Overhead Costs Essay

530 words - 3 pages

Decide whether and how to include overhead costs.
Reducing overhead costs can save no- profit hospitals thousands of dollars. St. Jude is a non-profit hospital that treats all children regardless of health insurance or financial status. Since no child is ever denied treatment, any type of revenue is welcomed and greatly appreciated. “The daily operating cost for St. Jude is $1.6 million, which is primarily covered by public contributions. On average, 5,700 active patients visit the hospital each year, most of whom are treated on an outpatient basis” (St. Jude Children Research Hospital, 2013). The overhead costs of such an organization are significant and can exceed 35% of total hospital costs. Overall, the hospital’s overhead costs may be caused by volume, capacity, and complexity. In other words, ...view middle of the document...

“Under the partnership, Delta Air Lines will be designated the premier travel partner of St. Jude and will provide the hospital with deep discounts that St. Jude will use as it books flights for families coming to Memphis for treatment. By saving money on the flights, St. Jude will have additional funds to earmark for other programs such as research and treatment” (St. Jude Children Research Hospital, 2013). One of the major contributions comes “Thanks and Giving” which is an unparalleled coming together of celebrities, media, retail and corporate partners that asks consumers to "Give thanks for the healthy kids in your life, and give to those who are not" (St. Jude Children Research Hospital, 2013) With those extra donations, the hospital can cover costs for treatment, travel, food, and lodging for each patient and a family member. By having that extra assistance, the hospital can cut down on travel and transportation expense. To cover medical treatments and medications, the hospital’s work is supported through funds raised by ALSAC. “ALSAC covers all costs not covered by insurance for medical treatment rendered at St. Jude Children's Research Hospital”(St. Jude Children Research Hospital, 2013). Overall, St. Jude’s has revenue coming in through numerous sponsors and funders allowing for extra leverage in funding many areas, which evidently will lower overhead costs for the hospital. This will allow St. Jude to be able to have the ability to include overhead costs within the budget.

St. Jude Children Research Hospital, (2013), https://www.stjude.org

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