Budget Negotiations and communication

2

Managing a hospital operating budget

Todd BrandtDee

6216

Capella University

8/06/2020

Management of a hospital operating budget

An operating budget entails all the revenues and expenses an organization or company uses to plan its operation, the budget is always prepared in advance before the start of a reporting period as a goal that has to be achieved.Acentralised hospital budget at some point may become offset when decisions are made to move its spending’s from a department annual operating budget into a centralized operating system.

A hospital budget has to be managed with more creativity by the hospital management board and people at the clinical level, this will help to create understanding in terms of the hospital operating conditions in relation to the emerging context ( Eldenburg, Krishnan & Krishna,2017).The budget control committee should match the circumstances in the hospital environment and later openly discuss with all people in relation to the vision and goals as per the hospital terms and conditions.

Well budgeted hospital bills would facilitate provision of quality services to the patients and its stakeholders in creating effective financial status for its customers. Income generated should be forecasted so as to meet reasonable expenditure plans, at sometimes many people in the facility get influenced by the previous highest scored targets during the budgeting process, this habit is quite very difficult for it to bring changes in the budget. The budgets main focus should be towards improving minor changes since most of the budget is predetermined from the previous decisions.

DEPARTMENT	PHARMACY	MED SURGICAL	PEDIATRICS	ORTHOPAEDICS
Medical Supplies	7,435,674	23,675	345,956	345,045
Office stationery	2,543,000	45,890	567,934	98,064
Stock	345,000	32,087	463,097	236,056
Patient care	678,675	78,426	234,976	76,056

As stated above, appropriate budgeting has been of great importance at St Anthony Medical Centre. The facility through its managerial team has appropriately planned and controlled its finances over its spending so as to meet its operating objectives in the medical surgical department and be able to fund its current commitments that at times may not be achieved when they not been budgeted for. Budget allocation depends on the interpersonal relationships and mutual benefits in between the senior managers and middle -level managers.

St Michael Medical Centre management evaluated cost -effective analysis and practice program budgeting on the technical skills and required data, information was gathered using formal channels in the medical surgical department and later decisions were made to justify the committees statements one of the major findings realized was insufficient budget alignment process that appears to be a downstream manifestation, due to failure to coordinate and budget harmonization .

(Eldenburg, L. G., Krishnan, H. A., & Krishnan, R,2017).

Budget forecast in the department explains the need to trim the years operation budget up to 6 percent so as to effectively address the budget deviation through the budgeting plan. Developing a sound hospital fund has been of great importance in the hospital administration (Moons, Waeyenbergh, & Pintelon,2019). Budgetary allocations and grants have been provided by the national government to the hospitals through the ministry of health so as to ensure that those health facilities with little resources are met through efficient planning and utilization of the resources. The nurse should join the team to put forward the needs of his department for a better share during the allocation.

Budgeting in hospital ensures that money is allocated effectively in departments where there is need, this is achieved through teamwork who are involved, to review and adequately compare the budget with actuals so as to get highlights on the strengths and weaknesses of the budget. Nurses should be involved in strategy development, so as to achieve the desire of their patients in the medical surgical wards, thus the budget must be able to capture his or her complexity through communication, to the team members in a way that they can understand and provide the best allocation to the healthcare worker, this will help him to adequately meet the needs of their patients.

The hospital management board should plan and organize a brainstorming meeting with the health workers in the medical surgical department, each member in the selected team should freely speak out ideas on appropriate measures to manage labour force in hospital by either determining the wide variation in physician practice and style in the facility or the responsiveness of the supply of labor, to changes in the wages. Research states that increasing physician salaries leads to a slight increase in provision of care by 3 per cent, thus showing that physicians change what they do rapidly in response to increase of salary. Cases where physicians have Medicare and non-Medicare patients, they tend to shift their concentration to Medicare patients in relevance to the fall of their financial benefits

(Eldenburg, L. G., Krishnan, H. A., & Krishnan, R,2017).

Developing a strategic plan helps into adapting strategies, and survive changes. A hospital management team develops strategic plans from their working experiences so as to conduct a competitive analysis, in trying to asses the threats and opportunities during budget allocation and provide data that will help effectively evaluate strategic plans .To conduct strategic issues can help the hospital easily stabilize or retrench in order to work best in future, establishing short -term goals by the management would establish a platform where small ideas are converted into bigger ideas when strategy has to be turned into opportunities . (Sluss,2017).

The team has to identify specific department who are experiencing insufficient labor. H

Harassments in the working environment, to the health workers, by the management or focusing on a subset of activities taken by physicians, can be attributed to low levels of job performance, thus reducing expected outcomes.

Review on the institutions objectives and mission, of providing adequate care for patients, in relation to the labor force present in the facility, would help to ensure that all strategies set are aligned with the objectives as stated by the management and board during the budgetary allocation. This would help to continuously track the internal and external labor force applied in the facility, so as to come up with effective measures to curb the situation and establish refocus into a new direction . (Lunkes, Naranjo-Gil, & Lopez-Valeiras,2018).

Provision of healthcare, being labour intensive, as stated by the Percentage Utilization of Labour that had claimed to do close monitoring, especially in the healthcare system, the effects of labour intensity, especially to healthcare workers, would enable PUL to determine the relationships between the industrial injury rates and its adequacy towards safety.

Effective budget management includes incremental budgeting that involves budgeting on slight changes from the proceeding periods budgeted results. The method is relatively easy in implementation because the managers are ready to manipulate the budget by trying to underestimate the growth of their revenue. The management does not attend to spend time into formulating budgets because the competition is relatively low to be managed, the hospital should rather use the small budgeted amount to come up with a plan on how to distribute.

To be able to come up with a new budget its always important to justify appropriate market expenditures that will ensure every nickel spent adds value to the hospital’s strategic objectives. To improve the accuracy the zero-based budgeting plan centers on the hospital current needs in relation to the future objectives rather than past results, otherwise its quite easier to identify and eliminate poor values, enabling businesses to free up more resources that could instead be mobilized to other critical functions,this helps to reflect the growth of the business and changes in the market.

Continuous budgeting, addition of a new budget on top of the previous one after expiry its always very important, the plan helps the hospital management board to stay ahead and be able to forecast available opportunities and identify risks effectively before the start of the new budget. Rolling forecast is key in planning and budgeting process with strategic goals. Challenges occur when it is carried out on monthly basis instead of being done once a year.

To enforce manpower and accountability into the health workers, the management sets aside appropriate performance measures with the influence of actual budget results into ensuring long-term value creation. The actual baseline is carried out by checking out the last year’s performance, in need to, generate more and create opportunities to better manage received accounts. Continuous improvement program at most times can be much more effective in comparison with the one based on the annual budget because the system is characterized by a cumulative performance, unfortunately when the performance drops below the target it is easily recovered through the next year . (Lunkes, Naranjo-Gil, & Lopez-Valeiras,2018).

Activity based budgets help in calculating the accumulative cost that is needed to hit the target of the anticipated level of activities. This method would identify and be able to scrutinize activities that drive the budgeted costs, analyzed data will then provide appropriate grounds for allocating resources so as to achieve the level of activities that were anticipated forehead. Different departments will be linked to their spending by doing this the clear hospital picture. This would be portrayed to easily identify closed performance gaps, as well as, seize the opportunities that will rise . (Lunkes, Naranjo-Gil, & Lopez-Valeiras,2018).

It takes into consideration all steps involved in an activity, relevant activities are eliminated. Thus, activities carried out to bring efficiency in the activities of an organization budgeting activity system tries to eliminate all sorts of unnecessary activities that are present in the saved budget account.

Performance-based budgeting involves associating hospital funds with specific objects, goals are first set with specific objectives so as to come up with appropriate rationale for activities that the institution expects to undertake in relation to associated costs. (Lunkes, Naranjo-Gil, & Lopez-Valeiras,2018). This budgeting plan helps the hospital management team to priorities key activities through identification of critical operation functions like in the medical surgical department and set them in order of their priority. (Sluss,2017). It cuts unnecessary expenses and be able to provide a framework to achieving operation goals.

The facility budget estimation in each department should be well catered for, the board should be able to allocate funds as per the departments proposals, by doing so it will be easy to establish regular operational updates as per the goals of each department and steps needed to achieve them. Financial analyzation measures should be put in place so as to estimate funding in relation to capital expenditure needs.

Communicating with diverse audience has been of a great deal in eliminating figurative language in daily experiences by keeping presentations in a brief and straightforward manner, the more people are engaged to talking, the more they regress to their own habits and dialect. It’s always important for committee members to ask relevant questions as well as rephrasing comments so as to get a positive feedback from the audience (Sluss,2017).

The board should research on linguistic preferences, on used nonverbal signs, meaning benefits and knowing different cultures with their verbal tendencies. In a diverse workplace its always important to have appropriate communication skills between the managers and co-workers that will create an equal opportunity workplace. Diversity will help to bring fresh working ideas, with a multicultural view of the working environment, through this each person will be freely allowed to express himself, by doing so people will have a positive self-expression and thus will improve the working conditions.

Uniform training of all the health workers, in different departments, to keep everyone on the same line of operation, is essential to promote a well-balanced communication system and understanding .Training people under the same set of operation principles and implementing clear rules will help to hold each person accountable regardless of age, race, or sex, when everyone is raised to the same standards, questions raised against any discrimination are always removed from the equation. This will create a baseline that each person will be accounted for incase of problems, as it will be simple for one to implement clear procedures.

Employees will always feel so empowered when given an opportunity to upward their communication themselves directly into the management. (Zepeda, Nyaga, & Young, 2016). Through this the information will directly flow upwards in the organization and usually brings positive feedback. This goal is always reached for, as managers and bosses, are able to listen to employees and respond to them adequately. Research has been done to demonstrate that effective and work group organization has greatly led to an improvement in the overall company development (Zepeda, Nyaga, & Young, 2016).

Hospitals should strategically establish mentor programs as a form of introducing new employees to a potential and diverse workplace, the team should appropriately check on successful and respected health personnel under their environment to do mentorship, employees will be able to be taught on the work processes and local customs. New employees will easily transit into the next poin,t after they have moved through each particular step effectively. A mentor will help the new employee to effectively understand the processes and adapt them (Zepeda, Nyaga, & Young, 2016).

Having a positive attitude towards coworkers in a diverse workplace is always a great starting point for everyone at any workplace. Both employers and employees should develop a simple and genuine communication system, with an open mind and willingness, to have an ear towards one another. Well established lines of communication should be affordable to anyone no matter their level. Poor communication skills in the workplace can inevitably lead to unmotivated staff, which in turn, employees may begin to question their own confidences, in relation, to their personal abilities.

Reference

Eldenburg, L. G., Krishnan, H. A., & Krishnan, R. (2017). Management accounting and control in the hospital industry: A review. Journal of Governmental & Nonprofit Accounting, 6(1), 52-91.

Moons, K., Waeyenbergh, G., & Pintelon, L. (2019). Measuring the logistics performance of internal hospital supply chains–a literature study. Omega, 82, 205-217.

Lunkes, R. J., Naranjo-Gil, D., & Lopez-Valeiras, E. (2018). Management control systems and clinical experience of managers in public hospitals. International journal of environmental research and public health, 15(4), 776.

Sluss, P. M. (2017). Calculating costs and savings in utilization management. In Utilization Management in the Clinical Laboratory and Other Ancillary Services (pp. 61-73). Springer, Cham.

Zepeda, E. D., Nyaga, G. N., & Young, G. J. (2016). Supply chain risk management and hospital inventory: Effects of system affiliation. Journal of Operations Management, 44, 30-47.