This IHP 450 Module 5 Milestone Two, written out in full, pairs a capital proposal outline with a departmental budget table covering two actual years and one projected year, plus the assumptions behind each projected line and what the history reveals about the department's finances. Searches like "ihp 450 module 5 assignment", "ihp450 module 5 final project milestone two" and "ihp 450 module 5 example" land here.
The IHP 450 Module 5 example, in full
Milestone Two: Proposal Outline and Adult Medicine Department Budget for Autonomous AI Diabetic Eye Exams
[Student Name]
Southern New Hampshire University
IHP 450: Healthcare Management and Finance
Module Five Final Project Milestone Two
[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.
Milestone Two: Proposal Outline and Adult Medicine Department Budget for Autonomous AI Diabetic Eye Exams
Part One: Proposal Outline
This outline is addressed to the chief operating officer of the three-site Tamarack Community Health Center, a composite organization, and summarizes the capital proposal to be presented in full at the end of the term.
Purpose and need
Raise the diabetic eye exam rate among the center's 2,350 adults with diabetes from 38 percent to at least 70 percent. Patients wait about four months for the closest eye practice taking Medicaid, a 40-mile drive, and those who lost Medicaid in the unwinding now face costs there they cannot pay.
Capital item
Three autonomous artificial intelligence retinal camera systems, one per site, at a total capital cost of 103,000 dollars including installation, record interfaces and training. The item was selected in Module 4 over outside referral and remotely read cameras using a weighted decision matrix. The system type was the first autonomous diagnostic system authorized by the Food and Drug Administration, after a trial in primary care offices where images could be graded for 96.1 percent of those photographed (Abramoff et al., 2018).
Alignment with mission, vision and values
The mission promises high-quality, affordable care regardless of ability to pay; point-of-care exams cost the patient nothing extra and remove the travel barrier. The vision of no one going without care is served directly. Of the four values, access and quality are advanced most, and stewardship is met because the item is expected to pay for itself.
Costs and benefits
Ongoing costs are a per-exam license of 25 dollars and 4,000 dollars a year in maintenance. Benefits are billable exams, the Medicaid plan's quality incentive of 60,000 dollars when the rate exceeds 60 percent, and earlier detection of vision-threatening disease. In a randomized trial, offering the exam at the point of care raised completion to 100 percent against 22 percent with referral (Wolf et al., 2024).
Stakeholders and timeline
Medical assistants will operate the cameras, physicians will act on results, and the billing office will add the exam code. Purchase would occur in the first quarter of fiscal year 2026, training in the second, and full use at all sites by the third.
Part Two: Departmental Budget
Table 1 presents the adult medicine department's operating budget for fiscal years 2024 and 2025, as actually recorded, and the projected budget for fiscal year 2026 including the capital item.
Table 1
Adult Medicine Department Operating Budget, Fiscal Years 2024 to 2026
| Line | FY2024 actual | FY2025 actual | FY2026 projected |
|---|---|---|---|
| Net patient service revenue | $6,510,000 | $6,420,000 | $6,603,000 |
| Section 330 grant allocation | $1,150,000 | $1,150,000 | $1,150,000 |
| Quality incentive payments | $150,000 | $180,000 | $240,000 |
| Total revenue | $7,810,000 | $7,750,000 | $7,993,000 |
| Salaries and wages | $4,420,000 | $4,610,000 | $4,771,350 |
| Employee benefits | $1,005,000 | $1,060,000 | $1,097,410 |
| Medical supplies | $206,000 | $214,000 | $222,560 |
| Contracted services | $371,000 | $386,000 | $397,580 |
| Information technology and software | $229,000 | $242,000 | $281,760 |
| Equipment maintenance | $93,000 | $96,000 | $100,000 |
| Occupancy allocation | $598,000 | $610,000 | $622,200 |
| Administrative allocation | $452,000 | $470,000 | $484,100 |
| Depreciation | $61,000 | $58,000 | $78,600 |
| Total expenses | $7,435,000 | $7,746,000 | $8,055,560 |
| Net operating result | $375,000 | $4,000 | ($62,560) |
Note. Composite figures for illustration. FY = fiscal year. Parentheses indicate a deficit.
What the History Shows
The two actual years tell a clear story. Net patient service revenue fell 1.4 percent from 2024 to 2025 as Medicaid disenrollments moved patients to the sliding fee scale, while salaries rose 4.3 percent. The department's surplus fell from 375,000 dollars to 4,000 dollars in one year. Labor, meaning salaries and benefits together, rose from 73 percent to 73.2 percent of expenses, and the grant allocation stayed flat. The department is not losing money because it spends carelessly; it is losing margin because its largest cost grows faster than its largest revenue. Any proposal that adds cost without adding revenue would deepen the problem.
Projection Assumptions
Each projected line rests on a stated assumption. Salaries rise 3.5 percent under the new wage scale, with no added positions, because medical assistants will operate the cameras within existing schedules. Benefits stay at 23 percent of salaries. Supplies rise 4 percent and contracted services and administrative allocation 3 percent, in line with the center's 2025 experience; occupancy rises 2 percent under the lease. Net patient service revenue grows 2 percent from rate increases net of further coverage losses, plus 54,600 dollars from 1,300 eye exams at an estimated average collection of 42 dollars, a figure the billing office derived from the center's payer contracts. Quality incentives add the 60,000 dollar eye exam payment to the 2025 base. Information technology adds 32,500 dollars in exam licenses, maintenance adds 4,000 dollars, and depreciation adds 20,600 dollars, the capital cost spread over a five-year useful life on a straight-line basis (Reiter & Song, 2021).
With and Without the Capital Item
The projection shows a deficit of 62,560 dollars even with the cameras, because wages outpace revenue. Without them, removing their revenue and costs, the deficit would be about 120,000 dollars. The cameras therefore improve the department's result by about 57,500 dollars in the first year, after depreciation, while serving the mission. That comparison, rather than the department's bottom line alone, is the fair test of the proposal, and Milestone Three will examine it in more detail, including what happens if the quality incentive is not earned.
Risks to the Projection
Three assumptions carry most of the risk, and the budget should be read with them in view. The first is exam volume. The projection assumes 1,300 exams in the first year, about 55 percent of adults with diabetes, because the cameras will not be running at all three sites until the third quarter; if volume is 20 percent lower, exam revenue and license costs both fall, and the net effect is a loss of about 4,400 dollars. The second is the quality incentive, which is paid only if the center's rate exceeds 60 percent for the measurement year. Reaching 60 percent from 38 percent in one year is ambitious, and without the payment the department's projected deficit grows to about 122,600 dollars. The third is the average collection per exam, which depends on how each payer treats the exam code; the billing office will confirm payment with the two largest payers before the purchase. These risks are the subject of the sensitivity analysis in Milestone Three.
References
Abramoff, M. D., Lavin, P. T., Birch, M., Shah, N., & Folk, J. C. (2018). Pivotal trial of an autonomous AI-based diagnostic system for detection of diabetic retinopathy in primary care offices. npj Digital Medicine, 1, Article 39. https://doi.org/10.1038/s41746-018-0040-6
Reiter, K. L., & Song, P. H. (2021). Gapenski's healthcare finance: An introduction to accounting and financial management (7th ed.). Health Administration Press.
Wolf, R. M., Channa, R., Liu, T. Y. A., Zehra, A., Bromberger, L., Patel, D., Ananthakrishnan, A., Brown, E. A., Prichett, L., Lehmann, H. P., & Abramoff, M. D. (2024). Autonomous artificial intelligence increases screening and follow-up for diabetic retinopathy in youth: The ACCESS randomized control trial. Nature Communications, 15, Article 421. https://doi.org/10.1038/s41467-023-44676-z
How this IHP 450 Module 5 example is structured
The milestone is split into its two assigned parts. Part One is an outline a busy executive could read in two minutes, so each element is a short labeled paragraph rather than an essay. Part Two leads with the budget table and then explains it: what the two actual years show, how each projected line was built, and what the projection means with and without the capital item. Stating assumptions line by line is what makes a projected budget defensible.
Get IHP 450 Module 5 written to your instructions
Send your IHP 450 Milestone Two guidelines, the budget worksheet and your department's figures. A proposal outline and a completed departmental budget with stated assumptions come back within 24 to 48 hours; your first is free. 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.
IHP 450 Module 5 questions, answered
What does IHP 450 Milestone Two include?
Milestone Two usually has two parts: an outline of the capital budget proposal addressed to a supervisor, and a departmental budget worksheet with historical figures and a projection for the next year. Students explain their assumptions and show how the capital item affects the department's budget.
How do I project next year's departmental budget?
Start from the most recent actual year, then adjust each line for known changes: wage increases, inflation in supplies and services, changes in volume or payer mix, and new items such as a capital purchase's depreciation and operating costs. State each assumption so a reader can test it.
Why does depreciation appear in an operating budget?
A capital item is paid for once but used for several years, so its cost is spread over its useful life as depreciation. A 103,000 dollar purchase with a five-year life adds about 20,600 dollars a year of depreciation expense to the department's operating budget, even though the cash leaves once.