NUR 621 Operational Budget Presentation

NUR 621 Operational Budget Presentation

NUR 621 Operational Budget Presentation

Operational Budgets: objectives

Because all nurses are responsible for the budget, it is their responsibility to ensure that resources are used wisely. The nurse manager selects which services are supplied and which will be given if a new service is created when creating the operating budget. The nurse manager must also decide what the client’s outcomes are and whether or not the services or resources being used should be changed. Previous statistical budget reports, as well as the organization’s goals and objectives, strategic plan, and health care trends in both care and reimbursement, are used to compile this information. The budget plan is then created, together with a prediction of what resources would be necessary to deliver the anticipated services. The main objectives of this presentation are to:
Provide critical budgeting components, such as the cost of staff, activities, services, and supplies.
Identify and describe a necessary capital acquisition for this unit, including the need, return on investment, and benefits, among other things.

Key components of budgeting: Revenue and expenses

Expenses and revenue are the two fundamental components of budgeting. Rather, revenue refers to income gained from the sale of a company’s principal goods or services, whereas expense refers to a cost incurred in the production or delivery of a primary business operation.

Annual Revenue Generated

The following items will be included in the revenue for this unit.All care, treatments, and boarding fees are totaled. The gross charges for a hospital with 20 beds will be around $1,000 per bed. A day =$1000×20=$20,000; a week =$20,000×7=$140,000; and a year =$140,000×52=$7,280,000.

Contractuals: This refers to insurance adjustments or discounts that are made as a result of the insurance charge schedule. The contractuals for the 20-bed unit will be 5%: $100=$50 per bed, $50×20=$1,000 per day, $1,000×7=$7,000 per week, and $7,000×52=$364,000 per year.

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Net Profit: Contractuals – Gross charges$7,280,000-$364,000=$6,916,000 in net revenue

With regards to the key components of budgeting relating to the expenses, the ones related to staffing are as follows.

Full-time equivalents (FTEs)
FTEs: A full-time employee works 40 hours per week, or 2080 hours per year.
Number of FTEs: Total number of hours required for the unit
In the Unit with 20 beds (1:5 ratio)
4 Registered nurses (RNs) on call 24 hours a day, 7 days a week: 96×365 = 35040/2080=16.8 FTEs
2 patient care technicians (PCTs), 24 hours a day, 365 days a year = 17520/2080 = 8.4 FTE

Annual Personnel Salary

Personnel salary is a large part of the operating budget. As a result, the salary for an RN would be 35040 x 27.25 =

NUR 621 Operational Budget Presentation
NUR 621 Operational Budget Presentation

$954, 840.00. For the CMTs, Salary will be 17520×15=$262,800. Acuity-based systems are designed to generate staffing patterns based on patient information. If the data indicates that some patients require greater attention, the staffing pattern will include additional nurses, resulting in additional costs (Pliskin, 2018). Out of a total of 20, there are a total of 20 patient beds available. The number of staffed beds should never be less than the number of available beds.

Non-Personnel Expenses

For the involved activities, monthly cost per bed will be $5000 hence annual cost will be $5000×12=$60,000. Services and supplies, as components of the budgeting, include the following.
Inventory management will provide the appropriate supply, at the appropriate levels, at the appropriate location, at the appropriate time, and the appropriate cost and price (Agner, 2020).
For every bed, the expenses will be $20, for 20 beds $20×20=$400, for a week $400×7=$2,800, monthly $2800×4=$11,200. and for a year $2,800×52=$145,600
Patients in the unit will not be charged the same rate for services and materials.
Different insurance policies cover various things.

For the involved activities, monthly cost per bed will be $5000 hence annual cost will be $5000×12=$60,000. Services and supplies, as components of the budgeting, include the following.
Inventory management will provide the appropriate supply, at the appropriate levels, at the appropriate location, at the appropriate time, and the appropriate cost and price (Agner, 2020).
For every bed, the expenses will be $20, for 20 beds $20×20=$400, for a week $400×7=$2,800, monthly $2800×4=$11,200. and for a year $2,800×52=$145,600
Patients in the unit will not be charged the same rate for services and materials.

RETURN ON INVESTMENT

Return on investment (ROI) is a statistic for determining how profitable an investment is. To evaluate a unit’s efficiency, the ROI compares how much it will have paid for an investment to how much it will have earned (Agner, 2020). Increased patient safety, lower medical costs for patient falls and/or injuries, and profit-focused pricing is all part of the ROI in this situation.

Determining Capitol Purchases

As part of the relevant capital purchase, the unit will need the following.
Currently available technology. The unit will use chatbots, blockchain, artificial intelligence (AI), voice search, and virtual reality (VR), among other potential health technologies (Agner, 2020).
Safe equipment. Personal protective equipment, such as safety glasses and shoes, gloves, earplugs or muffs, respirators, or lab coats, and full-body suits, will be needed by the unit.
Available services, materials, and prescriptions. Consumable supplies will be required for the unit, which will be disposable and not meant for re-use.

BENEFITS

The benefits of relevant capital purchase will be as follows.
Clinical Outcomes Have Improved. Clinical outcomes are observable improvements in health, function, or quality of life as a result of our treatment. Constant evaluation of our clinical outcomes sets benchmarks against which all parts of our practice can be improved (Salem & Elwakil, 2018). The unit will improve clinical outcomes by fostering more well-informed diagnoses and assisting with appropriate treatment planning, among other things.
Staff turnover is lower. When the unit’s turnover is minimal, it saves money by avoiding costly mistakes. Even if the unit pays long-term employees well, lower turnover can benefit the payroll because the unit does not have to train new workers and avoid losing efficiency while they get up to speed.
Patient/employee satisfaction has improved. As the length of the visit increases, so does the level of satisfaction. Even if the unit is unable to spend more time with patients/employees, it can make the time spent with them more enjoyable. For example, management should spend at least some of their time conversing with patients/employees to establish a rapport.

Capitol Purchase

The largest movable equipment budget, which nurses and nurse managers are normally in charge of, is the capital budget. The minimum amount budgeted in an organization’s capital budget is classified, and the cash amount varies each organization. The capital budget can be anywhere from $1,000 and $10,000 or more.The projected life of the equipment and its depreciation value are factors to consider when budgeting for critical moveable equipment. A nurse manager, for example, who wants to budget for a new automated external defibrillator must figure out how long it will last and how much it will cost. A new automated external defibrillator costs $6,000 and has a 10-year life expectancy. It will depreciate at a rate of $1,000 per year and will need to be replaced in ten years.

References

Agner, J. (2020). New Facility Transition and Activation Budget Planning. In Simplifying the Complex. Emerald Publishing Limited.

Pliskin, N. H. (2018). The economics of healthcare shape the practice of neuropsychology in the era of integrated healthcare. Archives of Clinical Neuropsychology33(3), 260-262.

Salem, D., & Elwakil, E. (2018). Develop an assessment model for healthcare facilities: a framework to prioritize the asset criticality for the capital renewals. In ICCREM 2018: Construction Enterprises and Project Management (pp. 82-88). Reston, VA: American Society of Civil Engineers.