Answer Number 2:

The Vice president of clinical operations in Pediatrics explicitly explains that the Pediatrics department is not the money generator for the North Lake Medical Center. The reimbursement system is currently based on the Diagnosis-related group (DRG), and the Pediatrics cases are lower than the cases in Surgery and medical. The management of the hospital doesn’t allocate the expenses by the case weights, and that is favorable for the pediatrics department.

On the other hand, the vice chairman of the nursing department is keen to improve the quality of service they are providing and are not ready to reduce the nursing staff which might result inincreasedexpenses. However, the nursing department is willing to reduce the average length of stay as much as possible without compromising on the level of quality of their services.

By evaluating the Exhibit one, it can be seen that the Pediatric Division will make theloss of $15,706, the primary reason for this loss might be the high operating cost. Exhibit two shows the utilization history that splits the resources that will be used to provide care to the patient of the diagnosis related group class.

Answer Number 3:

Chemistry lab prepares its budget by the chemical products requirement of different departments. Chemistry lab budget is entirely based on the needs of the hospital. There are a lot of needforchemical products in medical centers such as chloroform, distilled water and other products. The chemical products are also essential in various kinds of surgeries; the compoundsare also used in designing and manufacturing almost all kinds of medicines. Exhibit three shows the different chemicals that the hospital required.

Column A shows the chemical that will be needed in a particular case while column B shows the original quantity of the chemical that is necessary for the whole hospital in a given period. Column C shows the revised amount per case while column D shows the changedvolume that will be required for all cases in aparticular period. On the other hand, the column E and F depict the percentage change in the chemical requirement for a particular instanceanda specifictime.

The head of the chemistry lab assesses the needs, and they also consult with the other departments beforefinalizing their budgets. For example, surgery or medical unit requires some chemicals to perform their operations; they will collaborate in advance with the chemistry lab personals regarding their needs.Chemistry department operates under the administration department which is responsible for fulfilling the chemical requirements of the hospital.

Answer Number 4:

Various options are available to responsibility centers which are essential for the achievement and completion of the contribution objectives such as reducing the operating expenses and the other option is to maximize the revenue by acquiring more patients. However, there are certain implications and consequences of both options which can be favorable or negative.

Firstly, if the responsibility centers reduce operating expenses such as nursing staff or reducing the facilities that are provided to the patients, it may undermine the quality of service that the hospital is providing………………

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