Financial Health Education for Medical-Surgical Unit Staff Research Paper

Introduction

This paper focuses on providing an education plan for the employees of a 20-bed medical-surgical unit. Nurse leaders are responsible for educating and empowering healthcare staff members about the financial implications of healthcare delivery. This paper focuses on helping the staff understand the linkage between clinical care, financial operations, and strategic planning. The provided education plan is expected to help the hospital improve its financial performance and planning using through engaging the staff in the budgeting process.

Budget Overview

The first step in creating the financial health education plan was to current a budget for the unit. The budgeted operating revenues for the current month were $14,890,000, which added to $119,832,000 of the budgeted amount of the year-to-date budget. The largest part of the revenues (71.5%) were budgeted for inpatient revenues, which was expected to be $10,651,000. The other operating revenues were distributed among ambulatory surgery (15.3%), private ambulatory (9.5%), and other patient revenue (3.7%). The total budgeted revenues were $18,352,000, among which $3,219,000 was classified as other revenue, $132,000 was classified as investment revenue, $43,000 was expected to be gained from the release of net assets, and $68,000 from contribution. In total 81.1% were attributed to operating revenue and 18.9% were attributed to non-operating revenue.

The total budgeted expenses were $16,452,000 with the most part spent on wages ($7,662,000) benefits ($1,903,000), and supplies ($3,360,000). The total budgeted surplus from operations was $1,900,000 with $1,859,000 of budgeted excess of revenues over expenses. In total, amount budgeted amount of year-to-date surplice of revenues over expenses was $77,000. In summary, the current month was expected to be the first since the start of the year to have an excess of revenues over expenses rather than a deficit in terms of the year-to-date budget.

Key Findings of Operations Statement

The operations statement provided with several crucial takeaways concerning the current financial position of the unit. First, it is crucial to acknowledge that the actual excess of revenues over expenses in terms of the year-to-date budget was higher than the budgeted amount of $1,029,000 as opposed to $77,000. However, in the current month, the difference between the actual surplus from operations was $482,000 with an actual surplus of $1,418,000 over the budgeted of surplus of $1,900,000. The central reason for that is the increased variance in terms of revenues in the current month. In particular, the unit collected $17,658,000 in revenues in comparison with the budgeted $18,352,000. Additionally, the variation was due to increased spending in terms of supplies with $3,809,000 of actual expenses in comparison with $3,360,000 of budgeted expenses in terms of supplies. Thus, to decrease the budget variance, the following improvements are needed:

• Increase the amount of inpatient revenues;
• Increase other operating revenues;
• Decrease supplies expenses.

Plan Corrections for Last Month’s Variances

In the previous section, we demonstrated that three objectives should be achieved to correct last month’s budget variances. This section provides an outline of a plan for achieving these objectives. The increase in the amount of in-patient revenues will be achieved by decreasing the number of missed procedures and improving the overall efficiency of resource use. According to Tonna et al. (2020), one of the central reasons for the financial underperformance of hospitals is inadequate capacity distribution. According to Brandon et al. (2022), inadequate scheduling practices may lead to decreased access to care, hospital revenues, and clinical efficiency. Therefore, it is critical to improve the efficiency of the scheduling process to increase hospital revenues. Such a change will also increase access to care and patient flow and improve patient satisfaction with the services of the unit.

The second stage is to improve the amount of revenues classified as “other.” These revenues may include nonpatient care services such as providing personal laundry service for patients, providing meals to persons other than patients, gift shop sales, or vending machine commissions. To increase non-patient care revenues, training will be provided to the care providers to offer other services. Patients may be unaware of the services provided by the hospital, which may cause the underutilization of the services. Moreover, the services may not be meeting the needs of the patients (Gonzalez, 2019). Therefore, the personnel will be trained to collect information about customer preferences and needs to ensure to increase the revenues and patient satisfaction.

The third step in correcting for the last month’s budget variances is reducing the cost of supplies. According to Ahmadi et al. (2019), the cost of supplies may be reduced by improving inventory management. Efficient inventory management is impossible without transparency and accurate in-time collection of information about the needed surgical supplies (Ahmadi et al., 2019). Therefore, it is crucial to train the staff to use the inventory control system properly and record all the needed supplies timely.

Operationalization

Inpatient Revenues Increase

Inpatient revenues will be increased through improving the scheduling system. In particular, the nurses will be trained to forecast the demand for surgeries and schedule them by the forecast. According to Brandon et al. (2022), a linear forecasting model based on a logic matrix decision tree will be used to create optimal schedules. In other words, computer-assisted schedules will be implemented to control and decrease the number of missed procedures and improve the efficiency of resource use. The following steps will be taken to conduct training:

1. Collecting information on best practices concerning scheduling (1 week);
2. Compiling a course for the staff to improve the scheduling practices (1 week);
3. Conducting training for the relevant personnel (2 weeks).

Other Operating Revenue Increase

Other revenues will be increased through three steps. These steps are designed to collect relevant information from patients, create a list of services that meet the needs of the customers, and train personnel to offer the new specter of services to increase sales. The timeframe for the changes is described below:

1. Create a survey that can be used to collect data about the needs of patients concerning non-care services (1 week);
2. Survey patients to collect information about their needs (2 weeks);
3. Creating and implementing a new list of services to meet the needs of patients;
4. Conduct training for the personnel to promote the offering of non-care services (1 week).

Decreasing Supplies Expenses

The budget variance concerning the supply cost was associated with a decrease in forecasting accuracy. It was decided to improve the accuracy of forecasting by improving the data collection technique and employing a complicated quantitative forecasting technique. The following steps will be taken to achieve the goal.

1. Create a training course to improve the ability of the staff to handle the inventory management system (1 week);
2. Deliver training to relevant personnel (2 weeks);
3. Creating several options of quantitative forecasting algorithms (1 week);
4. Testing the algorithms for predictive ability using historical data (1 week).

Staff Engagement in the Budgeting Process

The accuracy of budgeting can also be increased through participative budgeting. Participative budgeting is a form of budget decision-making process where higher management shares the responsibility with lower management concerning the organization’s budget (Wagner et al., 2021). The central benefits of such an approach to budgeting are that it improves the information flow from lower managers to upper management, increases the motivation of employees, and improves goal congruence (Wagner et al., 2021). However, there are several disadvantages to the approach, including increased time consumption and budgetary slack (Wagner et al., 2021). According to Jung et al. (2018), participative budgeting in hospitals is an efficient way to decrease budget discrepancy.

The organization will translate to using participative budgeting using the following steps:

1. Increasing awareness of the relevant personnel about the importance and benefits of participative budgeting (1 week);
2. Providing training to the relevant personnel concerning the basics of budgeting skills (2 weeks);
3. Implementing the system and schedule for turning in the budgets of various departments to the budgeting committee (2 weeks);
4. Creating a normative document that describes the new budgeting process in the organization (2 weeks).

Conclusion

This report demonstrated how a statement of operations can be used to plan improvements to operations and the budgeting process. The budget variance report demonstrated three significant flaws in the unit’s operations. They included discrepancies in the inpatient revenue, increased variance in the other patient revenue, and disproportionate cost of supplies. The report offered steps to improving the situation through employee training and implementation of participative budgeting.

References

Ahmadi, E., Masel, D. T., Metcalf, A. Y., & Schuller, K. (2019). Inventory management of surgical supplies and sterile instruments in hospitals: a literature review. Health Systems, 8(2), 134-151.

Brandon, C., Ghenbot, Y., Buch, V., Contreras-Hernandez, E., Tooker, J., Dimentberg, R., & Lucas, T. H. (2022). Policies Restricting Overlapping Surgeries Negatively Impact Access to Care, Clinical Efficiency, and Hospital Revenue: A Forecasting Model for Surgical Scheduling. Annals of Surgery, 275(6), 1085-1093.

Gonzalez, M. E. (2019). Improving customer satisfaction of a healthcare facility: reading the customers’ needs. Benchmarking: An International Journal, 26(3), 854-870.

Jung, T. Y., Lee, S. J., & Han, J. H. (2018). The Effect of University Hospital Budgeting System Characteristics on Budgetary Slack. Journal of the Korea Academia-Industrial Cooperation Society, 19(2), 405-412.

Tonna, J. E., Hanson, H. A., Cohan, J. N., McCrum, M. L., Horns, J. J., Brooke, B. S., & Hotaling, J. (2020). Balancing revenue generation with capacity generation: case distribution, financial impact, and hospital capacity changes from canceling or resuming elective surgeries in the US during COVID-19. BMC Health Services Research, 20(1), 1-7.

Wagner, J., Petera, P., Popesko, B., Novák, P., & Šafr, K. (2021). The usefulness of the budget: the mediating effect of participative budgeting and budget-based evaluation and rewarding. Baltic Journal of Management, 16(4), 602-620.