Different types of budgets for a successful operation budgeting in the healthcare
Often, healthcare facilities encounter reduced budgetary allocation and economic constraints. This scenario calls for the need of nurse managers to assess the departments with limited funding and find appropriate measures to overcome those financial challenges. Therefore, nurse leaders should collaborate with the finance department and ensure that they know and understand the different types of budgets for a successful operation budgeting.
Preparing to Explain Short-Term Variations
Short-term variations in operational budgeting tend to forecast the cash flow of the next one to three months of operation. Nurse leaders should thoroughly explain this phenomenon to ensure that a health facility is enough liquid to settle their debts early before they are overdue. Short-term budgeting is a vital tool for the survival of a healthcare organization because of the lack of enough money to pay debts can have detrimental effects on organizational continuity. A successful budgeting process involves cooperation between nurse managers and the healthcare finance department. Hence, nurse leaders must be familiar with the entire procedure and activities to explain the short-term variations. The reason is that the process is ongoing and dynamic. Besides, they should also collect adequate data, plan their activities, implement, and evaluate the outcomes. They should conduct a careful analysis of the revenues and expenses for the daily operations to ensure that costs do not exceed returns (Leger & Dunham-Taylor, 2017). By doing so, they will have the necessary knowledge to explain the short-term variations or even come up with relevant actions when the expenses seem to exceed the income. Therefore, nurse leaders should always ensure that they can access timely and understandable reports to provide the best explanation for the short-term variations.
Issues in the Budgeting Process
Nurse leaders have a significant responsibility when it comes to the question of budgeting in a healthcare facility. They collaborate with the finance department to set goals as well as design the actual budget. After developing and updating it, they submit to the administration and, ultimately, the board of directors for approval, after which a fiscal year begins. However, the most critical issues that nurse leaders experience during this process include remaining competitive in the consumer-focused environment and maintaining a patient-driven segment (Rivers & Glover, 2008). Within the healthcare sector, competition has a significant influence on various relational perspectives. For instance, there is a close connection between the provision of quality healthcare and the level of competition that a health facility has compared to its business rivals. Therefore, nurse managers encounter challenges in trying to balance the two concepts while conducting budgeting activities. Sometimes providing quality medical services may restrain the budget in terms of purchasing resources that will give the best care. However, with time, the enhanced quality leads to decreased costs due to increased patient satisfaction. Besides, maintaining a customer-driven segment enables healthcare organizations to gain deeper insights that are useful in determining the most appropriate type of providers, services, and resources that a health facility can place in various sectors of health.
Preparing to Handle the Minimum Staffing Requirements
Nurse leaders should have adequate preparation on how to handle the minimum staff requirement by attending the continuous nursing education programs. Making learning a constant process in nursing contribute significantly to improving the skill and knowledge of the nurse managers about patient care. The nursing profession is a dynamic practice because the care standards keep on changing. Therefore, education is a fundamental factor in enabling them to enhance the quality of life of the patients they serve by gaining new information that they can implement to improve patient outcomes (Agyepong & Okyere, 2018). Therefore, one should not underestimate the role of continuous education programs in keeping the nurses updated. Another way to prepare is by conducting a proper distribution of skills to a variety of patients to avoid hampering the quality services. Hence, nurse leaders should come up with appropriate measures o determining nurses who can provide the best services and address the diverse needs of the clients. Besides, they should allow the patients and staff to give feedback and use it to improve the quality of healthcare. Proper communication is an essential factor because it helps to eliminate any miscommunications or unwanted incidences in a healthcare organization.
Alternative Budgeting Processes
Apart from the department budget approach, other alternative budgeting processes include priority-based, zero-based, fixed as well as continuous budgets. Priority-based budgeting is a process used by the nurse leaders as well as the finance departments to understand the values of the communities and utilize the knowledge to provide flexible services that meet the changing needs of the patients and society at large. The purpose is to reduce costs and allocate resources to the most high-priority areas of the health sector. Zero-based budgeting involves justifying and approving all the expenses at every new period. The process begins at zero bases, and nurse leaders conduct an organizational analysis for its needs and costs. A fixed or flexed budget is one that does not incur any change. This scenario implies that this kind of budget neither increases or decreases in volume. The continuous budgeting process refers to the practice of revising the whole set of budgets for the remaining periods as well as adding new budgets to replace those that belong to the elapsed periods (Frow et al., 2010). This kind of budgeting removes rigidity and provide quicker reactions to the changing conditions from the typical annual budgeting.
Nurse leaders play a pivotal role when it comes to the issue of budgeting in a healthcare facility. They set goals and design the actual budget before submitting it to the administration and, ultimately, the board of directors for approval. Therefore, there is a need to have the proper knowledge and understanding of different types of budgeting processes and collaborate with the finance department to ensure a successful operation budgeting.