Introduction
Management of the financial budget in hospitals and nursing institutions has become a challenge due to its technicalities. The strain and struggle of handling the data usually result from the financial incentives and reimbursements connected to the patient’s satisfaction and the quality of services offered by the nurses (Moro Visconti & Martiniello, 2019). Nurse managers need to understand and become conversant with drafting the financial budget and have knowledge of how to manage the finances as much as the well-being of the organization is concerned. Therefore, using the hospital (a virtual) institution, this paper will focus on how nurses can help in the management of the organization’s resources. Finances are controlled by drafting and creating the budget, developing strategic plans for financial prosperity, and presenting a plan for ongoing budget management.
An Overview of the Operating Budget
The drafted operating budget for the hospital has all the sections needed for an effective budget in a healthcare institution. The major sections used in the budget comprise the income, the expenditure on medical equipment and expenses, and the cost of remunerating the staff, that is, nurses. The operating budget was prepared quarterly for the year 2022. Based on the budget preparation, the executive can make some changes to the budget before approving and implementing it in the hospital. The budget complies with the formatting guidelines which are used in healthcare.
Explanation of how the Budget was Designed and Created
The first assumption used when making the operational budget is that the cost and revenues are historically generated, and the data depends on the historical view of the data. For instance, the expenses are expected to be increasing by 20% for every quarter as a result of economic changes. The process for determining the line items for cost centers involved analyzing the budget expenditures for the previous years. The cost centers are determined based on the population, that is, the number of patients (35) and nurses (20). Funds have been allocated to the medical equipment, which is a total of $219,310 per Figure 1. The labor is determined by the human resources services provided by the nurses, who are paid a salary. The workload for every staff load has been determined as $2570 at the end of the first quarter. The equipment needs for the hospital are in high demand hence having a lump sum budget allocation. The primary source of data is from the historical books of the hospital and other inquiries from other old staff. The data used in formulating this budget is much more up-to-date because other departments have been using it to draft their financial plans in the previous financial year.
Development of the Strategic Plan
Mission and Vision of the Organization
It is vital for the strategic plan for the budget to align with the mission, vision, and goal of the company. The vision for the hospital is to continue providing the best, quality, and most affordable services to the patients. The mission statement of the facility is to provide healthcare services that meet the needs of the customers through the use of well-trained nurses and doctors. The budget created in this report aligns with the key objectives and goals of the company. The primary objective is to provide quality services that will satisfy customers and create a good brand for the company. Based on the computed budget, it is evident that the resources are directed toward improving the quality of services offered to the patients. The nurses are offered a good salary plus incentives and overtime to ensure that the best is delivered to the customers. From the budget, the total salary plus all other allowances given to each full-time staff is budgeted to be q1 in q2, $3084 and q3, and $3700.80 in January 2023 from figure 1. The compensation given to the nurses is good to guarantee the best services. Furthermore, controls have been put in place to ensure that the rate of consumption in the company aligns with the set number of patients in the hospital (Goktepe et al., 2018). However, to achieve the goal of maintaining resources, the salaries, incentives, and overtime given to the nurses need to be reviewed.
Nursing wages contribute to a large portion of the hospital, and this creates a need for the executives and burse leaders to find ways to manage and control the financial resources of the healthcare facility. The nurse leaders and other relevant stakeholders must take the created budget in the direction upon which is implemented after approval. It is anticipated that the executive leader will react positively to this budget (Warshawsky, Caramanica, & Cramer, 2020). Costs and expenses have been minimized to ensure no misuse of the hospital’s funds. However, in implementing and monitoring the budget, the executive leaders may make some amendments to ensure that the budget is within the resources allocated by the management.
The nice-to-have items for a hospital budget comprise the revenue, expenses directed to the patients, the staff’s salary, and other expenses in the facility, such as water, electricity, and consumables. One can easily identify costs attributable to each staff of the hospital as well as the expenditures of every patient. The costs presented in the budget are attributable to 35 patients, 20 full-time staff, and costs on hospital-related expenses such as medical consumables, waste disposal, and food and drinks to patients.
The Plan for the Ongoing Budget Management
A budget is an annual plan that includes the company’s organizational goals and objectives, expenses, and revenues, which helps determine the facility’s operations. The various factors affecting the budget of a healthcare facility, as presented for the hospital, comprised of the income/revenue, the salaries and wages for the staff, the population in terms of patients and employees, and the daily operating expenses. The income is made up of deposits from patients and consultation fees. It directly impacts the budget preparation process in a way that when the deposits are high, more funds will be available for allocation to expense. Concerning the population as a factor, the number of employees and patients in the hospital is used to determine the number of resources for other expenses. Another factor is fluctuation in the price of the commodities and inflation. As a result of inflation, the budgeted costs may reduce deficit variance in the future. Other factors that may result in variance from the budget include the goals of the organization, policies, and the management of the hospital.
Explanation on how to Limit Staff Overtime
The salary and wages paid to nurses serve to create a financial strain on the healthcare facility due to its nature of being expensive. The critical strategy used in the management of the high cost of paying staff is employee retention, whereby the management lays off some of the staff and remains with those who are highly qualified. Arguably, several strategies can be put in place to ensure that staff turnover in an organization is reduced. The first strategy is reducing or eliminating mandatory overtime for employees. The management can achieve this by assigning specific duties based on their level of competency and capability (Moran et al., 2017). The staff wages can also be reduced by ensuring that the staffing ratio corresponds with the number of patients. The current number of patients is 35 and is served by 20 nurses. With the present ratio, the nurses for the hospital reveal that nurses have overworked hence the need to get paid more wages by the hospital.
Management of Non-Productive Time and Expenses
It is essential to manage time in the hospital and ensure that no time is wasted in the facility. As a nurse manager, it is important to ensure that all staff are not found idle in the facility wasting time. Everyone should be on duty utilizing the time allocated to them. The non-productive time is managed by developing a work schedule that will assign work to every staff. This will make the employees disciplined when managing time and saving on costs for the hospital.
Managing Ongoing Expenses Relating to Supplies and Equipment
The medical expenses and equipment can be managed depending on the revenue and resources of the facility. The operating budget aims to minimize the costs of the hospital. The hospital’s medical expenses and equipment are budgeted to have a total of $219,310 as the total for the here months. The expenses on the equipment and other office expenses can be managed by the act executive leaders monitoring how the items are spent in the hospital. Furthermore, the management can restrict its spending on some of the expenses. After buying the equipment, the nurse leadership team needs to counter-check against the stock register sheet, and the responsible person is answerable in case of any variance.
Conclusion
Budgeting is a key element in hospitals since the nurses, doctors, and other practitioners need to account for the institution’s resources. As the nurse manager, setting up operational data helps in monitoring how the hospital uses its funds. Some of the major elements incorporated in this operating budget comprise the revenues, salaries for 20 nurses, expenses per head for 35 patients, and other relevant expenses such as medical equipment. One of the key strategies which can be used to implement the strategy involves aligning the budget with the vision and mission statement of the hospital.
References
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