| Course | HIM 660 HIM Strategic Planning and Financial Management |
|---|---|
| Module | Module 6 |
| Paper type | graduate short paper analyzing an HIM department's operating budget variance |
| Length | About 1,030 words, 6 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | MS Health Information Management |
| Updated | October 2026 |
Free sample paper for HIM 660 Module 6
Over Budget, or Over Volume? A Variance Analysis of the Fiscal 2026 Health Information Budget at Kanawha Ridge Health
[Student Name]
Southern New Hampshire University
HIM 660: HIM Strategic Planning and Financial Management
Module Six Short Paper
[Instructor Name]
[Date]
The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.
Over Budget, or Over Volume? A Variance Analysis of the Fiscal 2026 Health Information Budget at Kanawha Ridge Health
When the record and coding department of the composite Kanawha Ridge system closed fiscal year 2026, its operating report showed spending of $4,920,000 against a budget of $4,700,000, an unfavorable variance of $220,000, or 4.7%. On its face, that is a department over budget. A variance, however, is a question rather than a verdict. This paper examines each budget line, separates the effects of volume from the effects of price and staffing mix, adjusts the labor lines with a flexible budget and uses the findings to build the fiscal 2027 budget.
The Static Budget Variance
Table 1 compares budget and actual results for the six lines of the department's budget. This first view holds the department to its original plan no matter how many discharges it ended up coding.
Table 1. Fiscal 2026 Operating Budget and Actual Spending
| Line | Budget | Actual | Variance | Percent |
|---|---|---|---|---|
| Employee salaries and benefits | $3,420,000 | $3,186,000 | $234,000 favorable | 6.8% |
| Contract coding | $620,000 | $1,084,000 | $464,000 unfavorable | 74.8% |
| Release of information vendor | $140,000 | $152,000 | $12,000 unfavorable | 8.6% |
| Software and maintenance | $410,000 | $418,000 | $8,000 unfavorable | 2.0% |
| Education and credentials | $45,000 | $21,000 | $24,000 favorable | 53.3% |
| Supplies and other | $65,000 | $59,000 | $6,000 favorable | 9.2% |
| Total | $4,700,000 | $4,920,000 | $220,000 unfavorable | 4.7% |
Note. Fiscal year July 2025 to June 2026. Source: system finance department.
What Each Line Shows
The two largest variances are linked. Employee salaries and benefits came in $234,000 under budget because five coding positions were vacant for much of the year. Contract coding came in $464,000 over budget because the department hired contract coders to cover the same work. Taken together, the two lines were $230,000 over their combined budget of $4,040,000. The department did not spend more on coding because it was careless; it spent more because each hour of coding cost more when bought from a contractor, about $68 an hour against roughly $46 for an employed coder including benefits.
The release of information line rose $12,000, or 8.6%, because request volume grew after the patient portal began offering a request form. Software costs rose slightly with a contracted price increase. Education spending was $24,000 below budget, which looks favorable but is a warning: coders postponed continuing education and credential renewals while the team was short staffed, and the deferral will show up later as cost or as risk. Supplies were slightly under budget.
Adjusting for Volume
The budget assumed 18,500 discharges across both hospitals. The system actually discharged 19,300, which is 4.3% more. Much of the department's work, especially coding, rises with discharges, so a fair comparison adjusts the labor budget to the volume actually served. A flexible budget does this by scaling variable costs to actual activity. Treating the combined employee and contract coding lines as variable, the flexible budget at 19,300 discharges is about $4,214,700. Actual labor spending was $4,270,000, so the volume-adjusted variance is about $55,300, or 1.3%, rather than $230,000. Most of the apparent overrun was the cost of doing more work.
A second view tells the same story. Department cost per discharge was budgeted at $254.05 and came in at $254.92, a difference of less than one dollar per patient. The department served more patients for almost the same unit cost, even while paying contract rates for a share of its coding.
What the Variance Does Not Show
Cost per discharge hides the effect of the department's performance on revenue. Kaplan and Anderson (2004) proposed costing work by multiplying the minutes a task consumes by what each minute of the people and equipment doing it costs, and Tseng et al. (2018), applying that method to billing, found that each inpatient stay required more than an hour of billing and insurance work. By that logic, the true cost of the department's slow coding and high denial rate lies partly outside its budget, in rework by revenue cycle staff, delayed cash and written-off claims. A budget report that ends at the department's own lines can show a department on target while the system loses money because of it.
Building the Fiscal 2027 Budget
The fiscal 2027 budget should start from a volume forecast rather than last year's budget. Discharges grew about 2% a year over the previous five years, with 2026 above trend because the community hospital added a hospitalist group. A simple forecast that combines the long-term trend with the new baseline suggests about 19,700 discharges, and Hyndman and Athanasopoulos (2021) recommend checking any such forecast against a naive version, here last year's volume, and reporting a range rather than a single number. The budget will therefore plan for 19,700 discharges and show the cost at 19,300 and 20,100 as well.
Within that volume, the budget assumes that three of the five vacant positions are filled by October and the remaining two by January, which moves about 12,000 contract hours to employed coders at a saving of roughly $22 an hour. Contract coding is budgeted at $420,000, falling to the strategic target of $300,000 in fiscal 2028. Education is restored to $45,000 plus $10,000 for overdue credential renewals.
Recommendations for Reporting
The variance report itself should change. Today the department receives a single monthly page from finance that shows static variances only, which invites the wrong conversation every month. The writer recommends three additions. First, a flexible budget column for coding labor, so that leaders see the variance after volume is accounted for. Second, a combined line for employed and contract coding, with hours and cost per hour, so that the trade between the two is visible rather than hidden across two lines. Third, a short note each month explaining any variance above 5%, written by the department rather than inferred by finance. These changes cost nothing but time, and they would let the chief financial officer judge the department on the work it controls.
Conclusion
Read as a static report, the department overspent by $220,000. Read with volume and staffing mix in view, it served 4.3% more discharges at almost the same cost per discharge while paying a premium for contract labor it would rather not use. The lesson for planning is that the department's budget problem is a staffing problem, and the fiscal 2027 budget is built to solve it.
References
Hyndman, R. J., & Athanasopoulos, G. (2021). Forecasting: Principles and practice (3rd ed.). OTexts. https://otexts.com/fpp3/
Kaplan, R. S., & Anderson, S. R. (2004). Time-driven activity-based costing. Harvard Business Review, 82(11), 131-138.
Tseng, P., Kaplan, R. S., Richman, B. D., Shah, M. A., & Schulman, K. A. (2018). Administrative costs associated with physician billing and insurance-related activities at an academic health care system. JAMA, 319(7), 691-697. https://doi.org/10.1001/jama.2017.19148
What the HIM 660 Module 6 instructions ask for
The sixth module of HIM 660 is about budgets. Its short paper, typically three or four pages in APA 7, asks you to analyze a department's operating budget against actual results, explain the variances and use what you learn to plan the following year. Present budget, actual, dollar variance and percentage for each line, ideally in a table. Explain the cause of each significant variance rather than labeling it favorable or unfavorable. Adjust for volume with a flexible budget or cost per unit, since activity changes can explain much of a variance. Note what a departmental budget leaves out, such as revenue effects elsewhere. Finish by building next year's budget from a volume forecast and the department's staffing and strategic plans.
How this HIM 660 Module 6 budget short paper example is built
Kanawha Ridge Health's HIM department spent $4,920,000 against a $4,700,000 budget. Table 1 shows salaries $234,000 under and contract coding $464,000 over, two sides of five vacancies filled at about $68 an hour instead of $46. Education's $24,000 saving is flagged as deferred risk. A flexible budget at 19,300 discharges instead of 18,500 shrinks the labor variance from $230,000 to about $55,300, and cost per discharge moves less than a dollar. Kaplan and Anderson's time-driven costing and Tseng and colleagues' billing estimates show the costs the department's lines omit. The HIM 660 paper ends with a fiscal 2027 budget planned at 19,700 discharges, using Hyndman and Athanasopoulos's advice on ranges.
Where the HIM 660 Module 6 rubric puts the points
HIM 660 budget papers are usually graded on accurate variance calculations, correct labeling of favorable and unfavorable results, explanations that identify causes, use of a flexible budget or unit cost to separate volume from performance, recognition of what the budget leaves out and a forward budget grounded in a forecast and the strategic plan. Strong papers notice when a favorable variance hides a problem, such as deferred training, and when two lines offset each other. Graders value clear tables with sources and periods. Forecasts that show a range and state their assumptions earn more than single numbers. Precise financial vocabulary and correct APA 7 citations for costing and forecasting sources round out the higher ratings.
HIM 660 Module 6 help: the mistakes that cost points
Variance papers in this course lose credit for math errors, for calling every overrun a failure, for skipping the volume adjustment, for treating favorable variances as automatically good or for building next year's budget by adding a percentage to this year's. Others forget that labor substitution, employees for contractors, shows up on two lines. If your module provides its own budget figures, a capital budget or a revenue budget instead of an operating budget, send the data and prompt so the analysis uses them exactly. Note how your organization defines fixed and variable costs if you know. Our HIM 660 budget papers explain causes, adjust for volume and build forward from a forecast.
Get HIM 660 Module 6 written to your instructions
Send the HIM 660 Module 6 prompt with the budget and actual figures you have been given or your department's own report. The paper will calculate and explain every variance, adjust for volume with a flexible budget, flag what the budget hides and build next year's budget from a forecast, finished within two days and free the first time. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
More HIM 660 papers and related MS Health Information Management samples
- HIM 660 Module 1 Discussion: Why an HIM Department Needs Its Own Plan
- HIM 660 Module 2 Environmental Analysis Short Paper: Forces Outside and Inside the Department
- HIM 660 Module 3 Final Project Milestone One: A Strategic Assessment of HIM and Revenue Cycle Performance
- HIM 660 Module 4 Discussion: Payment Models and What They Ask of HIM
- HIM 660 Module 5 Final Project Milestone Two: Goals, Initiatives and a Balanced Scorecard
- HIM 660 Module 7 Final Project Milestone Three: The Financial Case for Three Initiatives
- HIM 660 Module 8 Journal: The Patients Behind Denied Claims
- HIM 660 Module 9 Final Project: The HIM Strategic and Financial Plan
- HIM 660 Module 10 Reflection: What Planning With Money Taught the Writer
- HIM 540 Module 9 Final Project: The Information Governance Program
- HIM 600 Module 2 Fraud and Abuse Short Paper: Three Laws, Three Risks in One Practice
- HIM 510 Module 9 Final Project: The Policy Package and a Professional Identity Statement
- HIM 530 Module 7 Final Project Milestone Three: Incident Response and Breach Notification
HIM 660 Module 6 questions, answered
Where can I find a free HIM 660 Module 6 Budget Short Paper sample?
The full HIM 660 Module 6 paper is on this page, with a line-by-line variance table, a flexible budget adjustment and a forecast-based budget for the next fiscal year.
What is a flexible budget?
It reprices the variable lines at the volume the department really handled, so spending is judged against the work delivered instead of the work forecast a year earlier.
Is a favorable budget variance always good?
No. Spending less than budget can reflect vacancies, postponed training or delayed maintenance that create costs or risks later, so each favorable variance needs an explanation.
Why do contract coders create budget variances?
When vacant positions are covered by contractors, salary lines come in under budget while contract lines go over, and the higher hourly rate makes the combined cost rise.
How should next year's HIM budget be built?
Start from a forecast of volume, such as discharges, show a range, then apply staffing plans, known price changes and strategic initiatives rather than adding a flat percentage.