Resources: Case 3: Charitable Contributions and Debt: A Comparison of St. Jude Childrens Research Hospital/ALSAC and Universal Health Services located in Ch. 5 of Mastery of the Financial Accounting Research System (FARS) Through Cases Write a 1,050- to 1,400-word response in which you address the following questions from the case study: Requirement B: Revenue Mix (Strategy-Related Considerations) The 10-K filing of Universal Health Services, Inc. describes the mix of revenue sources, as depicted in Table 5.3-3. 1.How does this revenue mix compare with the revenue blend of the not-for-profit entity, St. Jude Children's Research Hospital (ALSAC)? Access the latest SEC filing and compare the reported revenue mix; has it changed? 2.What does that imply as to the strategies of investor-owned hospitals in managing risk and ensuring adequate capital relative to not-for-profit entities? An opportunity exists to explore the greater social and political questions that are frequently debated about the compatibility of profit-oriented entities and quality of health care, relative to not-for-profit entities. As background, identify what the latest SEC filings report concerning charity care. 3. How would your answers to Requirements B differ if the government owned and operated the hospital? I need question 1 answered

Table 5.3-1. Financial Comparisons of the Not-for-Profit Entities

Fiscal Year Ended 1999	St. Jude Children's Research Hospital Form 990 *	American Lebanese Syrian Associated Charities, Inc. (ALSAC) Form 990 *
Contributions, gifts, grants and similar amounts received: Direct public support	$91,978,426	$231,793,748
Indirect public support		2,906,934
Government contributions (grants)	31,469,447
Program service revenue, including government fees and contracts (i.e., health insurance revenue)	46,034,710
Accounts receivable	24,217,029	4,230,764
Pledges receivable		23,604,748
Allowance for doubtful accounts	9,363,328
Program service expenses		99,282,906
Program service expenses: Research	87,225,830
Program service expenses: Education and training	5,471,186
Program service expenses: Medical Services	93,735,602
Reconciliation of revenue, gains, and other support to audited numbers: net unrealized gains on investments	4,023,815	65,891,269
Deferred grant revenue	1,857,628
	(Statement 5)
Support from American Lebanese Syrian Associated Charities, Inc.	91,978,426	91,978,426
	(Statement 7)	(paid per Statements 4, 6)
Excluded contributions		2,746,295
		(Statement 1)
Excess or (deficit) for the year	10,933,191	120,521,982
Net assets or fund balances at end of year	199,707,440	994,501,910
Temporarily restricted		15,715,890
Permanently restricted	14,000,000	247,147,826
Total liabilities	21,956,792	7,017,192
Schedule of deferred debits & credits by contract (FAS 116 adjustment noted to result in this deferred revenue)	157,628

^*The GuideStar.org Web site ( http://www.guidestar.org) provides access to Forms 990 in.PDF format.

Table 5.3-2. Universal Health Services, Inc.'s Financial Excerpts ^*

Income Statements (in thousands)	Reported 1999 Calendar Year
Net revenues	$2,042,380
Operating charges	1,913,346
Components:
Salaries, wages, and benefits	793,529
Provision for doubtful accounts	166,139
Lease and rental expense	49,029
Interest expense, net	26,872
Net income	77,775
Total assets	1,497,973
Total liabilities	856,362
Total retained earnings	482,960
Capital stock	306
Paid-in capital in excess of par	158,345

^*The 10-K filing as of 3/28/2001 at EDGAR ( http://www.sec.gov/edgar.shtml) provides financial statement information for 2000 and 1999.

Table 5.3-3. Patient Revenue Mix

	PERCENTAGE OF NET PATIENT REVENUES
	2000	1999	1998	1997	1996
Third Party Payors
Medicare........................................	32.3%	33.5%	34.3%	35.6%	35.6%
Medicaid........................................	11.5%	12.6%	11.3%	14.5%	15.3%
Managed Care (HMOs and PPOs)...	34.5%	31.5%	27.2%	19.1%	N/A
Other Sources.................................	21.7%	22.4%	27.2%	30.8%	49.1%
Total..............................................	100%	100%	100%	100%	100%

N/A-Not available (Source: 10-K filed 3/28/2001)