Developing an Operating Budget for a Health Care Unit
Sound financial management is essential to the fiscal well-being of all health care organizations, and the nurse leader plays an important part. Consequently, the preparation and effective management of operating budgets is a critical skill for nurse leaders. The budget guides leaders in optimizing the use of resources, and because nurses are closest to patients, they understand very well what it takes to operate on a daily basis and provide safe, high-quality care.
This assessment provides an opportunity for you to develop an operating budget for a health care unit. Keep in mind, staff is a large part of this budget and is often hard to control.
Numbers on a budget sheet or report are only numbers. Nurse leaders are major decision makers who must be informed and able to make data-driven decisions, often in a very limited amount of time. Financial analysis consists of the organization and presentation of data in a meaningful and relevant format that enables analysis, comparison, and synthesis.
Preparation
You are the nurse manager of a 35-bed hospital unit with 20 full-time equivalent (FTE) staff. You have been given the task of getting the budget under control. Several people have recently left the unit, and you have been working to fill those open positions. Your staff work scheduled overtime and many sign up to work extra shifts. Your unit serves an older population, as well, and has incurred expenses associated with this group of patients.
As you prepare to complete this assessment, you may want to think about other related issues to deepen your understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community. Note that these questions are for your own development and exploration and do not need to be completed or submitted as part of your assessment.
- What major sections would you include in an operating budget?
- What are your primary sources of budget information?
- Would you include nice-to-have items in your budget? Why or why not?
- What factors, such as organizational objectives, policies, and competition for funding, might affect the development and management of an operating budget?
Prepare and submit an operating budget for your hospital unit.
- Prepare the operating budget.
- Note: Assemble your budget figures in a table, using a Excel format to create your budget table.
- Explain how the budget was designed and created.
- Develop a strategic plan.
- Develop an approach to ongoing budget management.
- Present budget data and information clearly and accurately.
- Integrate relevant and credible sources of evidence to support your budget data and information, correctly formatting citations and references using current APA style.
Prepare and Manage Operating Budget Essay
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Sound financial management is fundamental in ensuring healthcare institutions' financial success and well-being. Thus, nurse leaders play a significant role in the management of operating budgets and resources. Nurse leaders should possess the crucial skills of preparing and managing operating budgets since they form basic decision-making frameworks, provide safe and optimal quality care, and allocate resources. Operating budgets offer a clear guideline for maximizing resources and ensuring financial goals align with the institution's objectives. Nurse leaders should play a central role in making data-centered decisions within limited financial and time resources. Financial analysis entails organizing and documenting data in a feasible approach that allows for evaluation, comparison, as well as synthesis. One of the primary roles facing nurse administrators when it comes to designing and managing an operating budget entails delineating the types and volume of healthcare services to deliver. Therefore, nurse leaders should also use strategies to augment their organization's profitability and sustainability. This essay will develop an operating budget for the hospital unit, extensively discuss the budget's design and creation, develop a strategic plan, and present a plan for ongoing budget management.
Prepare the Operating Budget
Operating Budget for Hospital Unit
Budget Period: 1st June, 2023 - 31th May 2024
Budget Categories
Amount ($)
Revenue
Inpatient services
1200000
Oupatient services
43000
Emergency department services
38000
Other services
40000
Grants
100000
Donations
150000
Investments
200000
Insurance reimbursements
50000
Total Revenue
1821000
Expenses
Personal Expenses
Salaries and wages
211200
Employee benefits(Retirement plans and health insurance
110500
Overtime and temporary staffing
90000
Non-personal expenses
Supplies and materials
250000
Utilities
3000
Equipment maintenance and repairs
2000
Rent and lease
10000
IT services and software
25000
marketing and advertising
45500
Staff training
550
Depreciation expenses
Equipment
780
Facilities
9000
Other operating expenses
Professional services
37000
Travel and conferences
2000
Research and development
1200
Capital expenditures
Equipment purchases
430000
facility upgrades
150000
Contingency funds
700
Total expenses
1378430
Net income
442570
The budget has comprehensively covered major sections, including revenue projections, operating expenses, capital expenditures, and contingency. Consequently, the budget encompasses on...
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