Nursing Unit Budget Reports

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Content in Chapter 5 of Penner, Susan J. (2013). Economics and Financial Management for Nurses and Nurse Leaders, 2nd ed. New York: Springer Publishing Company. …

Content in Chapter 5 of Penner, Susan J. (2013). Economics and Financial Management for Nurses and Nurse Leaders, 2nd ed. New York: Springer Publishing Company. http://www.springerpub.com/product/9780826110497#.UOtV2axCrTo

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  • Penner, Susan J. (2013). Economics and Financial Management for Nurses and Nurse Leaders, 2nd ed. New York: Springer Publishing Company. http://www.springerpub.com/product/9780826110497#.UOtV2axCrTo
  • This is a simplified nursing unit budget report. The dollar values are in thousands, so the productive personnel expense budgeted for June 2013 is $200,000 Look this over for a minute. What does this report tell you?

Transcript

  • 1. Penner, 2013, Chapter 5: Reporting Budgets, Part 1 of 2 • Budget reports and reporting • Operating expense budget: – Personnel expenses – Non-personnel expenses
  • 2. Why focus on the operating expense budget for an acute care nursing unit? • Operating expenses are assumed to be under the control and supervision of the nurse manager. • Your understanding of acute care nursing unit budgets will transfer to the review of other health care budgets.
  • 3. Components of Budgets • Budget time period: – Budgets often reported monthly – Fiscal year (FY) or budget year, quarterly budget reports – Weekly or daily if more detail on performance is needed – More than one FY in the past or future for budget planning – Budgets reporting several time periods show trends in performance • Line items: budget table rows – See “Reasons for Rows” presentation • Columns – See “Consider the Columns” presentation
  • 4. Budgets and Budget Reports • There is an overall operating budget that includes volume (statistics), expense and revenue budget • These sections may be reported separately – Utilization reports (volume, statistics) • Why is a line for volume usually included in expense and revenue reports? – Expense reports • Why are personnel (staffing) reports used? – Revenue reports • Why are revenue reports often missing from nursing unit budgets?
  • 5. Fixed vs. Flexible Budgets Fixed: • Budgeted amounts are set regardless of changes in volume over FY • Examples--rent, equipment, full-time or permanent staff Flexible: • Adjustments made over the year based on volume variance • More complicated to prepare but more useful and accurate • Examples: on-call or other variable staff, medical supplies
  • 6. Table 1. Nursing Unit Expense Budget Variance 20 staffed beds, June 2013 ($ thousands). Budget June 2013 Item 360 Patient Days Actual June 2013 347 Variance -13 $ 200 $ 220 -$20 $ 50 $ 53 -$3 $ 250 $ 273 -$23 Supplies $ 25 $ 26 Overhead $ 10 Total Non-personnel $ Total Expenses Productive Non-productive Total Personnel Current YTD 2013 Prior YTD 2012 3,240 3,164 $ 1,248 $ 1,257 $ $ 312 309 $ 1,560 $ 1,566 -$1 $ 153 $ 144 $ 10 $0 $ 60 $ 60 35 $ 36 -$1 $ 213 $ 204 $ 285 $ 309 -$24 $ 1,773 $ 1,770
  • 7. Personnel Expense Budget Report • High costs so require close monitoring • Nurse manager often able to control these costs • Personnel expenses: – Straight time and overtime hours – Differentials and premiums for shifts, weekends and holidays – Benefits, paid leave – Travelling and per diem nurse hours
  • 8. Thinking About Personnel Expenses • Staffing standards: – Nurse-patient ratio – Staff mix (RNs, LVNs, CNAs) • Full-time equivalents (FTEs) – Direct care measured in hours not positions • Absenteeism – Costly – Reduces productivity
  • 9. Operating Expense Budget: Non-personnel • Fixed non-personnel expenses: – Office supplies – Training, staff education supplies – Depreciation – Overhead or administrative expenses • Flexible non-personnel expenses: – Medical supplies
  • 10. Key Points • Nursing unit budgets can include the statistics, expense and revenue budgets as the operating budget. • Nursing unit budgets often only report statistics (volume) and expenses. • Staffing costs are often the most closely monitored as they are typically the highest costs and require supervision and control. • Expenses might be fixed or flexible, depending on their link to direct patient care (volume).