Nurse Leadership/Management Role in Financial Management and Budgeting
Kimberly Lizama
Holy Names University
NURS 151 10 FS
December 6, 2010
Abstract
The following paper discusses the nurse manager’s/leader’s role in healthcare financial management and budgeting. The definition of a budget is a detailed financial plan. The nurse manager/leader is responsible in knowing and understanding the different types and budgets within the healthcare organization: operating, capital expenditure, and cash. The operating budget is the main budget the nurse manager/leader maintains an active role in for the healthcare organization by controlling personnel and supply costs. Collaboration with the nursing staff on the unit as well as other
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Each nursing unit is considered a cost center within the organization, with its own specific budget for personnel and supplies. The personnel budget, being the largest part of the operating budget, consists of multiple factors such as the average daily census, patient acuity, personnel required relating to full-time equivalents (FTEs), as well as productive and non-productive hours. The supplies include medical and office supplies, minor equipment, orientation and training, and travel expenses. Although budgets are based on assumptions, using the previous year’s expenses for personnel and supplies, helps the nurse manager/leader to accurately predict the next year’s budget. Lastly, the revenue budget is the final component of the operating budget which projects the income the organization will receive for providing care. Although nurse managers/leaders may not be involved in developing the revenue budget, having knowledge about it is essential for great decision-making. Another type of budget is the capital expenditure budget, which reflects expenses related to the purchase of major capital items (Stafford, 2007). Capital items are those that have a useful life of more than one year and must exceed a cost level specified by the organization such as $1000. If the item is below this cost, it is considered a routine operating cost. Capital
As the charge nurse of the acute care, the nurse interviewed is in charge of 6 employees in that specific department, but on the weekend she leads the entire hospital. Although being a nurse leader has its challenges, it’s great when everyone works together to achieve their goals and it becomes very fun. In regards to a budget, she has to conduct one for her responsibilities in infection control. This comes with many obstacles as it is hard to predict the budget for the entire year, and this was never taught to nurses in school or as part of job training (R. H., personal communication, November 12, 2016).
One of the major functions of a nurse manager is managing a budget and allocating resources necessary to manage the unit or facility effectively. “Major steps in the budgeting process include gathering information and planning, developing unit budgets, developing cash budgets, negotiating and revising, and using feedback to control budget results and improve future plans”(Yoder-Wise, 2012, p. 244). The nurse manager must be able to accommodate variances and acclimate the budget in both the projections and up-to-date expenditures. Proficiency in managing a unit level budget is essential for both a favorable variance and optimal patient outcomes. Budgeting entails reviewing revenues and expenses, staffing costs, supplies, and capital equipment costs (Contino, 2001). This case study examines personnel, overtime (OT), supplies, travel, equipment, and staff education and the manner in which management can address these factors.
American Association of College of Nursing (2012).White Paper on The Role of the Clinical Nurse Leader Retrived from: http://www.aacn.nche.edu/publications/white-papers/cnl
Nurse leaders are faced with issues or problems on a daily basis that are often expected and sometimes unexpected. It “comes with the territory” so to speak. If there were no issues to solve or hurdles to overcome the necessity of designating a leader would not seem quite as important. Nurse leaders can tackle issues that occur in their work environment using nursing theory to guide them. Nursing theory provides a framework that nurse leaders can use to implement interventions or changes to positively impact the staff they lead. This framework of the theory will set the standards for achieving the desired outcomes and is based on knowledge that is gleaned from practice and/or research.
Leadership and management are essential to any health care organization, balancing patient care, employees, physicians, and the organization. Nursing is founded on interpersonal relationships. As a people-oriented profession, nursing leadership styles are influenced by humanism. The mission, attitude, and behaviors of a health care organization begins with its leadership, which creates the direction and purpose of the organization. The purpose of this paper is to differentiate between leadership and management, describe views of leadership, and explain the
“Managers with leadership styles that seek and value contributions from staff, promote a climate in which information is shared effectively, promote decision making at the staff nurse level, exert position power, and influence coordination of work to provide a milieu that maintains a stable cadre of nurses”, (Boyle, Bott, Hansen, Woods & Taunton, 2009). This statement describes the large impact a leadership style can make on the work environment, and the morale of the team. In nursing history, several theories and leadership
No matter how great a nurse leader may be, every nurse leader has their strengths and weaknesses. My strengths include being compassionate, humble, and resilient. Whereas my biggest weakness as a leader is not having the appropriate skills to influence others to see things my way.
Leadership is all about having the right amount of heart and determination to help make a difference in someone’s life. It takes certain qualities to be considered a good leader. A leader should want to help inspire others to make a change and to be the best that they can be. A true leader does not need to feel powerful, instead they empower those around them. Throughout my life I have come across various leaders who have made an impact on my life. It takes a very special person to inspire and touch people’s lives. Leadership is so much deeper than having power and bossing people around.
The budget process may start with a sales forecast that describes "expected revenues from groups of products." (p. 485) Total revenues can be calculated based on a number of factors that include both the product markup as well as a fluctuating commodity price.
3). In this relationship, each must work through phases including conflict resolution and negotiation as part of the process. Transformational theory further explains leadership must include exhibiting a degree of emotional intelligence. This occurs when perceiving how others feel, understanding how the feelings lead to thinking, understanding the emotions, and managing emotions internally. In respects to this theory, emotional intelligence enhances this bi-directional relationship between the leader and the followers (Spears, 2002).
Healthcare changes occurring today along with shrinking budgets and reimbursement rates for hospitals has forced institution CEOs to do more with less. Changes and restructuring of various health facilities require nursing leaders with flexibility and adaptability. Nurse leaders must also consider budgetary constraints, cost effectiveness, patient safety, and quality care while maintaining focus on improved patient outcome. The responsibility of ensuring patients receive safe and high quality care belongs to every employee in the hospital, including support staff such as IV therapy. In this hospital, this led to the development of a nurse director position to oversee the
Leadership may mean different things to different people, the consensus opinion of experts in this field is that leadership is using power to direct and influence activities of people to achieve set goals or targets. Nursing leadership is all about every nurse providing, facilitating and promoting the best healthcare services to client and to the public. Leadership is a shared responsibility. (CNO 2012). The nursing profession need leaders that can build the capacity of nurses through mentoring, coaching, supporting, developing the expertise and management skills of nurses to make a difference to the quality of patient care at all levels of the profession ( McIntyre & McDonald, 2014 ). At the core of every leadership either political or managerial is power and how the leader uses it. While it is practically impossible to lead without power, how the nurse leader uses this power not only determine the leadership style but also the results or outcomes of what is achieved through the process.
“Since we are a small unit composed of mostly RNs, I sit down with my staff and we go over the budget together. It gives the staff a sense of proprietorship. This way I feel we are sharing the responsibilities and it helps them to understand why we cannot afford a piece of equipment at this time. I can usually depend on someone to think out of the box. Once we went “dumpster diving” for office supplies as one employee suggested. It is actually the hospital’s warehouse for materials nobody wanted. We savaged enough office supplies for the year and was able to purchase a high cost item the unit needed. Plus it was a team building effort.”
Staffing shortfalls in the medical community have been noted since the turn of the century (Coss, 2009). There are not enough professionals being adequately trained to handle the increased demand for complex health care (Stock, McDermott, & McDermott, 2014). Many hospitals experience nursing shortfalls due to this shortage. However, some shortfalls result from the hospital 's inability to financially maintain adequate staffing. Hospital management is forced to make difficult operating decisions as they continue to recover from the financial crisis of 2008 (American Hospital Association, 2008).
This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).