Nursing Leadership/Management Role in Budgets Essay

Good Essays
Nurse Leadership/Management Role in Financial Management and Budgeting
Kimberly Lizama
Holy Names University
NURS 151 10 FS
December 6, 2010

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
…show more content…
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
Get Access