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NURS FPX 6216 Assessment 1
Mentor Interview
Budgeting and financial control is one of the key competencies that are relevant for the nurse leaders as these skills are helpful in the process of managing the financial issues within the health care systems. As per a cross-sectional survey conducted in 2023 among 419 nurse leaders by the American Association of Nurse Executives (AONE, 2023), 87% of the nurse leaders ranked budget as a vital factor in attaining organizational objectives.
In this assessment, the author aims to provide an idea about the lessons gathered from an interview with Sarah Johnson, the Chief Nursing Officer (CNO) at Riverside Health System; she is credited for effectively managing both operation and capital budgets.
Sarah’s practical knowledge and an objective to enhance the operating performance in relation to a reasonable balance between an organization’s financial performance and the quality of patient care offered in constantly evolving healthcare contexts also adds significant insight.
Process of Managing an Operations Budget
Budgeting in healthcare needs to be unique in that operating as well as capital budgets are handled differently with an undertaking of specific processes to its management for the sake of financial stability and goal achievement.
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Managing an Operating Budget
An operating budget in healthcare is a necessary part of an organization’s day to day functioning as it considers necessary expenditure including staff salaries, expendable materials, electricity, water, and maintenance among others.
Those nurse leaders in charge of the operating budgets have the responsibility of closely observing the amount spent against amount earned and make necessary changes to balance the budget all the time. This has to do with elaborated planning and sometimes on an annual basis and an appreciation of operational requirements and patients’ needs.
It has flexibility in the constant changes such as the variation in patient turnover, the changes in the regulations, and the other expended incomes that hamper the process of working and may require details from the finance team and other head of departments.
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Knowledge Gaps and Uncertainties
Controlling operating budgets entails several factors that are regarded as risks. For example, the determination of staffing ratios is still a contentious issue because the level of patients’ severity and seasonal changes vary (Smith & Jones, 2023).
Also, alteration of healthcare policies and act entails budget unpredictability in terms of estimating financial prospect and resource procurement (Johnson et al. , 2022). Another problem is how to distribute the costs of the new healthcare technologies implemented in the year and how much to invest: is it more reasonable and effective to invest in a new technology, or to get more resources through efficiency increases (Brown, 2024).
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Managing a Capital Budget
On the other hand, a capital budget consists of expenditures made in the form of long-term tangible assets and infrastructure that can significantly transform the environment of delivering patient care and organizational operations.
These capitals consist of purchasing new equipment, expansion or upgrading of facilities as well as installation of superior technology. Capital budgets are different from operating budgets since they are prepared for longer periods of over two years include feasibility studies, ROI and approval processes.
Due to limitations in funding, nurse leaders are required to equate capital costs with possible savings over time and organization’s objectives while having a primary focus on economical activity.
Process of Allocating Resources for Labor, Equipment, and Services
Resource allocation of labor starts with the need to establish the load that the patients are likely to present as well as the overall functioning of the facility. One of the roles of nurse leaders includes establishing staffing patterns that are best suited to cater for patients’ needs in regard to acuity, workload and legal frameworks.
This process involves the use of the personnel forecasting of attendance, determining shifts, and regulating of overtime to ensure effectivity and excellent outcomes in the patient care processes (Smith & Johnson, 2020).
Other assumptions that are associated with labor include availability of skilled workforce, competent legal compliance as well as training and development to improve on employee’s efficiency in their operations (Jones et al. , 2021).
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Equipment Allocation
In articulating resource allocation for equipment some of these include: Technological requirement analysis, Equipment life cycle determination and resource allocation for acquisition or replacement.
Buchan and Maxwell (2016) also establish that nurse leaders work with clinicians and information technology experts to assess equipment competence, and the cost of maintenance, and the integration with other systems by clinical teams (Williams & Brown, 2019).
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These are equipment vendors’ reliability, technological changes affecting equipment productivity, and adoption of equipment usage records in future investment and operational improvements (Davis et al., 2023).
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Service Allocation
Budgeting for services relates to expenditures for services that provide support functions that are pertinent to patient care as well as the organization’s functionality. This includes the acquisition of medical equipment, diagnostic and treatment commodities which comprise of drugs, and other hospital-related facilities like pathological testing and radiology respectively.
Nurse leaders bargain for purchases and services and ensure that consumers are utilizing services optimally; they also find ways to cut expenses while maintaining high quality care (Adams & Martinez, 2020). Some assumptions are suppliers and being loyal to the company, dealers being compliant with relevant regulatory requirements, and that inventory management systems should beused since they enhance resource utilization and control of excess inventory (Garcia & Nguyen, 2022).
Effective Approach
In healthcare management, an organization’s planning for profitability and fiscal success involves the use of comprehensive strategies that meet the organization’s vision and mission, goals and objectives, while at the same time adhering to proper resource management and proper delivery of health services to patients.
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Strategic Cost Management
A practical plan involves start at the top with ways to manage costs more efficiently by engage the help of financial specialists to work with the nurse managers on establishing better control measures on the operational expenses while at the same time not compromising on the quality of services to be rendered to the patients.
This includes periodic budget assessments, the analysis of services’ costs and benefits, as well as the negotiation of attractive terms with vendors (Smith & Davis, 2020). Applying lean principles and eradicating waste/mandatory costs improves the organizations’ revenue and increases profitability in the healthcare sector (Adams et al. , 2021).
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Revenue Diversification
Managing the money issues related to revenues is another aspect of planning that is pivotal when one contemplates fiscal success: deep and diversification. Nurse leaders consider ways in which they can develop new services, market to new populations and increase reimbursement mechanisms through accurate documentation (Brown & Martinez, 2019).
Maximising resource use and innovation through the use of technology and data analytics, such organisations were able to discover the availability of resources that had not been profitable enough to be invested in earlier and align them to the market forces that determine sustainability of revenue growth and adequate organisational capital (Garcia et al. , 2022).
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Alternative Approach Consideration
As mentioned before, other initiatives like the value-based models could replace such approaches as cost management strategies and revenue innovations. This model aims to move from traditional models of reimbursing facilities by the services provided to using models based on outcomes such as deciding on the expenditure and care plans based on health outcomes, satisfaction of patients, and preventive care (Jones & Nguyen, 2023).
Through such models intact monetary motiviation with the general patient outcomes, there is enhanced well-being of the healthcare organizations because the expenses of health care have been minimized.
Nurse Leader’s Approach to Budget Management
Evaluating how a nurse leader of a healthcare organization handles the management of a budget is vital in today’s economy for the planning and execution of financial responsibilities. Evaluation can be dynamic in the sense that it is a process of implementing strict measures culled from credible sources of information that focuses on core aspects of financial stewardship and direction.
Higdon and Young (2021) disclosed that there is one basic measure which is the area of what may be termed ‘financial viability and disclosure’. As a part of this, there is the consideration of the manner in which the nurse leader plans for budgets and disseminates fiscal data throughout the entity.
They will fully embody the competency by always breathing, moving, living and thinking finance because a leader who is in charge of a company or organization must always make sure that the figures that have been budgeted for correspond to the actual financial situation on the ground.
The preparation of financial statements through the processes of transparency enables stakeholders to put their trust in organizations and enforce accountability of organizations.
NURS FPX 6216 Assessment 1 Mentor Interview
The other element or factor that is used in the assessment of budget management is strategic alignment. Budgeting should therefore be subordinate to the goals and strategic direction of the organization but at the same time be meaningful to the specific unit led by the nurse.
This encompasses not only the right distribution of resources but also the fact that financial plans and proposals help with achieving strategic goals, for instance enhancing patients’ health or enhancing service provision. When strategic alignment is assessed it is possible to determine the leader’s efficiency to prioritize specific activities that are most effective to the mission and vision of the organization.
Resource utilisation is another consideration applied in the evaluation of budget management as well. As far as organizational resources are concerned, nurse leaders are accountable for the fact that available personnel, equipment, and supplies should be used most efficiently and cost-effectively in healthcare operations.
Activities such as waste control, procurement and contract management, and the deployment of technology for resource management are part of the performance of leadership in this hierarchy. This means that the assessment of resources yields information about the leader’s capacity to obtain a similar or even enhanced value of output from other resources while still offering the best service delivery.
Conclusion
The mentor interview with the experienced nurse leader was very helpful and insightful on the approach towards the management of the budget in the healthcare organization. In the interview process, several essential portions of budgeting were made clear; these include workable suggestions & informative lessons vital for my function as a Nurse Manager at a newly developing Urgent Care facility.
Firstly, the interview proved that the management of the company pays much attention to strategic alignment when working on the budget. The issue of budgeting framework was expounded by the mentor to follow the organizational goals and objectives, where priority is given to the use of financial resources that will facilitate improvement of patient care and efficiency of service delivery.
Secondly, the second research question concerned with the management of budget variances also featured as another issue during the interview. Finally, the techniques to identify and control the budget differences was explained by the mentor in detail, illustrating that the budget differences need to be controlled proactively as they change constantly and thus constant checks and balance and requisite corrective measures should be taken to avoid the imbalance of financial resources.
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NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget
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