Assignment Detail:-
Assessed Learning Outcomes
LO2: Analyse and evaluate financial statements, budgets, and forecasts, and apply financial management principles to healthcare organisations to make informed and ethical financial decisions.
LO4: Analyse financial and governance challenges in healthcare organisations and formulate solutions for overcoming these challenges.
Please read the following scenario:
You have been appointed as a financial consultant to an NHS Trust Hospital in London. The hospital is planning to launch a bariatric (weight loss) surgery unit offering procedures like gastric bypass and gastric sleeve surgeries for both NHS and private patients. You have been asked to consolidate and analyse the plan, perform financial forecasting and suggest innovative strategies to optimise costs and maximise revenue while considering ethical and public concerns. Your report should include an appraisal of the proposed project, effective ways of obtaining funding (if necessary) and a recommendation to the hospital.
Background
According to the King’s Fund briefing (2021) on “Tackling Obesity”, obesity rates in England are high and rising and weight loss surgery is becoming increasingly popular. The frequency and pace of increase are not evenly distributed throughout society and there is a significant systemic link between obesity and deprivation. Obesity rates are also greater in women than men, as well as in several ethnic minority groups as compared to the white British population. Recent governments have attempted a fragmented approach to combating obesity and while some specific initiatives have been helpful, this method falls short of the cross-cutting population health approach that is required.
The following key messages are shared in the briefing (p.1).
After reviewing the report, the CEO of the NHS Trust Hospital engaged with the C-level management team and suggested the following preliminary budget and cost plan for the planned private weight loss surgery unit offering procedures like gastric bypass and gastric sleeve surgeries. While these surgeries can significantly improve health outcomes, they are expensive and often seen as controversial when offered through public healthcare systems. There are concerns about prioritising resources, accessibility and the perception of promoting surgical solutions over lifestyle changes.
Checkout Now: Health and Social Care Dissertation Topics
Currently, to qualify for the NHS-funded weight loss surgery, individuals must be severely obese, with a BMI of more than 40 or have a BMI between 35 and 40 with two or more obesity- related chronic diseases. They will also need to agree to lifestyle and diet changes and regular check-ups after surgery. NHS-funded weight loss surgery requires previous unsuccessful or unsustainable attempts at weight loss through diet and physical activity.
The hospital plans to initiate the following setup: A medical building will be leased for a five- year term, with an initial payment of £1 million will be paid immediately and £1 million per year for the next five years. The unit will purchase numerous pieces of equipment as an initial set- up to deliver high-quality treatment, which will cost £25 million. The hospital seeks to treat 500 NHS and 250 private patients a year.
The NHS Foundation Trust will cover the initial cost out of pocket, but in the succeeding five years will also receive £115 million in total from the DHSC will be distributed equally over the period.
Initial cost:
Initial lease payment and equipment costs: £26 million (£1 million + 25 million, respectively)
Ongoing operational costs Leasing: £1 million per year Insurance: £0.1 million per year Utilities: £0.5 million per year Consumables: £1 million per year Maintenance: £0.3 million per year Medical supply: £1.3 million per year
Data management (security/privacy) and IT Infrastructure: £0.6 million per year RsD, collaboration and partnership costs: £1 million per year
Training and education costs: £1.2 million per year Patient and public education: £0.8 million per year Other running costs: £0.6 million per year
Average cost per NHS patient: £8,000 Average cost per private patient: £12,000
Estimated staffing costs:
Surgeons and medical staff: £3 million per year Nurses and support staff: £2 million per year
Administrative and management staff: £1 million per year
Total treatment revenues (250 patients): £4 million
The required rate of return: 3.5% Inflation: 0%
You are required to prepare a report, using the information provided above covering the following areas:
In writing your report you are expected to use theoretical tools that you have studied during the course and from your research and make reference to credible evidence. The format for a report is available on the VLE.
At least 8 independently researched academic sources from the ARU library are expected.
Atrill, P. s McLaney, E. (2022). Accounting and Finance for Non-Specialists, 12th ed. Pearson.
Bandy, Gary (2024). Financial Management and Accounting in the Public Sector, 3rd edition, Routledge, London. Available through Kortext and/or ARU Library.
Brigham, E.F. and Houston, J.F., (2021). Fundamentals of financial management: Concise. Cengage Learning.
Bragg, S. M. (2017). Budgeting: A Comprehensive Guide, 4th ed. Accounting Tools Incorporated.
Dyson, J.R. and Franklin, E. (2020) Accounting for Non-Accounting Students, 10th edition, Pearson
Frost, S. M. (2024). Financial Accounting and Reporting for Non-Accounting Students (1st ed.). Kogan Page.
HFMA Introductory Guide to NHS Finance (2023). HFMA
Kimmel, P. D., Weygandt, J. J. s Mitchell, J. E. (2021). Financial Accounting: Tools for Business Decision Making, 10th ed. Wiley.
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