Financial Operations in Nursing Administration

• What are the responsibilities of someone in your position (e.g., VP, CNO, Director, or Manager) in the development of the annual budget?
Nurse Manager
Having business acumen is fundamental to becoming a Chief Nursing Officer (CNO). In some healthcare institutions CNOs are charged with overseeing large aspects of the annual budget of that facility. It is the responsibility of the nurse manager to design the organization’s budget and set goals for the center they represent or at least their nursing unit (Rundio & Sigma Theta Tau International, 2016). This is usually done in close collaboration with finance department. After the development of the budget and after it has been updated, it is then forwarded to the administrative unit and thereafter to the directors for approval. The fiscal year begins following the approval of the budget process (Rundio & Sigma Theta Tau International, 2016). The hospital must deliver the planned programs and services. It must be noted that the budgeting process is dynamic and ongoing. It is important to collect feedback in the budget management process.
The workflow in budget development entails the following stages: Collection of relevant data, service planning, activities planning, plan implementation, budget monitoring, executing corrective measures whenever required to (Rundio, 2016). One of the critical roles of the nurse manager in the chosen organization is to collect relevant information. Ultimately the department in charge of finances collects that information although it has to be in close cooperation with nurse managers. This way it becomes possible to create functional budgets. The information collected by the Nurse Manager includes:
Services provided by the institution: It is the nurse manager who collects this data. The Nurse Manager understands best the kind of services that are currently on offer and the services that will be needed in future. For instance the nurse manager might want to have the bed capacity in the hospital wards increased on a nursing unit that is underutilized. Often the nurse manager will be aware of a new pediatrician or neurosurgeon who is scheduled to come in and that this might increase the volumes in the facility. With this understanding the Nurse Manager will request for increased bed capacity.
Patient Mix: This is in regard to care complexity. The greater the care complexity the more reimbursement needed through budgeting. Each nursing facility and hospital evaluates its general patient mix index. This patient mix is generated for the entire organization by finance department. If the patient index is high then the reimbursement required will also be high.
The Nurse Manager is also responsible for providing information about the care standards, planning service changes with respect to prevailing needs, planning for resource utilization changes, and patient day hours.
• What financial aspect for which you are responsible has the most impact on the care of patients?
Patient care planning has the largest impact on the patients. As the Nurse Manager it is very important to have a comprehensive worldview of the prevailing and future facility needs. It is possible to compromise the standards of care if the Nurse Manager cannot foresee the need of more staffing in the emergency department or the need for more bed occupancy in light of a projection for more pediatric care needs. Everything around the hospital facility revolves around patient care. The budgeting process must take perfect care for the needs and interests of the patients. As the Nurse Manager it is fundamental that all the staffing, equipment, and occupancy needs etc. are foreseen beforehand and budgeted for. The finance department has little information with respect to the patient care needs. It is the Nurse Manager who must bring these things to the attention of the finance department in good time before the budget making process is completed.
• What are the responsibilities of other nurses on the administrative team (e.g., VP, CNO, Directors, Managers) regarding budgeting?
Other nurses like the CNO, VP and directors may get involved in the planning of services, planning of activities, and defending their proposals to the finance department and board of directors. In service planning the nurses must have awareness about the service types that need to be rendered in a specific fiscal year. The finance department may not be aware of each service detail provided. For instance the finance department may not be aware of the need to increase staffing in the emergency unit for better efficiency. The changes may require more staffing. The nurse administrators must bring this need to the attention of the finance department through budgeting. The nurse administrators will have to gather this information and communicate it to the finance department.
On planning of activities there may be a need to introduce some new treatment in the department. The nurse administrators will have to plan for the treatment accordingly. For instance the nurse administrators will be aware of the introduction of a new medication in the market that can be used to treat a certain condition better. Moreover, the nurse administrators may also know the cost of acquiring such medication in relation to the facility needs. To the contrary the finance department will not be aware of this need. The nurse administrators will have to come up with the budget for acquiring this new medication in the next fiscal year and present it to the finance department for consideration. If for instance the nurse administrators failed in their duty to bring this to the attention of the finance department then there would be a detrimental budget variance in the fiscal year. These would also destabilize the finance department making it necessary for them to inquire with the insurance company on whether they will reimburse the cost of the new treatment. It is for this reason that nurse administrators are fundamental during budgeting processes.
On defending the proposal the nurse administrators must be ready to defend everything they propose during budgeting. Due to the limited resources available only the critically urgent budgetary needs will be catered for. The department of nursing will often overstate the budgetary needs and staffing needs in comparison to what the finance department budgets for. It is important for the nursing department and finance department to be at consensus before the financial budget proposal can be presented to the administration.

• What impact do you have in your organization on controlling the rising costs of healthcare delivery?
In order to control the cost of healthcare the Nurse Manager is responsible for ensuring that all the budgetary processes are lean and effective. One way of achieving this austerity measure is through avoiding wastage and only employing the resources when it is absolutely necessary. If for instance there are staffing needs in the emergency department the first solution should be assessing the staffing levels in the facility and considering reallocation of duties before going for more staff. The Nurse Manager also encourages restocking of necessary tools and equipment on need basis (Emerick & Lewis, 2013). This means that the facility discourages bulk ordering of products and services. This way the expenditure is put on check at all times.
• When you assumed this position, for which area of financial management did you feel the least prepared?
As a Nurse Manager you are never prepared to evaluate facility needs and providing relevant data to the finance department for consideration. You will be least prepared for need analysis and cost estimation. The moment you assume that responsibility it becomes clear that patient care quality is primarily in your hands. The biggest challenge is making sure that every financial or budgeting decision made has a direct impact in enhancing patient care and alleviating emergency situations in the hospital. Predicting need and rolling out a financial plan beforehand to meet that need is definitely a momentous challenge.
• What would be your recommendation(s) to a new nurse administrator regarding financial management skills?
Any nurse administrator must be willing to learn and enhance their financial management skills. They must be able to foresee need and roll out a budgetary plan beforehand. For this reason every new nurse administrator must acquaint themselves with patient care and facility needs upon assuming that position. Each working day must be dedicated to identifying need and planning for financial solutions prior to the particular time that the solution is needed. The nurse administrator must also learn the skill of negotiating with the finance department and the facility administration. This requires certainty with the needs. Moreover, the nurse must also be careful not to be wasteful with finances (Yong, Saunders, Olsen & Institute of Medicine (U.S.), 2010). Every need must be judged as necessary and fundamental for the general good of the facility and the patients being served.





References
Emerick, T., & Lewis, A. (2013). Cracking health costs: How to cut your company's costs and provide employees better care. Hoboken, New Jersey: Wiley
Rundio, A., & Sigma Theta Tau International. (2016). the nurse manager's guide to budgeting & finance. Indianapolis, IN: Sigma Theta Tau International.
Rundio, A., (2016). Budget development for nurse managers. Reflections on Nursing Leadership. Retrieved 3 December, from https://www.reflectionsonnursingleadership.org/features/more-features/budget- development-for-the-nurse-manager
Yong, P. L., Saunders, R. S., Olsen, L. A., & Institute of Medicine (U.S.). (2010). the healthcare imperative: Lowering costs and improving outcomes: workshop series summary. Washington, D.C: National Academies Press.