| Course | HS440 Finance for Health Care |
|---|---|
| Unit | Unit 5 |
| Paper type | Operating budget build |
| Length | About 560 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Health Science |
| Updated | October 2026 |
Free sample paper for HS440 Unit 5
Five Assumptions Before Any Dollar: A Unit 5 Operating Budget Build for a Composite Endoscopy Center
[Student Name]
Purdue University Global
HS440: Finance for Health Care
Unit 5 Operating Budget Build
[Instructor Name]
[Date]
The center, its assumptions and every figure are composite; the finance texts and the screening recommendation cited are real.
Assumptions
Operating days: 250. Rooms: 2. Slots per room-day: 12. Available slots: 6,000. Fill rate: 96 percent, slightly below last year's 97, because two physicians plan longer leave. Cases: 5,760. Payer mix: Medicare 39 percent, commercial 33, Medicaid 22, self-pay 6. That gives 2,246 Medicare, 1,901 commercial, 1,267 Medicaid and 346 self-pay cases. Payment per case: Medicare 653 dollars, after a 2 percent update; commercial 1,215, under a renegotiated contract; Medicaid unchanged at 380; self-pay 95. Variable cost per case: 172 dollars, last year's 168 plus supply price increases.
Demand is not the constraint. Screening guidance now recommends colorectal cancer screening starting at age 45 rather than 50 (US Preventive Services Task Force, 2021), and the center's wait for a screening slot is already about a month.
Stating assumptions first lets the finance committee challenge the inputs rather than the arithmetic. If the committee believes the fill rate will be higher or the commercial contract weaker, it can change one line and see the result.
Revenue Schedule
Medicare: 2,246 cases times 653, or 1,466,638 dollars. Commercial: 1,901 times 1,215, or 2,309,715. Medicaid: 1,267 times 380, or 481,460. Self-pay: 346 times 95, or 32,870. Total net patient revenue: 4,290,683.
Expense Schedule
Variable: 5,760 cases times 172, or 990,720.
Fixed and step-fixed, with changes from last year: Staffing: 1,081,500, up 3 percent for a wage increase. Management and administration: 432,600. Rent: 370,800, under a 3 percent escalator. Scope service contracts: 319,000, under new contract terms. Depreciation: 410,000. Allocated hospital overhead: 685,000. Information technology and other: 248,000. Fixed total: 3,546,900.
Total expenses: 4,537,620.
Result
Net patient revenue of 4,290,683 less expenses of 4,537,620 gives a planned operating loss of 246,937 dollars.
The budget loses more than last year even though commercial payment rose, because fixed costs climb by 136,900 dollars while the center fills fewer slots.
Narrative
The loss is not a forecast error to be hidden. It follows directly from three assumptions: fixed costs rising with wages, rent and overhead; a slightly lower fill rate; and a payer mix that leaves average contribution at about 573 dollars a case. At that contribution the center would need about 6,191 cases to break even, more than its rooms can hold. The budget therefore shows that, without a change in mix, capacity or costs, the center cannot reach break-even this year (Finkler et al., 2019).
Sensitivity
Two assumptions matter most. Each percentage point of commercial mix that shifts to Medicaid lowers contribution by about 48,000 dollars. Each percentage point of fill rate adds or removes about 60 cases and roughly 34,000 dollars of contribution. Neither the update for Medicare nor the new commercial contract is enough to offset these two exposures, because commercial cases are fewer than they were two years ago and the fill rate is already near its ceiling. Both sensitivities are reported to the finance committee so it can see how far the result could move, a practice that turns a single budget figure into a range a committee can plan around (Pink & Song, 2020).
References
Finkler, S. A., Calabrese, T. D., & Smith, D. L. (2019). Financial management for public, health, and not-for-profit organizations (6th ed.). CQ Press.
Pink, G. H., & Song, P. H. (2020). Gapenski's healthcare finance: An introduction to accounting and financial management (7th ed.). Health Administration Press.
US Preventive Services Task Force. (2021). Screening for colorectal cancer: US Preventive Services Task Force recommendation statement. JAMA, 325(19), 1965-1977. https://doi.org/10.1001/jama.2021.6238
The Purdue Global HS440 Unit 5 instructions
The fifth unit typically asks you to build an operating budget for a department, stating volume, payer mix, rates and cost assumptions, then producing revenue and expense schedules and a short narrative. Budgets usually span two to three pages. Marks follow clearly stated assumptions, schedules that follow from them without hidden figures, a result that is explained rather than forced to break even, and a test of how far the result moves when the shakiest inputs change. Many sections reward linking assumptions to evidence, such as last year's fill rate or a contract change. Show every multiplication. Cite a finance text and any source behind a demand or rate assumption.
How this HS440 Unit 5 example is built
An assumptions section lists capacity, fill rate, payer mix with case counts, payment per case by payer and variable cost, and notes the screening guidance that keeps demand high. The revenue schedule multiplies cases by rate for each payer. The expense schedule gives variable cost and each fixed line with its change from last year. The result follows, and the highlighted sentence explains why the loss deepens. A narrative section ties the loss to three assumptions and computes the break-even volume, citing a finance text. A sensitivity section prices one point of mix shift and one point of fill rate, and a sentence explains how stating assumptions first helps the committee challenge inputs.
HS440 Unit 5 rubric: what earns full points
Operating budgets are generally graded on transparency of assumptions, accuracy of schedules, quality of the narrative and analysis of sensitivity. Transparency often weighs most, since a grader must be able to trace every figure to an input. Accuracy covers each multiplication and total. The narrative earns credit when it explains the result in terms of the assumptions, including a planned loss if that is what the inputs produce. Sensitivity points go to pricing the assumptions most likely to be wrong. Presentation includes labeled schedules and consistent rounding. A budget that forces a break-even by adjusting an unexplained line usually scores lower than an honest loss.
HS440 Unit 5 help from the desk
A common mistake is budgeting revenue from one average payment, which hides the payer mix assumption. Another is carrying last year's costs forward without any increase for wages or rent. Some students force the budget to break even by raising the fill rate above anything the department has achieved. Others leave out the narrative, so the result has no explanation. Rounding at each step can make totals disagree. If your budget is for another service, perhaps a sleep lab or a home health branch, share its capacity, mix and rates, and the schedules can be built from those inputs. Presenting the schedules without the assumptions panel forces the grader to reverse-engineer every figure.
Get an HS440 Unit 5 example written to your instructions
Budget builds depend on the case's inputs, so send the Unit 5 volumes, payment rates, staffing pattern and cost data, and include any template the section issued with the rubric. Assumptions are stated first, every line traces to one, and the narrative names the riskiest input. Delivery in 24-48h; no charge for a first custom sample. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More HS440 papers and BS in Health Science samples
- HS440 Unit 1: Payer Mix Discussion Post
- HS440 Unit 2: Financial Statement Review
- HS440 Unit 3: Cost Behavior Analysis
- HS440 Unit 4: Financial Ratio Analysis
- HS440 Unit 6: Variance Report
- HS440 Unit 7: Seminar Reflection
- HS440 Unit 8: Break-even Analysis
- HS440 Unit 9: Capital Request Memo
- HS440 Unit 10: Financial Management Report
- HS450 Unit 5: Strategic Goal Memo
- HS420 Unit 5: System Selection Comparison
- HS460 Unit 5: Stakeholder Register
- HS345 Unit 5: Sampling Distribution Exercise
HS440 Unit 5 questions, answered
Is it acceptable to submit a budget that shows a loss?
Yes, if the loss follows from stated assumptions and the narrative explains it. Hospital-owned departments sometimes budget losses the parent chooses to cover, and a realistic loss is more useful to a manager than a forced break-even. What loses marks is a loss that appears without comment, or one hidden by assumptions nobody could defend.
How should the fill rate be chosen?
From history and constraints. Last year the rooms filled 97 percent of slots, and the sample budgets 96 to allow for cancellations and a staff vacancy it names. A rate above the historical level needs a reason, such as a new referral source. Whatever the figure, stating it separately lets a reviewer test the budget at a different rate.
Why budget revenue by payer instead of using an average payment?
Because the payers pay very different amounts and their shares change. A single average hides the mix assumption, which is often the most consequential one in the budget. Building revenue payer by payer makes the mix explicit, lets the sensitivity strip price a one-point shift, and prepares the ground for the variance report that usually follows.
Where can I find a free HS440 Unit 5 sample paper?
You can read the full Unit 5 budget build here, with five stated assumptions and a planned loss explained in its narrative.
What is a sensitivity analysis in a budget?
A check of how much the result changes if one assumption, such as payer mix or fill rate, turns out different from the plan.