylor University Medical Center in combination with other twenty hospitals that are situated in central Texas (Baylor Health Care System, n.d). The system also comprises a research institute and five foundations. It has the Baylor Scott & White Quality Alliance (BSWQA), which is a care organization that is accountable for performing the clinical operations, integrating the health network of employees, hospital, physicians that are independent and other providers that aim at delivering value-based cost-effective and high-quality care.
The organization has a strategy of changing the healthcare system for the better, which it aims at achieving through creating a road map for the future. The strategy is aligned with the vision, mission, and values and of the organization. Its mission is based on its foundation as a Christian ministry of healing, where it works towards promoting the well- being of the communities, families, and individuals. Its vision is to become a trusted innovator and educator in the value- based care delivery, affordability and customer experience (Baylor Health Care System, n.d). The strategy of BSW Holding is health experience, affordability and alignment growth.
Revenue and Expense
The operating margin of BSW Holding for the first half of the fiscal year 2018 amounted to 383.4 million dollars, which was equivalent to 8 % of the total operating revenue. In comparison to the fiscal year 2017, during the same time, the income had increased from $ 212.5 million which was 4.7 %. The adjusted EBITDA for the first half of the fiscal year 2018 was 25.2 percent of the total operating revenue amounting to $ 730.5 million in comparison to the 10.9 % that represented $ 490.0 million for the same period in the fiscal year 2017 (Baylor Health Care System, n.d).
The net operating revenue of the organization for the first half of the fiscal year 2018 increased by $324.5 million representing 7.2%, from $ 44891 in 2017 to $ 4813.6 million. The net care revenue for the patient and the expenses related to bad debts of the patients increased by $ 301.0 million representing 7.8 per cent from to $4140 million in the first half of the the fiscal year 2018 from $ 3839.4 million in the first half of the fiscal year of 2017 (Baylor Health Care System, n.d). These statistics reflect the higher volumes for the fiscal year 2018.
The value of premium revenue decreased from $ 476.9 million in the first half of the fiscal year 2017 to $412.3million in the first half of the fiscal year of the fiscal year 2018, which represented -13.5 percent. The decline in the premium revenue is explained by the decision to leave the public exchange market, Individual ACA, which led to the organization losing about 42, 500 members that have subscribed to this product in the first six months of the fiscal year 2017.
The combined operating expenses of BSW Holding for the first six months of the fiscal year 2018 increased by 3.6% amounting to $ 153. 7 million compared to $4276.5 million that was recorded in the first half of the fiscal year 2017 (Baylor Health Care System, n.d). Expenses on wages, salaries, and employee benefits increased to $2222.2 million which was by 4.1% amounting to $.5 million in the first half of the fiscal year 2018, from $ 21337 million for the first six months of the fiscal year 2017. The rise was estimated as 46.2 % and 47.5% of the total operating revenue for the first half of the fiscal year 2018 and 2017 respectively. Wages, salaries and employees’ benefits represented 49.9% and 50.2% of the expenditure of the organization for the first six months of 2017 and 2018 respectively. The expenditure on other operating expenses and supplies rose by 6.9% or $ 118.1 from $1700.6 in the first six months of the fiscal year 2017 to $1818.7 in the first six months of the fiscal year 2018, which represented 27.9 % and 37.8 % for the first half of the fiscal year 2017 and 2018 respectively (Baylor Health Care System, n.d). The supplies and operating expenses for the first half of the fiscal year 2017 and 2018 represented 39.8% and 41.1% of the total expenses respectively.
Current Metrics to Assess Financial Performance
The liquidity of BSW Holding includes unrestricted investment and cash that increased to $ 4.5 billion as at 30 June 2017 to $ 4.7 billion as at 31 December 2017 after net gains in trading and investment of $ 187.6 million and capital expenditure of $ 218.6 million. Unrestricted day cash at hand increased from 194.2 days as at 30 June 2017 to 204. 7 days as at 31 December 2017. Days cash on hand totaled 241.5 days at 31 December 2017 in comparison to 22.7 days at 30 June 2017 (Baylor Health Care System, n.d). The capitalization to debt ration reduced from 40.0 % at 30 June 2017 to 38.4% at 31 December 2017. The total assets for the organization increased from $11.1 billion at 30 June 2017 to $11.9 billion at 31 December 2017.
The BSW Holding System runs five foundations that include the Irving Healthcare Foundation, Scott & White Healthcare Foundation Brenham, Baylor Health Care System Foundation, and All Saint Health Foundation. The total assets of the foundations have increased to $ 7.1 billion at 31 December 2017 from $ 6.7 billion at 30 June 2017.
Financial Issues of the Greatest Concern
Among the main financial issues of BSW Holding is revenue. This issue represents the amount that the organization receives from all its operations and it is among the basic points in determining the profitability, viability, and sustainability of the organization in the market. The issue is important in determining the growth patterns of the organization and gives information to the investors on the viability to invest in the company. For example, flat or declining revenues have implications of limited opportunities for the growth of the company and its possibility to dissolve.
Possible Areas of Financial Performance Improvement
BSW Holdings needs to improve the management of its operating expenses. The Salaries, wage, and employees benefits account 46.2% of the total operating expenses, and the expenditure has been rising, which reduces the revenue for the organization. The company can hire more independent contractors to work on a temporary basis instead of hiring long-term employees. This strategy can be effective in reducing the employee’s benefit and overall expenditure on operating expenses. The company can also implement a non- monetary compensation programs to reduce the turnover on employees while maintaining their motivation to work.
References
Baylor Health Care System. (n.d). Quarterly Disclosure Report for the Six Months Ended December 31, 2017 (Unaudited)
Discussion/Assignment
