The breakeven point (PDE) seen from the financial perspective is that quantity of production sold at which total income equals total costs, that is, the quantity of production sold that results in $ 0 of profit. Once the balance point has been defined, the purpose of this project is to apply this concept in the health sector, to know the current economic situation of the Regional Hospital “Dr. Valentín Gómez Farías ”, based on the mission, vision and objectives of the organization as well as the integration of financial planning to avoid situations of lack of liquid financial resources,that may be detrimental to the achievement of the organization's objectives and allow the necessary financial resources to be available to take advantage of the business opportunities that may arise.
Development
This integrating project will demonstrate that a public health sector establishment has various investment and financing options. The investment consists of the placement of money in a company or in the case that it is financial, securities are acquired in order to increase it through the company's profit or the behavior of the value in the market. Investments involve risk, but also opportunities to make a profit or return. The risk in an investment implies that the capital is not returned, that some loss is generated in it, or that the gain is not expected; but if the investment is successful, the benefits can be very profitable.
Financing sources and funds in the public health system in Mexico are governed by the Social Protection System in Health (SPSS). The SPSS, as a source of financing, acts through a tripartite system (social quota, federal solidarity contribution and state solidarity contribution) through these actions the financial structure of the IMSS, ISSSTE and SSA is approved, with the participation of the National Commission for Social Protection in Health (CNPSS).
The balance point tool will be used, performing the following steps:
- Define costs Classify costs in Variable Costs (CV) and Fixed Costs (CF) Find the cost of a unit variable Apply the equilibrium formula (P x U) - (Cvu x U) - CF = 0. Check results Analyze breakeven point.
Where:
- P: unit selling price U: break-even units, that is, units to sell so that revenues are equal to costs Cvu: unit variable cost CF: fixed costs.
The result of the formula will be in physical units, if we want to find the equilibrium point in monetary units, we simply multiply the result by the sale price.
I. Description of the hospital
- Definition of the Hospital at its corresponding level or work center
Regional Hospital “Dr. Valentín Gómez Farías ”is a 3rd-class medical care hospital. Level, which is located in Zapopán; Jalisco Mexico. Hospital description
The Regional Hospital “Dr. Valentín Gómez Farías ”has the following services 24 hours a day (Illustration 1):
Location of the plant The Regional Hospital “Dr. Valentín Gómez Farías ”is located at Avenida Soledad Orozco 203, El Capullo, 45100 Zapopan, Jal. (Illustration 3)
II. Hospital organization chart
III. Organizational culture of the Hospital or work center
- Mission. Contribute to satisfying levels of comprehensive well-being of workers at the service of the State, pensioners, retirees and rightful family members, with the effective and efficient granting of insurance, benefits and services, with careful attention, respect, quality and always complying with institutional values of honesty, legality and transparency. View. Position ISSSTE as the institution that guarantees the comprehensive protection of Federal Public Administration workers, pensioners, retirees and their families according to the new demographic profile of entitlement, with the granting of insurance, benefits and services in accordance with the regulations current, under standardized codes of quality and warmth, with financial solvency, which allow the generation of values and practices that promote the sustained improvement of well-being, quality of life and the development of human capital. Values. Responsibility. Social Commitment. Quality. Respect. Honesty.
IV. goals
- Reduce waiting times by 20% in one year to be seen in Internal Medicine the first year Increase the staff by 60% the first year in Internal Medicine in the first year Serve 100 patients per shift in Internal Medicine the first year
V. Finances in the Service establishing the balance point:
a) Equipment, Facilities and Technology
Facilities: 3 floors with the following measurements, length: 15m, width: 2m and height: 2.3m
Furniture (Illustration 5):
Personnel (Illustration 6):
Technology: 9 personal computers, 3 printers, printing sheets and medical software.
To comply with the reduction of waiting times of 20% in Internal Medicine and attend 100 patients per shift, it will require the furniture and personnel previously described in Figures 5 and 6.
b) The investment and financing options available to health facilities
The ISSSTE, its budget for 2019 is (323 billion pesos), The Director General of the Institute of Security and Social Services of State Workers (ISSSTE), Luis Antonio Ramírez Pineda, reported that this year the agency will have a budget (social contribution, federal solidarity contribution and state solidarity contribution) of 323 billion pesos, of which 75 percent is allocated to pensions, that is, 226 billion pesos guaranteed to one million 100 thousand pensioners and retirees and the remainder for salaries, technologies, furniture and medicines of the ISSSTE.
c) Payroll budget
Table 1. Budget of Human Resources per shift in internal medicine of the Regional Hospital "Dr.Valentín Gómez Farías".
d) Cash flow
See (Illustration 7)
e) Income statement
f) Profitability threshold or breakeven point
The Regional Hospital “Dr. Valentín Gómez Farías ”receives the budget from the federal government, a simulation will be carried out to obtain the balance point of the organization as if it were a private hospital for educational purposes.
First we have to identify the formula we need (Illustration 8), which is the following:
Where:
Unit selling price: $ 5,000 for each patient.
Total fixed costs: $ 413,000.00 per month (Labor + Indirect expenses) = $ 108,000 + $ 305,000.
Variable costs: $ 3000 per patient.
The equilibrium point obtained is (Illustration 9).
The PE: 207 patients per month, since they are only managed in whole units.
And to obtain the equilibrium point in Pesos see (Illustration 10).
Formula used in Excel (Illustration 11).
Margin of C. Percentage, see (Illustration 12).
Graphical breakeven point (Illustration 13).
Results
As observed in the breakeven graph (Illustration 13), the total costs have a greater impact with a low number of patients, it can be seen that 50 patients have a total cost of $ 500,000.00 but when the number of patients is doubled, the costs they amount to $ 700,000.00 for 100 patients.
And with 207 patients it is possible to obtain the equilibrium point, where there are no losses or gains, as the number of 207 patients attended is exceeded; there is a trend of stability in total costs that is around $ 1,100,000.00
Discussion
The financial data is information carefully cared for by the organizations, so we cannot make an objective comparison with respect to another hospital on our balance point and on the other services offered at the Regional Hospital “Dr. Valentín Gómez Farías ”does not have access to this information.
Conclusions
- Opportunity
- Capacity to serve 110 patients with enough staff to provide quality care. Strategically located in the metropolitan area with an approximate 5 million inhabitants.
- The entry of new competitors in both the private and public sectors. Low seasons where the goal of reaching 207 patients is not met.
- Competitive prices in third-level medical care, internal medicine area High stability in total costs once the 207 patients have been treated Strategically located in the metropolitan area with approximately 5 million inhabitants Capacity to attend 110 patients with sufficient staff to provide quality care.
Summary
The purpose of this integrating project is to apply finance at the break-even point in the “Dr. Valentín Gómez Farías ”, Zapopan; Jalisco, in the area of Internal Medicine, the UAM (Drug Supply Unit) to fulfill the purposes of survival and development, human well-being. The scope topics in this project range from financial management, financial alternatives for health institutions, and short-term financing of health institutions.
Keywords: Regional Hospital, finance, breakeven point, human well-being.
Abstract
The purpose of this integrative project is to apply finances at the point of equilibrium at the Regional Hospital «Dr. Valentín Gómez Farías «, Zapopan; Jalisco, in the area of Internal Medicine, the UAM (unit of supplies of medicines) to fulfill the aims of survival and development, human welfare. The topics of scope in this project range from financial administration, financial alternatives for health institutions and short-term financing of health institutions.
Keywords: Regional Hospital, finances, point of equilibrium, human welfare.
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