Chapter One
BUDGETING FOR PHYSICIAN PRACTICES
Marci S. Thomas
Objectives
This chapter will help the reader to
Understand the purposes and advantages of budgeting.
Describe the process of budgeting.
Prepare a budget for a physician practice.
Each year physician practices go through the all-important exercise of planning
for the coming year's activity. As more fully discussed in Chapter Sixteen, this
should be a joint activity between practice management and the physician-owners.
The budget is the tool that group practice managers use to translate the practice's
goals and objectives for the year into dollars. The budget also serves as a vehicle
to communicate financial targets to physician-owners and other stakeholders in
the practice.
To the wise practice manager the budget is not just a financial plan. It is also a
mechanism for monitoring and managing the activity of the practice on a periodic
basis. Some practices compare actual results to the budget on a monthly basis. Others
do it more or less frequently. The comparison of actual results to budgeted amounts
enables practice management to
Focus on where the practice is going and what it will take to get there.
... read full excerpt from Essentials of Physician Practice Management ebook
