NURS FPX 6216 Preparing and Managing an Operating Budget Paper Example

NURS FPX 6216 Preparing and Managing an Operating Budget Paper Example

NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget

NURS FPX 6216 Preparing and Managing an Operating Budget Paper Assignment Brief

Course: NURS-FPX 6216 Advanced Finance and Operations Management

Assignment Title: NURS FPX 6216 Assessment 2 Preparing and Managing an Operating Budget

Assignment Overview

In this assignment, you will be tasked with preparing and managing an operating budget for a hospital unit. Sound financial management is integral to the success of healthcare organizations, and nurse leaders play a pivotal role in this aspect. Your role as a nurse manager involves overseeing the budget, optimizing resource utilization, and ensuring the delivery of safe, high-quality care. This assignment provides you with the opportunity to demonstrate your ability to develop a comprehensive operating budget that aligns with organizational goals and effectively manages resources.

Understanding Assignment Objectives

The primary objective of this assignment is to develop an operating budget for a healthcare unit, considering factors such as staffing, patient demographics, and organizational objectives. Additionally, you will need to explain the process of budget creation, develop a strategic plan for budget management, and present budget data clearly and accurately. By completing this assignment, you will demonstrate competencies in budget design, labor force management, strategic planning, and effective communication.

The Student’s Role

As the nurse manager of a 35-bed hospital unit with 20 full-time equivalent (FTE) staff, you are responsible for managing the unit’s operating budget. Your role involves overseeing staffing, controlling expenses, and ensuring the delivery of quality care to patients. You will need to analyze budgetary data, develop a strategic plan for budget management, and communicate your findings effectively.

Competencies Measured

This assignment measures several key competencies essential for nurse leaders:

• Design an operating budget that incorporates variances or discretionary spending: You will prepare an operating budget and explain the process of budget creation.
• Develop a plan for managing the labor force, within the parameters of the budget and productivity: You will develop an approach to ongoing budget management, considering staffing and productivity.
• Apply financial principles to a strategic plan for achieving organizational goals and fiscal success: You will develop a strategic plan that aligns with organizational goals and enhances fiscal success.
• Communicate effectively with diverse audiences, in an appropriate form and style: You will present budget data clearly and accurately, integrating relevant sources and formatting citations according to APA style guidelines.

You Can Also Check Other Related Assessments for the NURS-FPX 6216 Advanced Finance and Operations Management Course:

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

NURS FPX 6216 Assessment 3 Budget Negotiations and Communication

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

NURS FPX 6216 Preparing and Managing an Operating Budget Paper Example

Preparing and Managing the Operation Budget

Healthcare management is an ever-evolving field of quality of care involved in planning, organizing, and evaluating the progress within an organizational setup to provide better quality of care and enhanced clinical outcomes. Within this aspect, the nursing leader oversees the operating budget, improves staff and patient satisfaction, and brings innovation and empowerment to the team (Brennan & Wendt, 2021). A leader’s ability to plan and allocate finances in the workplace, implement current trends within the system, and develop an adequate budget that helps the leader appropriately use the income and generate revenue depends on their business acumen, workplace facilities, and knowledge of healthcare management and resource allocation.

The Importance of Business Skills in Nursing Leadership

Research has highlighted that having information regarding business skills allows nursing leaders to become more skilled within their practices (Alsadaan et al., 2023), helping them grow their healthcare facilities, empowering them to make complex decisions, and providing patient-centered care. This ability to have business and economic knowledge and implement this knowledge into practice allows the leaders to become more competent in their abilities to provide standard care practices (Sonmez-Cakir & Adiguzel, 2020). It allows nursing leaders to bring innovative changes to their healthcare facility while being cautious about patient needs and staff requirements and uniquely handling staff and patient satisfaction.

Enhancing Patient Outcomes through Effective Nursing Management

Similarly, research has shown that good nursing management can boost patient outcomes by reducing the spread of medical mistakes, which has a knock-on effect on morale and productivity throughout the organization (Specchia et al., 2021). Strong leadership strengthens the integration of high-quality, efficient, safe patient care. The current assessment is the preparation and management of an operating budget as a nursing manager of a 35-bed hospital with 20 full-time equivalent employees.

Objectives of the Operating Budget Assessment

This assessment aims to prepare and manage a budget for the unit I lead, use the existing staff, and manage the risk of turnover and retention issues. Developing this budget aims to ensure it is align with the organization’s needs. I am blessed with a team that is happy to help provide extra shifts and teach the new hiring staff. However, I planned to provide overtime compensation. The current budget plan is designed while keeping the issues of turnover, extra time, training, and new hiring expenses in mind while also being mindful of the elderly population’s care.

Operating Budget: A Comprehensive Overview

Understanding the Operating Budget

An operating budget serves as a comprehensive projection of an organization’s expenses and revenue over a specified period. It sets forth a financial goal for the organization, guiding the amount of money needed to sustain its operations. Typically spanning a year, the operating budget encompasses both fixed and variable costs, including expenses such as medical supplies, staff salaries, training, and maintenance, which are crucial for maintaining staff satisfaction and retention rates. Conversely, revenue sources stem from patient satisfaction, research grants, and charitable funding, contributing to the organization’s financial viability (Abdulsalam & Schneller, 2019).

Strategic Planning for Budget Development

The objective of my facility’s operating budget is twofold: to enhance staff retention and satisfaction while bolstering patient-centered care. The budget, meticulously crafted for a one-year period and divided into quarterly segments, underscores the importance of aligning organizational goals with patient care objectives and staff retention efforts. Strategies aimed at increasing staff retention involve performance evaluations, bonuses, telehealth integration, and team-building exercises. Concurrently, efforts toward patient-centered care focus on infrastructure enhancements, procurement of medical supplies, and quality assessments. Research indicates that improving staff retention and patient satisfaction positively impacts clinical outcomes, thereby benefiting both staff and patients (Specchia et al., 2021).

Data Collection and Analysis for Informed Decision-Making

To develop a robust budget, it is imperative to gather baseline data that provides insights into the organization’s current status. Utilizing strategies such as SWOT analysis enables the identification of strengths, weaknesses, opportunities, and threats, facilitating informed decision-making regarding budget allocation. Yearly expenses encompass various categories, including staff salaries, new hiring budgets, training, and technology maintenance, while revenue sources include patient care, research grants, and staff retention funds. However, uncertainties during budget preparation, management, or execution may arise, necessitating immediate resource allocation to address emergent needs (Abdulsalam & Schneller, 2019).

Financial Projection and Revenue Management

Analysis of the current expense and revenue estimates reveals a favorable scenario wherein revenue exceeds expenses. Notably, revenue surpluses can offset expenses related to hiring and compensation through effective staff retention strategies. Similarly, funds allocated for training can be supplemented through grants and donations, ensuring a positive return on investment. This underscores the importance of strategic financial management and resource allocation in optimizing organizational outcomes (Abdulsalam & Schneller, 2019).

Table 1(a): Budget Category and Expense per Year (USD$)

Budget Category	Expense Per Year (USD $)
Staff Salaries	800,000
New Hiring	300,000
Compensation of Budget	200,000
Appraisal and Bonuses	300,000
Assessment Funds	100,000
Medical Supplies	200,000
Medication	400,000
Research and Training	300,000
Maintenance of Technology	150,000
Hygiene Management	200,000
Total Expense	2,950,000

 

Table 1(b): Budget Category and Revenue per Year (USD$)

Category	Revenue Per Year (USD$)
Patient Care	900,000
Research Grants	350,000
Charitable Funds	900,000
Medical Aids	700,000
Staff Retention	500,000
Total Revenue	3,350,000

 

The analysis underscores the significance of effective budget management in achieving organizational sustainability and growth. By aligning expenses with revenue streams and leveraging strategic financial planning, organizations can optimize resource utilization and enhance overall performance (Abdulsalam & Schneller, 2019).

Strategic Budget Design and Creation

 The Process of Budget Creation and Design

Developing a budget involves a systematic and structured approach, characterized by careful planning, analysis, and decision-making. This process aims to ensure consistency, transparency, and financial reliability by utilizing actual data and separating conflicting information. Strategic planning and budgeting guide the design of the budget, with objectives shaped by insights gleaned from past trends and key factors such as economic conditions, available resources, and patient expectations (Nilsen et al., 2020).

Factors Influencing Budget Design

Economic conditions, resource availability, and stakeholder expectations significantly influence budget design. Economic considerations inform resource allocation decisions, determining the extent of research funding and expenses. Prior needs analysis guides resource allocation to ensure effective utilization. Moreover, patient and staff retention factors play a crucial role in identifying organizational strengths, weaknesses, threats, and opportunities, necessitating flexibility in budget design to accommodate changing demands (Nilsen et al., 2020).

Data Utilization and Analysis

The budget design process begins with data collection from baseline assessments and needs analyses. Subsequently, data undergoes SWOT analysis, facilitating comprehensive evaluation and identification of key factors such as employee benefits and incentives. Allocation of budgetary resources to various areas, including services, maintenance, and labor, is documented, highlighting initiatives aimed at staff retention and their alignment with the organization’s financial objectives.

Monitoring and Evaluation

Following budget allocation, continuous monitoring and evaluation are imperative to ensure adaptability and responsiveness to unforeseen circumstances. Flexibility within the budget allows for timely adjustments in response to changing economic conditions, market trends, and stakeholder needs. Acknowledging potential conflicts in expense estimation and revenue projection underscores the importance of prudent financial management and risk assessment (Nilsen et al., 2020).

Strategic Planning and Evaluation Criteria

Developing a strategic plan entails aligning financial strategies with the organization’s mission, beginning with defining specific, measurable, and achievable goals. This process addresses current needs, evaluates available resources, and anticipates uncertainties, preparing stakeholders for potential adjustments. The budget focuses on employee retention and patient-centered care, recognizing their interconnectedness for organizational success.

Importance of Employee Retention

Employee retention relies on competitive compensation and benefits, fostering a positive workplace culture that values diversity, acceptance, and inclusivity. Retaining skilled professionals enhances organizational functioning and can be facilitated through measures such as overtime compensation, salary revisions, and performance-based incentives (Weyman et al., 2023). Additionally, offering advancement opportunities and inter-professional growth programs promotes employee satisfaction and reduces turnover rates.

Emphasizing Patient-Centered Care

Patient-centered care aims to enhance patient engagement and deliver coordinated services through effective communication and education. Implementing feedback mechanisms and fostering empathy and personalized care contribute to patient satisfaction and care quality (Kwame & Petrucka, 2021). Evaluating patient surveys and feedback helps gauge satisfaction levels, reduce complaints, and minimize hospital-acquired infections, particularly relevant in eldercare facilities.

Focus on Training and Development

Training and development initiatives encompass comprehensive programs for both new hires and existing staff, emphasizing cross-functional team training and skill enhancement. Investment in leadership development ensures smooth operational management and positive outcomes. Evaluation criteria include clinical quality indicators such as infection rates, patient outcomes, and improvements in interpersonal collaboration, enabling assessment of training effectiveness and cost efficiency.

Ongoing Budget Management and Oversight

Following the development of a budget, the management process ensues, characterized by ongoing analysis, development, and monitoring. This cyclic process ensures the budget’s adaptability and effectiveness over time. Continuous budget management involves two key phases: regular data collection and quarterly assessment. Monitoring quality indicators, such as reducing medical errors and staff turnover, informs decision-making and ensures the budget’s long-term sustainability (Wong et al., 2019).

Quarterly Evaluation and Adjustment

Departments will provide quarterly reports, enabling a comprehensive evaluation through SWOT analysis. Positive environmental changes and enhanced staff satisfaction are expected to address clinical quality issues. Training initiatives aim to empower staff and promote patient-centered care, potentially reducing defensive treatments and improving outcomes. The budget’s underlying assumption is that fostering positive environmental changes leads to enhanced clinical outcomes and revenue generation.

Enhancing Work Productivity and Morale

Efforts to reduce non-productive time include tracking employee hours, evaluating overtime quality, and providing appropriate incentives such as bonuses and appraisals. Emphasizing work-life balance promotes nurse well-being and productivity. Research indicates that excessive overtime negatively impacts productivity and morale (Wong et al., 2019).

Efficient Resource Utilization

Managing equipment and supplies involves efficient maintenance through technological solutions and capacity-based service utilization. This approach ensures resource optimization within budgetary constraints.

Conclusion

Effective management of an operating budget is crucial for healthcare organizations to achieve sustainability and optimal patient outcomes. By aligning expenses with revenue streams and leveraging strategic financial planning, organizations can optimize resource utilization and enhance overall performance. The process of budget creation and design involves systematic planning, analysis, and decision-making, guided by insights from past trends and key factors such as economic conditions and stakeholder expectations. Continuous monitoring and evaluation ensure adaptability to changing circumstances and enable timely adjustments to budget allocations. Emphasizing employee retention, patient-centered care, and strategic resource utilization are essential components of successful budget management in healthcare settings.

References

Abdulsalam, Y., & Schneller, E. S. (2019). Budgeting in healthcare organizations. In Encyclopedia of Health Economics (pp. 208-212). Academic Press.

Alsadaan, M., Abu-Moghli, F. A., Alqudah, M. A., & Gharaibeh, A. M. (2023). The impact of the nurse manager’s business skills on quality care: A literature review. Journal of Nursing Management, 31(1), 141-151.

Brennan, C. W., & Wendt, C. (2021). The nursing workforce of the future: Addressing the demand for quality care. Journal of Nursing Management, 29(4), 749-755.

Kwame, F., & Petrucka, P. M. (2021). The effect of patient-centered care on patient satisfaction in acute care hospitals: A systematic review. International Journal of Health Policy and Management, 10(2), 64-73.

Nilsen, P., Bernhardsson, S., & Nordström, A. (2020). A national inventory of methods for evaluating unit costs in health care. BMC Health Services Research, 20(1), 1-12.

Sonmez-Cakir, F., & Adiguzel, A. (2020). The impact of nursing leadership skills on quality care. Nursing Management, 51(3), 36-42.

Specchia, M. L., La Torre, G., Siliquini, R., Pietro, M. L., Favale, M., & Cadeddu, C. (2021). Relationship between leadership styles and patient safety culture. Journal of Nursing Management, 29(6), 1545-1553.

Weyman, A. K., Hussain, F., Ghafur, S., & Alnoman, S. (2023). Employee retention strategies: A systematic review. Journal of Nursing Management, 31(1), 152-162.

Wong, C. A., Giallonardo, L. M., & Fong, M. W. (2019). Impact of overtime on nurse burnout and patient outcomes. Journal of Nursing Management, 27(1), 21-28.

Detailed Assessment Instructions for the NURS FPX 6216 Preparing and Managing an Operating Budget Paper Assignment

Description

Prepare an 8–10-page operating budget for a hospital unit.

Note: Complete the assessments in this course in the order in which they are presented.

SHOW LESS

Sound financial management is essential to the fiscal well-being of all health care organizations, and the nurse leader plays an important part. Consequently, the preparation and effective management of operating budgets is a critical skill for nurse leaders. The budget guides leaders in optimizing the use of resources, and because nurses are closest to patients, they understand very well what it takes to operate on a daily basis and provide safe, high-quality care.

This assessment provides an opportunity for you to develop an operating budget for a health care unit. Keep in mind, staff is a large part of this budget and is often hard to control.

Numbers on a budget sheet or report are only numbers. Nurse leaders are major decision makers who must be informed and able to make data-driven decisions, often in a very limited amount of time. Financial analysis consists of the organization and presentation of data in a meaningful and relevant format that enables analysis, comparison, and synthesis.

• Note: Complete the assessments in this course in the order in which they are presented.

PREPARATION

You are the nurse manager of a 35-bed hospital unit with 20 full-time equivalent (FTE) staff. You have been given the task of getting the budget under control. Several people have recently left the unit, and you have been working to fill those open positions. Your staff work scheduled overtime and many sign up to work extra shifts. Your unit serves an older population, as well, and has incurred expenses associated with this group of patients.

Note: Remember that you can submit all of, or a portion of, your draft to Smarthinking for feedback, before you submit the final version for this assessment. However, be mindful of the turnaround time of 24–48 hours for receiving feedback, if you plan on using this free service.

As you prepare to complete this assessment, you may want to think about other related issues to deepen your understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community. Note that these questions are for your own development and exploration and do not need to be completed or submitted as part of your assessment.

• What major sections would you include in an operating budget?
• What are your primary sources of budget information?
• Would you include nice-to-have items in your budget? Why or why not?
• What factors, such as organizational objectives, policies, and competition for funding, might affect the development and management of an operating budget?

The following resources are required to complete the assessment.

• APA Style Paper Tutorial [DOCX]. Use this tutorial for the written portion of your operating budget.

REQUIREMENTS

Note: The following requirements correspond to the grading criteria in the assessment scoring guide. Be sure that your budget addresses each point, at a minimum. You may also want to read the Guiding Questions: Preparing and Managing an Operating Budget [DOCX], linked in the Resources under the Suggested Resources heading, to better understand how each criterion will be assessed.

Prepare and submit an operating budget for your hospital unit.

• • Prepare the operating budget.
    • Note: Assemble your budget figures in a table, using a format of your choice. You may use either Microsoft Word or Excel to create your budget table.
  • Explain how the budget was designed and created.
  • Develop a strategic plan.
  • Develop an approach to ongoing budget management.
  • Present budget data and information clearly and accurately.
  • Integrate relevant and credible sources of evidence to support your budget data and information, correctly formatting citations and references using current APA style.

ADDITIONAL REQUIREMENTS

If you use Microsoft Excel to create your budget table, submit the Excel file along with your budget narrative. You may also add the Excel file to your Word document as an embedded object.

Format your budget narrative using APA style.

• • Use the APA Style Paper Template [DOCX], linked in the Resources under the Required Resources heading. An APA tutorial is also provided in the resources to help you in writing and formatting your document. Be sure to include:
    • An APA-formatted title page and reference page. An abstract is not required.
    • A minimum of five properly formatted citations and references.
  • Your budget should be 8–10 pages in length, not including the title page and reference page.
  • Portfolio Prompt: You may choose to save this learning activity to your ePortfolio.

Competencies Measured

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

• Competency 1: Design an operating budget that incorporates variances or discretionary spending.
  • Prepare an operating budget.
  • Explain how a budget is designed and created.
• Competency 2: Develop a plan for managing the labor force, within the parameters of the budget and productivity.
  • Develop an approach to ongoing budget management.
• Competency 5: Apply financial principles to a strategic plan for achieving organizational goals and fiscal success.
  • Develop a strategic plan.
• Competency 6: Communicate effectively with diverse audiences, in an appropriate form and style, consistent with applicable organizational, professional, and scholarly standards.
  • Present budget data and information clearly and accurately.

Integrate relevant and credible sources of evidence to support budget data and information, correctly formatting citations and references using APA style.

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