Cost Management
Essay title: Cost Management
Introduction
The chief Administrator of an Uptown Clinic, Dr. Stephanie White, is concerned about the dilemma of coping with reduced budgets next year and into the foreseeable future. This clinic is a community mental health agency but she wants to increase demand for services along with the budget cuts. In order to plan this change she must first identify where costs can be cut or reduced but by still keeping the agency functioning. With the data given to me from the past year I will provide her with a dollar range of costs to reduce the budget. Then I will cut $94,000 in cost along with the priorities those cuts can be made without impact on operations or the quality care of the serves they provide. In conclusion I will provide my thoughts and views on how she can prepare for this reduced budget.
Cost Management
Data set:
Program Area
Administration
Costs
Revised Costs
Salaries:
− Administrator
60,000
1,000
59,000
− Assistant
35,000
1,000
34,000
− Two secretaries
42,000
21,000
21,000
Supplies
35,000
-0.25
8,000
27,000
Advertising & Promotion
9,000
-0.25
2,000
7,000
Meetings/dues
14,000
-14,000
14,000
Purchased Services:
− Accounting and billing
15,000
2,000
13,000
− Custodial
13,000
1,000
12,000
− Security
12,000
12,000
− Consulting
10,000
1,000
9,000
Community Mental Health Services
Salaries (2 social workers)
46,000
2,000
44,000
Transportation
10,000
5,000
5,000
Outpatient Mental Health Treatment
Salaries:
− Psychiatrist
86,000
1,000
85,000
− Two secretaries
70,000
35,000
35,000
Total Costs
Total Cuts
Revised Total Costs
457,000
94,000
363,000
Worst case analysis:
I know that administration can not function efficiently without the assistant and at least one secretary. They each can pick up half of the load from that loss. The meetings can go, absolutely no reason for that kind of expense which should be coming out of their own pockets. Advertising and supplies can be cut by a ј. Going to cut transportation in half because bigger vehicles or car pools will save some money and carpooling services come with benefits that cover most of the costs accrued. I really find it hard to believe that a Psychiatrist needs two secretaries so will cut one of those too. After doing all those cuts I still had to cut 11,000 more dollars and decided that it would