Operating budget is the most appropriate budget for managing unit cost. The operating budget is a financial plan that takes into consideration all of the day-to-day activities that involve taking care of patients. A units revenue, which is the actual charges, are based off of the total number of days patients spend on the unit or the average daily census. Expenses include all of the cost for paying nursing staff to work, the cost of all supplies that are necessary to provide patient care, and the cost of any additional resources that may be necessary for patient care. The unit expenses can be broken down into two main types of expenses. One, is the employment cost. The employment cost is the largest part of any units budget. This is due
I attended the Saturday Lab 1 session discussing the Denison Specialty Hospital case study. In our session, we had a through discussion into the different budget terminology. I learned about the difference between accrual and cash accounting methods, which is based on the timing of when the revenue and expenses are recognized. I also learned about responsibility centers as an organizational unit under the supervision of a manager, who is responsible for its activities and results. In addition, the manager is accountable for the budget of the department that they head. Therefore, a centralized form of management in developing the budget because it makes easier to because the information for the department budget is located
The purpose of financial measurement in healthcare is to provide the community with the services it needs, at a clinically acceptable level of quality, at a publicly responsive level of amenity, at the least possible cost. This is done by providing healthcare finance managers with accounting and finance information to help accomplish the purpose of the organization (Nowicki, 2015). When making accounting decisions about budgeting and inventory control, an understanding of economics, statistics, and operations research is needed. Major Financial Measures
Operating budgets are budgets that deal mainly with the day-to-day operations of a facility. This may include wages, utilities, rent, and items purchased that have the intent of lasting less than a year (Johnston, n.d). This type budget provides the needed information regarding the cash on hand needed to operate the facility during a fiscal year. Capital expenditure budgets deal with more long term items such as equipment or property. As stated by Johnston (n.d.), it is necessary to have a capital budget for continued growth of the business. You complete this task by purchasing assets that produce an income. Capital expenditure budget have the potential to cover a five- to ten-year period (Baker & Baker, 2014, p.174). Items included in the capital expenditure budget may also include loan interest and bondholder's interest. The operating budget and the capital expenditure budget interact with one another. To demonstrate an example: a healthcare facility purchases a chemistry analyzer for its clinical laboratory. The chemistry analyzer is placed in the capital expenditure budget, but the maintenance for the analyzer is placed in the operational budget. The capital expenditure expense is the chemistry analyzer, but the materials used to maintain the chemistry analyzer are operational expense.
Buchbinder, S. B., & Shanks, N. A. (2007). Managing Costs and Revenues. In (Ed.), Introduction to Healthcare Management ( ed., p. pp. -). : . []. doi: Retrieved from
The ability of a unit to survive is largely dependent upon the hospitals internal financial budgetary performance and the external needs within the community. Developing a financial budget is a process that should use teamwork to plan and implement in order to be effective. The budget sets perimeters for administrators to follow throughout the year, allowing the director to report variances while providing guidance to maintain a minimum variance and adjust when possible (Finkler & McHugh, 2008). By using all department managers in the planning process of the new budget, the nurse executive is able to develop effective strategies for all departments while investing in the goals. This eliminates many problems associated with budget and identifies areas that need improvement or expansion. Because of the competition, declining margins, and other economic pressures, nurse executives need to take steps to control costs and increase revenues for this unit. The overall goal of the financial performance within the organization is to meet the total budgetary needs of the unit to produce favorable outcomes. My focus will be to propose the expansion of a new Joint Replacement Unit (JRU) within the hospital, while identifying the major operating components of the budget for this organization. The importance of reviewing the budget for a newly developed unit is to allow the nurse executive and administrative team to manage the existing organizational programs within in the facility, plan for goal accomplishments for the new unit, while controlling costs.
...ng stressed. Option 1 may lead to excessive pressure on doctors, and hence poor performance in service delivery. In medical field, it is necessary to allow the doctors to perform accurately on a consistent basis.
The budget process, according to Marshall, is to "develop and communicate" how an organization' economic, industry, and organizational strategies will be effected within the budgeted time frame. (p.497) People within the organization from planners, economists, and managers contribute facets of the strategic budget process in order to meet organizational needs. Upper management then typically approves those budgets. The operating budget is the forecast of activity that encompasses the results of the budget ...
Utilization management has several basic components. Identify one of those components and discuss how it is used to manage cost of medical services. What are the downsides to managing cost through utilization management, if any?
Many small businesses are switching to a health spending account (HSA) because it gives them the ability to give their employees better, more flexible benefits. There’s also the added incentive that employees’ benefits are all tax-free, and employers get a tax deduction come tax time. An HSA replaces the traditional workplace benefits a company usually offers. Instead of employees having a set amount of money they can spend per health category (such as $200 a year for physiotherapy), employees are given a lump sum of money in their health spending accounts by their employer, and they can use that money for their healthcare in whatever manner they see fit.
There are a couple of problems affecting the surgical services department. One of them is that the unit /hospital pays a lot of money for surgical supplies and equipment. The second problem is labor and productivity. The two problems are included in the operational and personnel budget. These types of budgets are the highest cost to the department; personnel budget being the highest then the operational budget (Marquis & Huston, 2012).
“Nursing is an art, and if it is to be made an art, requires as exclusive a devotion, as hard a preparation, as any painter’s or sculptor’s work...” (Nightingale, 1868)
Quantitative plans are called budgets. Budgets are prepared to impose cost controls on the activities of an organization (Chenhall, 1986).Budgets are then used to evaluate the performance of the management and budget itself is considered as a standard to evaluate the performance Solomon, 1956). The purpose of the budget is also to implement the strategy of the organization and communicate it to the employees of the organization Rickards (2006). The change in the external environment has led to the change in the budgeting approaches from the initial cash based budgets to the zerio based budgets (Bovaird, 2007).
Resources have always been inadequate for food, economics and healthcare and all scarce resources are rationed in one way or another. Healthcare resources can be in the forms of medicine, machinery, expensive treatment and organ transplantation. For decades, allocation of healthcare resources in an equitable manner has always been the subject of debate, concern and analysis, yet the issue has persistently resisted resolution. Scarcity of resources for healthcare and issue of allocation is permanent and inescapable (Harris, “Deciding between Patients”). Scarcity can be defined in general, in emergency and in crises as well as shortage of certain kind of treatment, medicine or organs. As a result of scarcity of resources, and some people may be left untreated or die when certain patients are prioritized and intention of is that everyone will ultimately be treated (Harris, 2009: 335). Allocation of limited resources is an ethical issue since it is vital to address the question of justice and making fair decisions. Ethical judgments and concerns are part of daily choice in allocation of health resources and also to ensure these resources are allocated in a fair and just way. This paper will explore how QALYs, ageism and responsibility in particular influence the allocation of healthcare resources in general through the lens of justice, equity, social worth, fairness, and deservingness.
...ve a medical treatment section then they may need some special equipment and need to budget for that. Utilities is a must so this defiantly needs to be put in the budget to insure there is enough money to pay for the utilities otherwise the facility will be closed down. Lastly, emergency money is optional this is used in case the agency wants to have an emergency fund to either support one of the other areas if need or if a client needs it. There is no set amount for it and it will not harm the agency it is helpful if money is needed somewhere.
The healthcare industry of the Bahamas is divided into two sectors, public and private health care. There are five hospitals, which includes two private hospitals and three public hospitals, and numerous public community clinics along with the many private facilities through which medical services are rendered (Doctors Hospital, 2009). The Princess Margaret Hospital, which is the main public facility, according to Smith (2010) in 1905 was people’s last choice when seeking medical attention. Smith described the then hospital as being partitioned into four areas, “for the sick, indigent, lepers and insane” (Smith, 2010). Smith (2010) further expressed that the medical services were free and those that were financially stable paid for treatment to be carried out at their homes. Today, 108 years later, much has changed within health care arena. Presently, there is an increase in the number of persons resorting to the public hospitals and public clinics for medical attention. For those that are in good financially standings they make use of private hospitals or/and other private medical facilities. While some people may use the public medical facilities by choice there are others whom, because of their income or lack of income, have no other alternative but to fall at the hands of the public services. Too, for many years the Bahamas has had the problem of immigrants from Haiti crossing the Bahamian borders illegally and this therefore results in an increase in the funds allocated for the health care industry. According to McCartney (2010) the Haitian nationals accounted for 11.5% of the Bahamas population, hence adding to the government health care budget (McCartney, 2013). The reality is that the Bahamas is far from winning...