St george hospital: Flexible budgeting, volume variance, and balanced scorecard performance measurement

Abstract

This case deals with funding, budgeting, and performance measurement in public hospitals. Data from the Orthopedic Unit at St George Hospital is used to examine efficiency and effectiveness of management in meeting budgeted targets. The Orthopedic Unit provides treatment for two common diagnosis-related group (DRG) treatments: hip replacement surgery, commonly performed on older patients with arthritic pain or hip fractures; and arthroscopy surgery for soft tissue knee injuries, commonly a result of sporting injuries in the younger population. As a business consultant, you will help Vera Jones, a newly graduated accountant, to develop a flexible budget, and calculate price, cost, and patient..