NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget

Assessment 2 Preparing and Managing an Operating Budget

Student Name

Capella University

NURS-FPX 6216 Advanced Finance and Operations Management

Prof. Name

Date

Preparing and Managing the Operation Budget

  Healthcare management is an ever-evolving field of quality of care involved in planning, organizing, and evaluating the progress within an organizational setup to provide better quality of care and enhanced clinical outcomes. Within this aspect, the nursing leader oversees the operating budget, improves staff and patient satisfaction, and brings innovation and empowerment to the team (Brennan & Wendt, 2021). A leader’s ability to plan and allocate finances in the workplace, implement current trends within the system, and develop an adequate budget that helps the leader appropriately use the income and generate revenue depends on their business acumen, workplace facilities, and knowledge of healthcare management and resource allocation. Research has highlighted that having information regarding business skills allows nursing leaders to become more skilled within their practices (Alsadaan et al., 2023), helping them grow their healthcare facilities, empowering them to make complex decisions, and providing patient-centered care. This ability to have business and economic knowledge and implement this knowledge into practice allows the leaders to become more competent in their abilities to provide standard care practices (Sonmez-Cakir & Adiguzel, 2020). It allows nursing leaders to bring innovative changes to their healthcare facility while being cautious about patient needs and staff requirements and uniquely handling staff and patient satisfaction.

NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget

Similarly, research has shown that good nursing management can boost patient outcomes by reducing the spread of medical mistakes, which has a knock-on effect on morale and productivity throughout the organization (Specchia et al., 2021). Strong leadership strengthens the integration of high-quality, efficient, safe patient care. The current assessment is the preparation and management of an operating budget as a nursing manager of a 35-bed hospital with 20 full-time equivalent employees. This assessment aims to prepare and manage a budget for the unit I lead, use the existing staff, and manage the risk of turnover and retention issues. Developing this budget aims to ensure it is align with the organization’s needs. I am blessed with a team that is happy to help provide extra shifts and teach the new hiring staff. However, I planned to provide overtime compensation. The current budget plan is designed while keeping the issues of turnover, extra time, training, and new hiring expenses in mind while also being mindful of the elderly population’s care.

Operating Budget 

 An operating budget is a comprehensive estimate of an organization’s expenses and revenue over a specific period. It is planned as a goal of what to expect during a specified period and guides how much money the organization will need to operate. It is an estimated cost prepared to manage the expenses based on the fixed and varying costs usually prepared for a year, including the expected expenses and predicted revenue generated throughout the year. The expenses dedicated to a small hospital are medical supplies, utilization, bills, training and development expenses, appraisals, bonuses, devices, and technology maintenance expenses (Abdulsalam & Schneller, 2019). All these elements are essential for staff satisfaction and retention rates, while revenue is based on patient satisfaction with hospital services, research grants, and charity funding.  The budget for my facility was planned to improve staff retention and satisfaction while managing the budget to enhance patient-centered care. I designed an operating budget for one year, dividing it into three quarters for analyzing and evaluating the plan to ensure that it is aligned with the organizational goals, serves the purpose of patient care, and enhances staff retention. The current budget stresses two aspects: retention of staff and patient-centered care. The objective is to increase staff retention through performance reviews, bonuses, the integration of telehealth, and team-building training. At the same time, patient-centered care primarily focuses on modifying infrastructure, acquiring medical supplies, and evaluating. Studies have shown that staff retention and patient satisfaction help improve clinical outcomes, ensuring optimal organizational benefits for both staff and patients (Specchia et al., 2021).

NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget

For the development of an adequate budget, it is essential to gather baseline data that can help to collect information regarding the current status of the organization. The aim of utilizing these two strategies for data gathering is to source data from internal and external sources of information to gain better insight into the previous budget, the loopholes, issues, and needs of the hospital, helping the nurse leader accumulate information into more comprehensive trends for budgeting. The SWOT analysis helps identify the organization’s strengths, weaknesses, opportunities, and threats to help evaluate the use of monetary funds. The yearly expenses are based on staff salaries, the allocated budget for new hiring, overtime compensation training, appraisal, medical supplies, medication assessment, research, technology maintenance, hygiene protocol management, and patient surveys. At the same time, revenue is based on patient care, research grants, charity funds, medical aid, and staff retention. However, during the preparation, management, or execution of the operating budget, there can be a few uncertainties regarding the expenses associated with adverse events, emergent dealings, lack of motivation or brain drains, and patient influx issues, which may lead to an unexpected expense increase or require immediate allocation of resources. 

Table 1 (a): 

Budget category and the Expense per year (USD$)
Budget Category 
Expense Per Year (USD $)
Staff Salaries  800,000
New hiring  300,000
Compensation of Budget 200,000
Appraisal and bonuses  300,000
Assessment funds  100,000
Medical supplies  200,000
Medication  400,000
Research and training  300,000
Maintenance of Technology 150,000
Hygiene management  200,000
Total expense  2,950,000

Table 1(b)

Budget Category and the Revenue per Year (USD$)
Category 
Revenue Per Year (USD$)
Patient care  900,000
Research grants  350,000
Charitable Funds  900,000
Medical aids  700,000
Staff retention  500,000
Total Revenue  3,350,000
The current estimation of the expense and revenue highlights the revenue outpacing the expense. The budget helps explain how the revenue outpaces the estimated expenses, such as hiring and compensation, which can be quickly recovered through staff retention and keeping the money safe. Similarly, the money gathered through training can be overcome through grants and donations, helping the organization to have a better return on investment (ROI).

Budget Creation and Designing

 The design and creation of a budget is a systematic and structured process that involves careful planning, analysis, and decision-making while separating the conflicting data to maintain consistency and transparency while ensuring that the data is based on actual information and is financially reliable. The budget is designed through strategic planning and budgeting. In particular, the budget objectives are defined by gathering information from previous trends and highlighting factors that play a significant role in budget creation and design. Research has highlighted organizations’ economic conditions, available resources, and patient expectations as significant factors in creating and designing a healthcare budget (Nilsen et al., 2020). As the economic conditions of the organization are kept in mind while designing the budget, it is solely based on the availability of research that can be allocated or outsourced and how much expense would be incurred. The need analysis conducted before resource allocation can help in the correct allocation of the resources. Similarly, expectations and patient and staff retention play a massive role in highlighting the organization’s strengths, weaknesses, threats, and opportunities to grow. Similarly, it is essential to understand that, with changing economic demands, the budget may differ due to the availability of these resources.

NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget

  Our budget is designed by gathering data from resources such as baseline assessments and need-based analysis. Then, the data is analyzed through SWOT analysis, which helps to create a division on the prior collected data, helping the organization to comprehensively evaluate the data spread, strengths, weaknesses, threats, and opportunities to help identify the key factors such as appraisal, salaries, increments, and other benefits to help the budget become more people-friendly and effective. After this, the budget is allocated to different areas such as services, maintenance, and labor, and then the plan is documented, highlighting each retention initiative and its alignment with the organization’s financial plan. Furthermore, the plan is then monitored and evaluated while keeping a loop of flexibility within the budget for unforeseeable circumstances that help the organization adjust timely. However, it was essential to acknowledge conflicting information while developing a budget, such as the estimation of expenses and projection of revenue, as the cost can vary due to different rates and vendor demands for different departments based on varying assumptions such as inflation, changes in market trends, sales forecasts, patient preferences, and risk assessments.

Strategic Plan and Evaluation Criteria

Developing a strategic plan is a comprehensive process that begins with aligning the financial plan with the organization’s mission. Strategic planning starts with defining precise goals that the organization supports and that are measurable and attainable. Strategic planning caters to the current needs, evaluates the current resources, helps identify the uncertainty within the system, and prepares staff and leaders to adjust along with it. Our budgeting was based on employee retention and patient-centered care. Both of these goals are the goals of our organization and are interlinked, as patient-centered care is only possible when skilled employees are retained and satisfied. The executive leaders are more likely to accept the budget as the rationale for each budget expenditure has been provided with the aim of clarifying the need for the change. The budget has some nice items, such as lounge renovations for the nursing staff to provide better infrastructural changes; however, these changes are covered in the already presented budget. The main focus of the budget is to reduce turnover, increase patient-centered care and to improve the skillset of the professionals. Thus, reducing turnover and increasing the retention rate of skilled employees is imperative. The strategic plan developed was:

Employee Retention

 Employee retention is based on retaining staff through competitive compensation and benefit packages. The aim is to foster a positive working space culture that holds critical values of diversity, acceptance, and inclusivity while the well-being of the staff holds utmost importance. Staff retention helps improve the organization’s function by allowing it to work with skilled professionals (Weyman et al., 2023). Similarly, many employees are ready to work overtime; benefits and compensation should be provided; salaries will be revised; and performance-based increments can help the staff feel loved, valued, and taken care of, helping them bond with the organization and enhance satisfaction. Similarly, developing market-competitive packages, providing advancement opportunities, and developing inter-professional growth programs can help increase employee retention. Employee retention can be rated annually to reduce turnover. An employee satisfaction survey and setting benchmarks can help evaluate employee retention rates.

Patient-Centered Care 

 The aim is to enhance patient engagement and provide coordinated care through effective communication and education. Implementing a patient feedback system and promoting a culture of empathy and personalized care can help engage the patient in their care (Kwame & Petrucka, 2021). While this facility is for older adults, these changes can help improve their care management. It can be evaluated through patient surveys and feedback that can help gauge satisfaction levels and reduce the number of complaints, readmissions, and hospital-acquired infections.

Training and Development

  The training and development can establish comprehensive training for the newly hired and already present staff through a design curriculum and encourage cross-functional team training and skill development. Similarly, investment in leadership development programs can help run the operation smoothly. It evaluate through clinical quality indicators such as reducing the infection rate, patient outcomes, positive change in interpersonal collaboration, and calculating the return on investment for training by evaluating employee performance, patient outcomes, and cost savings.

Ongoing Budget Management

 The process of budgeting starts after we develop a budget. Budget management is an ongoing process where the abovementioned budget will run cyclically, requiring analysis, development, management, and continuous monitoring. The approach for the ongoing budget will be based on two phases: first, the data will be collected every three months, which will help assess the long-term sustainability of the budget through reports and tracking quality indicators such as reducing medical errors, hospital-acquired infections, and staff retention. Every department will provide quarterly reports, and a SWOT analysis will be conducted to evaluate the data gathered and bring about changes in the budget. It is based on the assumption that positive environmental changes, appreciation, and increased staff satisfaction can help eradicate clinical quality issues.

NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget

Similarly, another assumption is that the training can help empower the staff to become confident in their practice and utilize patient-centered care, which reduces defensive treatments. Lastly, the whole budget approach is based on the underlying assumption that positive change within the environment can help improve clinical outcomes and staff satisfaction, leading to long-term success and revenue generation. The purpose of the current spending plan is to reduce non-productive time by keeping track of employees’ clock-in and clock-out times, evaluating the quality of overtime, assigning appropriate responsibilities and benefits to employees, providing paid time certificates, or compensating in the form of bonuses and appraisals. Similarly, fostering a culture of work life balance to promote nurses shift work routines to provide them rest and enhance their productivity. Studies have highlighted that overtime impacts work productivity, reduces morale, and has a psychological effect (Wong et al., 2019). Moreover, the ongoing budget for equipment and supplies is associated with maintenance that can be managed by using technology in a accurate manner and utilizing services within the capacity limit. 

Conclusion

 In conclusion, the current assessment was based on developing an operational budget for a 35-bed small facility with 20 equivalent employees. The budget focus on staff retention and providing patient-centered care. The planned budget developes by conducting a need analysis. Using a balanced scorecard and SWOT analysis to identify trends, opportunities, and threats to help the organization combat the turnover issue while simultaneously working on patient-centered care. Further, staff retention, patient-centered care, and training and development were suggested to improve turnover issues, while timely evaluation and adjustment can help improve the budgeting process.
References 
Abdulsalam, Y., & Schneller, E. (2019). Hospital supply expenses: An important ingredient in health services research. Medical Care Research and Review, 76(2), 240–252. https://doi.org/10.1177/1077558717719928  Alsadaan, N., Salameh, B., Reshia, F. A. A. E., Alruwaili, R. F., Alruwaili, M., Awad Ali, S. A., Alruwaili, A. N., Hefnawy, G. R., Alshammari, M. S. S., Alrumayh, A. G. R., Alruwaili, A. O., & Jones, L. K. (2023). Impact of nurse leaders behaviors on nursing staff performance: A systematic review of literature. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 60, 004695802311785. https://doi.org/10.1177/00469580231178528  Brennan, D., & Wendt, L. (2021). Increasing quality and patient outcomes with staff engagement and shared governance. OJIN: The Online Journal of Issues in Nursing, 26(2). https://doi.org/10.3912/OJIN.Vol26No02PPT23 Kwame, A., & Petrucka, P. M. (2021). A literature-based study of patient-centered care and communication in nurse-patient interactions: Barriers, facilitators, and the way forward. BMC Nursing, 20(1), 158. https://doi.org/10.1186/s12912-021-00684-2 
NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget
Nilsen, P., Seing, I., Ericsson, C., Birken, S. A., & Schildmeijer, K. (2020). Characteristics of successful changes in health care organizations: An interview study with physicians, registered nurses and assistant nurses. BMC Health Services Research, 20(1), 147. https://doi.org/10.1186/s12913-020-4999-8  Sonmez Cakir, F., & Adiguzel, Z. (2020). Analysis of leader effectiveness in organization and knowledge sharing behavior on employees and organization. SAGE Open, 10(1), 215824402091463. https://doi.org/10.1177/2158244020914634 Specchia, M. L., Cozzolino, M. R., Carini, E., Di Pilla, A., Galletti, C., Ricciardi, W., & Damiani, G. (2021). Leadership styles and nurses’ job satisfaction. Results of a systematic review. International Journal of Environmental Research and Public Health, 18(4), 1552. https://doi.org/10.3390/ijerph18041552 Weyman, A. K., Glendinning, R., Costa, J., O’Hara, R., Roy, D., & Nolan, P. (2023). Should I stay or should I go? NHS staff retention in the post COVID-19 world: Challenges and prospects. https://doi.org/10.5281/zenodo.7611656  Wong, K., Chan, A. H. S., & Ngan, S. C. (2019). The effect of long working hours and overtime on occupational health: A meta-analysis of evidence from 1998 to 2018. International Journal of Environmental Research and Public Health, 16(12), 2102. https://doi.org/10.3390/ijerph16122102 

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