NURS6216: Advanced Finance and Operations Management Essay

Introduction

According to Zietlow et al. (2018), sound financial management is a cornerstone of success for healthcare organizations. Zietlow et al. (2018) also indicate that the role of nurse leaders in financial management is pivotal. Nurse leaders are entrusted with the critical task of preparing and managing operating budgets among their many responsibilities. This skill is essential as it enables effective resource allocation, facilitates optimal patient care, and aligns organizational goals with financial realities. In the context of financial management, this paper focuses on developing an operating budget for a 35-bed hospital unit, where the nurse manager is tasked with maintaining fiscal control and upholding the quality of care provided to an aging patient population. NURS6216: Advanced Finance and Operations Management Essay

Zietlow et al. (2018) add that the multifaceted nature of healthcare budgeting requires a strategic and thoughtful approach. This section sets the stage for a comprehensive exploration of the intricacies of creating an effective operating budget. The subsequent sections will detail the design and creation process of the budget, the strategic alignment with organizational objectives, the formulation of an ongoing budget management strategy, and the presentation of budget data with the integration of credible sources. The assignment seeks to demonstrate the intricate interplay between financial stewardship, strategic planning, and providing high-quality healthcare services by delving into these aspects.

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The Operating Budget for my Hospital Unit

Below is a one year period operational budget for my hospital unit. The budget has five sections with sections having various components.

Design and Creation of the Budget

According to Immaniar et al. (2019), developing an effective operating budget for a hospital unit involves a comprehensive and strategic approach considering various factors and assumptions. The budget was designed to align with the unit’s mission, prioritize patient care and safety, and optimize resource allocation. Below are the key aspects that guided the creation of the presented budget.

1. Assumptions Underlying the Budget: The budget framework is supported by several important assumptions that inform its strategic design. First, it is assumed that the patient population requesting the unit’s services would follow a constant pattern, with fluctuations accommodated through flexible staffing and workload distribution mechanisms. Furthermore, the budget is based on an ongoing demand for specialized geriatric care, which reflects the unit’s patient profile. These assumptions acknowledge the ever-changing nature of healthcare while allowing the unit to anticipate potential variations in demand. In addition, the budget was based on historical data and forecasted patient demands to guide supply and equipment utilization assumptions. This ensured resource allocation was in line with anticipated needs and operational efficiency.
2. Determining Line Items and Cost Center Codes: Determining line items and cost centre codes involves a detailed analysis of the unit’s operational components and associated costs. Each line item was carefully considered based on its relevance to patient care, safety, and efficiency. Cost center codes were assigned to categorize expenses according to their nature, such as personnel costs, supplies and equipment, training and education, administrative expenses, and miscellaneous expenses. This categorization facilitated the organization and management of budgetary allocations. NURS6216: Advanced Finance and Operations Management Essay

• Allocation of Funding for Labor and Equipment Costs: The budget allocates significant funding for labor and equipment costs, reflecting their critical importance in delivering quality healthcare services. The budget allocates significant funding for labor and equipment costs, reflecting their critical importance in delivering quality healthcare services. Personnel costs, including full-time staff salaries, overtime pay, and benefits, form a substantial portion of the budget. This allocation addresses the need for an adequately staffed and motivated workforce. Equipment costs are addressed through allocations for medical supplies, equipment maintenance, and miscellaneous supplies. This allocation ensures the availability, functionality, and safety of essential medical devices and supplies.

1. Staffing Requirements and Workload Calculation: Staffing requirements were determined by assessing patient volume, acuity levels, and the unit’s service hours. A workload calculation was conducted to ensure that the unit has an appropriate number of staff members to meet patient needs while minimizing the need for overtime. Cross-training strategies were also considered to enhance flexibility in addressing staffing gaps.
2. Equipment Needs and Ongoing Expenses: The unit’s patient care objectives and technological requirements were utilized to determine equipment requirements. The budget includes funds for medical supplies. This is appropriate to guarantee an appropriate supply for patient treatment and safety. Equipment maintenance costs were allocated to guarantee that medical devices are serviced and maintained regularly for optimal performance. Miscellaneous supplies were also provided to satisfy unanticipated equipment-related demands.
3. Primary Sources of Budget Information: The primary sources of budget information include historical financial data, patient census data, staff scheduling records, supply utilization reports, and equipment maintenance schedules. Collaborative input from clinical and administrative staff played a crucial role in identifying needs, challenges, and potential cost-saving opportunities. This multi-disciplinary approach ensured that budget allocations were well-informed and accurately reflected the unit’s operational realities. NURS6216: Advanced Finance and Operations Management Essay

• Data Accuracy and Reliability: The budget data is derived from up-to-date and reliable sources within the hospital unit. These sources include electronic health records, staff management systems, and financial databases. Regular data validation processes were implemented to ensure the accuracy of the patient census, staff scheduling, supply utilization, and equipment maintenance records. This data-driven approach enhances the budget’s reliability and the effectiveness of ongoing budget management.

Developing a Strategic Plan in Alignment with the Operating Budget

1. Examination of the Mission and Budget Alignment

The mission of the hospital unit revolves around providing exceptional patient care. This ensures the well-being of our diverse older population and strives for excellence in healthcare delivery. The hospital’s mission emphasizes the importance of compassion, innovation, and dedication to meet the unique needs of our patients. In this context, the operating budget has been carefully structured to align with and support our mission.

The budget aligns with the mission by emphasizing vital elements that directly contribute to patient care and safety. The significant allocation to human costs demonstrates our commitment to maintaining an appropriately staffed and motivated workforce capable of providing compassionate care around the clock. The personnel costs include full-time staff salary, overtime pay, and benefits. Furthermore, the allocation for medical supplies and equipment maintenance demonstrates the hospital’s commitment to guaranteeing the availability and functionality of the instruments and resources required for optimal patient treatment.

Furthermore, the budget acknowledges the importance of continuous learning and skill development by allocating training and education. This commitment to ongoing professional growth aligns with our mission’s emphasis on excellence and innovation in healthcare delivery. The strategic plan emphasizes the need for specialized training in geriatric care, a crucial aspect given the older patient population we serve. This targeted training ensures that our staff can provide the best possible care to meet the unique challenges and needs of elderly patients. NURS6216: Advanced Finance and Operations Management Essay

1. Potential Reaction of Executive Leaders

Executive leaders will likely react positively to the budget because it aligns with the organization’s mission and strategic goals. The emphasis on patient care, staff well-being, and continuous improvement resonates with the organization’s broader objectives. The strategic plan’s focus on optimizing staffing levels, addressing overtime expenses, and enhancing geriatric care expertise demonstrates a proactive approach to addressing challenges while capitalizing on opportunities. This approach is likely favourably viewed by executive leaders who prioritize responsible financial management alongside exceptional patient outcomes.

1. Absence of “Nice-to-Have” Items

The budget has been thoughtfully designed to avoid including non-essential or “nice-to-have” items that do not directly contribute to patient care, safety, or operational efficiency. Each budget line item has been supported based on how it directly affects the provision of healthcare and the well-being of patients. For example, allocating funds for medical supplies, equipment upkeep, and training directly contributes to the effectiveness and security of patient treatment. Similarly, administrative costs like IT and software, office supplies, staff development plans, and utilities are necessary for efficient operations. The budget prioritizes the unit’s mission while removing non-essential costs and ensuring that resources are allocated to vital areas. This shows economic prudence. This approach supports the organization’s principles and reinforces its dedication to patient-centered care.

Approach to Ongoing Budget Management

As indicated by Fuadah et al. (2020), effective ongoing budget management is a cornerstone of maintaining the financial health and sustainability of the hospital unit while upholding the quality of patient care. This approach is a dynamic and proactive strategy that considers many factors that shape the budget. These factors include organizational goals, policies, and the competitive landscape for funding. It involves a well-orchestrated plan to address critical budgetary components, such as managing staff overtime, optimizing non-productive time and expenses, and effectively handling ongoing expenses related to supplies and equipment. NURS6216: Advanced Finance and Operations Management Essay

Limiting Staff Overtime:

1. Workforce Optimization: A proactive approach to workforce optimization will be implemented to mitigate the need for excessive staff overtime. This includes regularly monitoring staffing levels based on patient census and understanding. It also ensures the unit is adequately staffed to meet patient needs without frequent overtime (Paul et al., 2018).
2. Flexible Scheduling: Implementing flexible scheduling practices can help distribute the workload more efficiently and reduce the reliance on overtime. This may involve exploring alternative shift arrangements, part-time positions, and utilizing per diem staff to cover peak periods (Chung & Van der Horst, 2020).
3. Cross-Training: According to Reio (2018), cross-training staff in various roles can enhance flexibility and enable a quicker response to staffing gaps. This approach helps ensure staff members can fill in for each other, reducing the need for overtime during unexpected shortages.

Managing Non-productive Time and Expenses:

1. Strategic Education Investment: While education and certifications are essential for staff development and patient care quality, a strategic approach will be taken to manage associated expenses. According to Braganza et al. (2022), prioritizing education that directly aligns with the unit’s goals and patient population needs will ensure that funds are allocated efficiently.

1. Balance Paid Time Off (PTO): Balancing the granting of PTO requests with maintaining adequate staffing levels is essential. Implementing a PTO management system that considers staffing requirements and patient volume will prevent understaffing situations that may lead to increased overtime.
2. Certification Relevance: Encouraging staff to pursue certifications that directly contribute to improved patient care outcomes and operational efficiency will be emphasized. This ensures that certifications-related expenses have a tangible impact on the unit’s performance. NURS6216: Advanced Finance and Operations Management Essay

Managing Ongoing Expenses related to Supplies and Equipment:

1. Usage Analysis: Regular analysis of supply and equipment usage patterns will guide procurement decisions. Identifying overutilization or underutilization of resources will help adjust orders to match actual needs, preventing unnecessary expenses (Blocher et al., 2021).
2. Vendor Negotiations: Engaging in strategic vendor negotiations can lead to cost savings on supplies and equipment. Leveraging the purchasing power of the hospital unit and exploring bulk purchasing options can result in favourable pricing terms (Blocher et al., 2021).
3. Preventive Maintenance: A proactive approach to equipment maintenance will be adopted to extend the lifespan of medical devices and reduce the risk of costly breakdowns. Preventive maintenance schedules will be established and closely followed (Blocher et al., 2021).
4. Technology Investment: Exploring innovative technologies that improve operational efficiency and patient care quality can lead to long-term cost savings. Investing in systems that automate supply tracking, streamline inventory management, and optimize resource utilization can help control expenses (Blocher et al., 2021).

Conclusion

In conclusion, creating and strategically aligning an operating budget for a 35-bed hospital unit guarantees financial stability and top-notch healthcare. Managing resource allocation and promoting a patient-centred financial management strategy depends greatly on nurse leaders. The meticulously developed budget results from a systematic, data-driven process built on a thorough understanding of the characteristics and needs of patients. With accessible cost center codes enabling effective resource management, this understanding directs fund allocation towards important aspects. These aspects include labor costs, supplies, and equipment. Calculations of staffing needs and workloads demonstrate a dedication to providing the best possible patient care while judiciously controlling staff-related costs.

Moreover, the budget’s alignment with the strategic plan reinforces the hospital unit’s mission of patient well-being, safety, and continuous enhancement. Prioritizing essential elements and emphasizing patient care demonstrates responsible fiscal stewardship, likely eliciting positive responses from executive leaders who value prudent financial management and goal-oriented budget decisions. The approach to ongoing budget management demonstrates adaptability, as measures to curb staff overtime through workforce optimization, flexible scheduling, and cross-training underscore dedication to staff welfare and financial prudence. Effective management of non-productive time and expenses ensures that investments in education and certifications yield tangible, patient-centric advantages, while strategic control of ongoing supply and equipment costs safeguards against inefficiencies. This operating budget is distinguished by the smooth integration of financial prudence with patient-focused care. It reflects a perfect union of rational financial principles, strategic vision, and a strong dedication to improving patient experiences. This operational budget serves as a fostering guide as nurse leaders negotiate the complex world of healthcare financial management by demonstrating how to balance fiscal responsibility and providing top-notch healthcare. NURS6216: Advanced Finance and Operations Management Essay

References 

Blocher, E. J., Stout, D. E., Juras, P. E., & Smith, S. (2021, January 11). Cost management: A strategic emphasis. Cost Management: A Strategic Emphasis. https://www.mheducation.com/highered/product/cost-management-strategic-emphasis-blocher-juras/M9781260814712.html

Braganza, M. Z., Pearson, E., Avila, C. J., Zlowe, D., Øvretveit, J., & Kilbourne, A. M. (2022). Aligning quality improvement efforts and policy goals in a National Integrated Health System. Health Services Research, 57(S1), 9–19. https://doi.org/10.1111/1475-6773.13944

Chung, H., & Van der Horst, M. (2020). Flexible working and unpaid overtime in the UK: The role of gender, parental and occupational status. Social Indicators Research, 151(2), 495-520.

Fuadah, l. L., safitri, r. H., yuliani, y., & arisman, a. (2020). Determinant factors’ impact on managerial performance through management accounting systems in indonesia. The journal of asian finance, economics and business (jafeb), 7(10), 109-117.

Immaniar, D., Mulyati, M., & Musliawati, U. J. P. (2019). The Utilization Of Financial Information System To Support The Creation From Budget Costs Using e-Budgeting. Aptisi Transactions on Management (ATM), 3(2), 119-125.

Paul, S., Krishnamoorthy, P., Dinesh, M. S., Kailash, S., Bussa, N., & Mariyanna, S. (2018, July). Methodologies for workforce optimization in Hospital’s Emergency Department. 2018 40th Annual International Conference of the IEEE Engineering in Medicine and Biology Society (EMBC) (pp. 4050-4053). IEEE.

Reio Jr, T. G. (2018). CTSDL: The role of cross-training through self-directed learning in reducing the effects of career concern stressors in the workplace. Journal of Organizational Psychology Vol, 18(5), 53.

Zietlow, J., Hankin, J. A., Seidner, A., & O’Brien, T. (2018). Financial management for nonprofit organizations: Policies and practices. John Wiley & Sons. NURS6216: Advanced Finance and Operations Management Essay

Guiding Questions

Budget Negotiations and Communication

This document is designed to give you questions to consider and additional guidance to help you successfully complete the Budget Negotiations and Communication assignment. You may find it useful to use this document as a pre-writing exercise, an outlining tool, or as a final check to ensure that you have sufficiently addressed all the grading criteria for this assignment. This document is a resource to help you complete the assignment. Do not turn in this document as your assignment submission.

Executive Summary

Write an executive summary of the operating budget you designed in Unit 5. Make a compelling case for why funds should be allocated for your budget.

Outline a strategic plan that ensures profitability and fiscal success.

• Does your executive summary begin with a strong first paragraph that captures the reader’s attention and compels her to read through the rest of the document?
• Is your plan truly strategic, rather than just an operational or business plan?
• Have you captured the key elements of your plan that you wish to communicate to executive leaders?
• Have you identified responsibilities for implementing the plan?
• What data or case studies support your plan?

Present a plan to meet staff productivity goals while staying within budget parameters. NURS6216: Advanced Finance and Operations Management Essay

• Does your plan address the major factors affecting staffing and productivity?
• How will proposed staffing levels affect the attainment of organizational goals?
• What staffing metrics or case studies support your plan?

Justify equipment and service costs.

• How will the equipment and services contribute to organizational goals?
• How did you calculate costs?
• What information can be gathered from stakeholders to ensure that you maximize available resources?

Analyze department, unit, or project alignment with the organization’s mission and goals.

• Does your analysis clearly communicate these linkages?
• What evidence do you have to support your analysis? NURS6216: Advanced Finance and Operations Management Essay
  

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Write clearly and concisely, using correct grammar and mechanics.

• Express your main points and conclusions coherently.
• Proofread your writing to minimize errors that could distract readers and make it more difficult to focus on the substance of your summary.

Integrate relevant and credible sources of evidence to support your assertions, correctly formatting citations and references using APA style.

• Integrate relevant evidence from at least five scholarly or professional sources.

Submission Reminders

• Have you effectively outlined a strategic plan that ensures profitability and fiscal success?
• Have you presented your plan for meeting staff productivity goals, while staying within budget parameters?
• Have you provided rational and compelling justification for the costs of equipment and services?
• Have you analyzed the alignment of your department, unit, or project with the organization’s mission and goals?
• Is your summary well-supported by at least five sources of credible evidence?
• Is your summary properly formatted and 3–5 pages in length, not including the title page and reference page?
• Have you proofread your writing to minimize errors that could distract the reader and make it more difficult to focus on the substance of your summary? NURS6216: Advanced Finance and Operations Management Essay