Preparing and Managing an Operating Budget
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
Managing budget is crucial for leading nurses to ensure benefits for customers. Budget management and the preparation of operational budget involve planning resources for equipment and other health-related tools. Considering needs of an organization is also important for manager nurses to plan the right operating budget. This task is crucial for my team to craft operating budget for our department by applying knowledge and techniques. This report will assist leaders to facilitate each other and analyze the efficiency of our 40-bed hospital.
The Operating Budget Preparation
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
The proposed operating budget is aimed at providing the right information to managers that is relevant to expenses and costs of operations (Bermúdez-Tamayo, 2018). In our 40-bed organization, budget controlling is the responsibility of manager nurses. They are responsible for maintaining the unit that is occupied by most elderly patients above 60. The budget planning is done in phases, for example, the focus of this budget will be on income statement that records most of the expenses during the year. The balance sheet will also be a focus of this budget for recording cash and other receivables. The organization has purchased equipment such as CT scanners, diabetic monitoring devices, and blood pressure monitoring tools recently to meet patients’ needs; nurses should understand these needs to allocate resources through budget.
Preparing an operating budget also offers a clear picture of how the organization can use funds and which funds are available to make the necessary and vital expenses. Some expenses are unavoidable, the company must use the funds available to meet its objectives (Bryson & George, 2020). This implies that the organization must have adequate cash on hand to deal with any future crisis situation. Therefore, if managers want to build a thriving and long-term successful operating budget, they can benefit from this plan.
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
The budget will serve the organization during 2023 and it will align itself with the operating expenses of the Vila Hospital. The budget will also include recovery plans to improve profitability. In the post-COVID-19 era, there has been an increase in elderly patients above 7%. This has increased number of emergency visits per department as shown in the table below.
| Operating Revenue | Budget |
Supplies |
$46,000 |
Professional Fees |
$111,000 |
Purchased-Services Utilities |
$32,000 |
License and Taxes |
$21,000 |
| Salaries | $110,000 |
Managed Care |
$968,000 |
Insurance |
$32000 |
CMS |
$390 |
Medicare |
$855,220 |
Medical Officers |
$651,066 |
| Benefits | Percent |
Compensations |
2.5% |
Health insurance |
30% |
Pension |
20% |
Other perks |
2% |
Cost savings has already reduced non-labor expenses by 1.2%. The consumables cost is $106,500 while the purchase of new IT equipment relates to new physiotherapy systems and IP telephony equipment. Some equipment is near its expiration date that is unmeasureable; the proposed budget is created based on the assumption that the company has good income and it is able to increase wages according to more labor in the unit. Moreover, educational expenses are also included in the budget as it is important to train staff members (Cohen, 2018). Hence, the plan focuses on efficient working of the elderly patient nurses in the unit. It also helps to promote patient-focused services. It will also help the company to reduce bills’ costs. The budget will serve the company for one year.
Strategic Plan for Developing a Budget
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
As it can be seen from the budget, the first step is to examine the running costs of the hospital so they can give a better idea to management to budget plan in a robust manner. Knowing in detail what are the costs of the organization will provide managers and nurses a basic foundation you to create a successful budget. Making a rough budget would require nurses more funds for commercial activities that are necessary to meet the goals of the company. However, this can also jeopardize some long-term goals; therefore, the best strategy adopted by the company is to set up a budget to help the firm grow. This also implies that the current budget is formed keeping in mind the growth considerations of the firm. These times are harsh economically and the organization needs to increase its revenues; therefore, this budget will contribute towards increasing the profit of the company that will be ample to cover the increasing costs or expenses in the future (Smith & Hasan, 2019).
There is a need to align the hospital’s mission with budget planning. The management can reduce its costs and use resources efficiently for budget planning. The goal is to manage finances and reduce relevant costs. The hospital still needs more equipment to deliver the best healthcare services to the patients. The company can improve the sustainability of its current rescues by employing some new nurses who can possess better technological knowledge. For example, nurses must have expertise in the Electronic Medical Record (EMR) which is also a part of this budget. Shifting the dynamics of insurance payers is also important; for that purpose, the company is also focused on monitoring Medicare payments. The company is also focusing on price transparency of billing processes to allow customers pay hassle-free through price estimates. Therefore, planning of insurance payers’ dynamics is vital for monitoring Medicare that is also the major revenue source of the Vila Hospital.
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
Moreover, the designing and planning phase of the budget would rely on a hybrid approach that will enhance its future forecasting accuracy (Daili, 202). The healthcare providers will consider this approach of using the statistical forecasting procedures and align them with operating budget processes. For example, the future forecasting budgeting would include data collection and gaps’ detection, full knowledge operations, maintenance processes, synthesis, strategies for managing new resources, funding schemes, and formative ongoing expenses (Canana, 2020).
This proposed strategy will help to institutionalize the work of managers and also reduce workload of nurses. This planning strategy will offer a good positive environment for the implementation of this budget action plan. For example, after month end, updated outcomes will be distributed to managers and decision-makers. Long-term budget planning focuses on finances to make sustainable decisions.
Conflicting Information
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
There are several important roles of this budget system. This means multiple role conflicts can arise. For example, the biggest challenge or budget conflict can be planning versus motivation. The next conflict can be motivation versus evaluation. Therefore, if the company does not use this budget, it will lose it. It must fit the goals of the organization and also should not make easy to spend money. The budget must be realistic which may not lead to inflexibility (Aziz & Shah, 2020).
Strategic plan and Proposes Criteria for Future Evaluation of Budget
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
The planning of the management is on the importance of increasing revenues as well as controlling operating expenses. The budget is supposed to reduce the cost of IT equipment and the new diagnostic tools. However, no consideration is given yet to future costs such as expansion plans. The company is focusing on associating its operating budget with the mission and vision of leaders and is strategically planning to change the financial dynamics. The mission also includes focusing on perpetual improvement of the existing financial resources to incorporate technological advancements.
Improving the sustainability human assets, the firm is focusing on recruiting new nurses tech-savvy doctors. The strategy must also include the use of Electronic Medical Records (EMR) also advocated by researchers in the recent years after COVID-19 (Bryson & George, 2020). The evidence also shows that EMR use in emergency departments is also helpful in improving the performance of our nurses by 20%. Moreover, the focus must also be on shifting the dynamics of insurance payers including Medicare payments to generate more profits for the organization.
For example, the firm must also focus on the price transparency of billing processes and should also allow patients to pay hassle-free. This strategy is also in line with the organization’s holistic mission to incorporate the right technology and relate it to reduce telephone bills. This strategy will help to improve the role clarity to make criteria for improving resources.
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
Moreover, one aspect is very important in improving the revenues and reducing expenses of the organizations. The team of nurses and researchers has found that other healthcare organizations have failed in the past. This is because they failed due to overestimating their revenues; our team identified that our competitors who have failed had borrowed additional or extra funds from parties to meet operational requirements. This was a wrong move and we have learned from it because it kills the real purpose of making a budget in the first place. Therefore, we have chosen to carefully examine the previous years’ revenues first and then considered these records to make reasonable decisions. We have tracked revenues on a monthly and yearly basis (Ho, 2018). And this approach will still be applied in the future.
Approach for Ongoing Budget Management
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
There are a few complex things management has discovered related to strategy planning of this operating budget. The lack or risk sharing practices and innovation is a vital issue because it hinders the growth of innovative solutions related to technology. The important considerations are hospital’s policies which impact the mission and competition (Smith & Hasan, 2019). For example, the firm must emphasize on enhancing the overall governance structure; this strategy can improve financial management and can help to use a centralized innovation budget. This budget can be a blessing for the whole firm to reduce the technological expense. In each department, the hospital must improve the overall service quality of the firm to enhance patients’ experience.
Moreover, the evidence by literature also shows that artificial intelligence (AI) for improving the home-based delivery services is also a crucial aspect of growth. This one year budget should incorporate the opinion of experts to predict the cost targets and revenues (Ho, 2018). Moreover, nurses should also improve their Inter professional communication to improve data sharing and reporting processes. The enhanced communication and collaboration of nurses and doctors with financial experts will surely help the organization to quickly share their innovative idea related to digital innovation projects. This will help the firm to create a sustainable competitive advantage for the organization.
Finally, the approach must be accurate and reliable. The Next Generation of Budgeting for Healthcare (2020) report shows that AI use and budgeting is a good combination rather than using a traditional approach. This means that they must recruit new nurses who are better familiar with advanced technology containing multiple skills in handling and caring the healthcare patients. The goal of this firm is to focus on the wellbeing of patients as well as on the enhancement of hospital’s infrastructure. This means that the hospital should spend costs wisely and hire new nurses who can have skill in using the electronic medical records (EMR).
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
Moreover, regarding managing cash flow projections, the company’s cash flow is made of two parts such as vendor and customer payments. To ensure that the case is flowing into the organization, the aim is to maintain a balance between these two factors immediately to improve the performance of the current budget.
It’s critical to have flexible payment terms and the flexibility to take payments through conventional payment channels if you want to assure timely consumer payments. Regrettably, you will have to deal with consumers who do not adhere to the agreements. Due to missed payments, this could have an impact on your cash flow estimate.
Conclusion
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
In healthcare organization, the process of budget is to follow the advanced techniques and approaches to incorporate technology and improve planning of resources. The current operating budget will help to improve the operational efficiency of the organization and will help the management to cover all the expenses with the use of advanced technology. In Vila Health Hospital, there is a 35-bed unit allocated to elderly patients. The patients want well-equipped services and they need an affordable solution that reduces their costs and improves satisfaction. This operating budget has tried to cover many expenses that are necessary to run the firm smoothly for the period of one year and to provide quality healthcare services. Therefore, the future business budget plan will be created on the basis of careful consideration of all the strategies described here instead of using speculations.
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
References
Aziz, H., & Shah, N. (2020). Participatory budgeting: Models and approaches. Pathways between Social Science and Computational Social Science, 215–236.
https://doi.org/10.1007/978-3-030-54936-7_10
Bermúdez-Tamayo, C., Johri, M., &Chaillet, N. (2018). Budget impact of a program for safely reducing caesarean sections in Canada. Midwifery, 60, 20–26.
https://doi.org/10.1016/j.midw.2018.01.022
Bryson, J., & George, B. (2020). Strategic management in public administration. Oxford Research Encyclopedia of Politics.
https://doi.org/10.1093/acrefore/9780190228637.013.1396
Canana N. (2021). A cost analysis to address issues of budget constraints on the implementation of the indoor residual spray programme in two districts of Maputo Province, Mozambique. Malaria journal, 20(1), 8.
https://doi.org/10.1186/s12936-020-03556-3
Cohen, A., Gaebler, J. A., Izhakoff, J., Gullett, L., Niecko, T., & O’Donnell, T. (2018). US budget impact of increased payer adoption of the Flexitouch advanced pneumatic compression device in lymphedema patients with advanced chronic venous insufficiency and multiple infections. Journal of medical economics, 21(10), 993–1000.
https://doi.org/10.1080/13696998.2018.1491008
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
Daili, C., Kunkun, Z., &Guangjun, Y. (2020). Cost analysis of operating a human milk bank in China. Journal of human lactation: official journal of International Lactation Consultant Association, 36(2), 264–272.
https://doi.org/10.1177/0890334419894551
Ho, A. T.-K. (2018). From Performance Budgeting to Performance Budget Management: Theory and Practice. Public Administration Review, 78(5), 748–758.
https://doi.org/10.1111/puar.12915
Pista, A., Costa, C., Saldanha, C., Moutinho, J. A. F., Moutinho, J. M., Arrobas, F., Catalão, C., &Kempers, J. (2019). Budget impact analysis of cervical cancer screening in Portugal: comparison of cytology and primary HPV screening strategies. BMC public health, 19(1), 235.
https://doi.org/10.1186/s12889-019-6536-4
Vergnaud, S., Riche, V. P., Tessier, P., Mauduit, N., Kaladji, A., &Gouëffic, Y. (2018). Budget impact analysis of heparin-bonded polytetrafluoroethylene grafts (Propaten) against standard polytetrafluoroethylene grafts for below-the-knee bypass in patients with critical limb ischaemia in France. BMJ open, 8(2), e017320.
