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FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION TOPIC OUTLINE  BASIC CONCEPTS ON NURSING LEADERSHIP AND MANAGEMENT  OVERVIEW OF FISCAL MANAGEMENT  DEFINITION OF FISCAL PLANNING  FISCAL MANAGEMENT GOALS  PRIORITY OBJECTIVES IN FISCAL MANAGEMENT  ROLES OF FISCAL MANAGEMENT  LEADERSHIP ROLES IN FISCAL PLANNING  DEFINITION OF BUDGET AND OTHER TERMS RELATED TO BUDGETING  TYPES OF BUDGETING  TYPES OF BUDGET  TYPES OF INSTITUTIONAL BUDGET DEPENDING ON MANAGEMENT PHILOSOPHY  CONCEPTS ON BUDGETARY PROCESS  STEPS IN BUDGETARY PROCESS  BENEFITS OF THE BUDGETING PROCESS
 FACTORS AFFECTING BUDGET PLANNING

 FACTORS AFFECTING NURSING BUDGET  CONCEPTS ON COSTS  COMPENSATION METHODS FOR SERVICES  REPORTS AND VARIANCE ON BUDGET ANALYSIS  STAFFING AND SCHEDULING
HENRY PAUL M. SANTOS, RN, MAN, DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008

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 CRITICAL THINKING
OVERVIEW OF FISCAL MANAGEMENT Resources, such as personnel, supplies, and equipment, are critical to accomplishing the goals and objectives in a health care delivery organization. The two major functions that are important are budgeting and resource allocation (particularly staff). Nursing managers are involved in all aspects of resource management. Successful resource management is supportive of a fiscally strong organization and quality care. FISCAL PLANNING Fiscal planning is the formal plan for managing the financial resources. The balance of expenditures and revenues are projected during a specific period of time, usually annually. Allocation of projected expenses is also part of the budget. Goals and objectives are critical to the development of a realistic budget, as well as the monitoring of the budgetary expenses through control procedure. FISCAL MANAGEMENT GOALS The goal of fiscal management is to maintain fiscal records and procedures of the agency that provides protection for the resources of the agency as well as records and procedures which generate economy, effectiveness and efficiency of the operation.

PRIORITY OBJECTIVES IN FISCAL MANAGEMENT
1. Record keeping which protects the agency and its clients from misuses and/or abuse of its resources. 2. Fiscal management that establishes economy in purchase and operations of the agency and its programs. 3. Fiscal management that readily accesses information for purpose of decision making. 4. Fiscal record keeping that provides the agency’s constituents and the general public with accountability for its operations in an easily understandable format.
HENRY PAUL M. SANTOS, RN, MAN, DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008

equipment according to clients confined and treated. OPERATIONS – supplies such as drugs. RN. benefits. house-keeping engineering. The fiscal year serves as a period of reference for the company and does not necessarily correspond to the calendar year. MAN. consultancy (honorarium). Detailed budgeting of all activities to ensure that each program is satisfactorily funded and that costs are substantiated and equitable. insurance premiums. 2. central supply. property inventories. 1973) CREATIVE APPROACHES This includes the responsibility of aggressively seeking out resources for the agency and exploiting them for the benefit of the agency. 1973) FISCAL YEAR Is the accounting period covering twelve (12) consecutive months over which a company determines earnings and profits. if supplied by contractor or not. office supplies . retirement. collections. BUDGET FOR THE FISCAL YEAR WILL INCLUDE: 1. accounting. debt services and other items and value.3 5. investments expenditures conformed to laws and administrative directives. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 .salaries and wages. PERSONNEL . controls. (Hjelte and Shivers. HENRY PAUL M. staff and consumers. A Nursing Budget allocates resources for nursing programs and activities to deliver patient care during a fiscal year. ROLES OF FISCAL MANAGEMENT TRADITIONAL APPROACHES The purpose of fiscal management is to handle and be responsible for all money matters (financial records. SANTOS. (Hjelte and Shivers. allowances.

following the chain of command. Is visionary in identifying or forecasting short and long term unit needs. SANTOS. 3. Knowledgeable about political.4 3. and economic factors that shape fiscal planning in healthcare today. 4. HENRY PAUL M. Anticipates. 2. TRAINING AND RESEARCH – supplies. social. proactive rather reactive fiscal planning. 7. Recognizes when fiscal constraints have resulted in an ability to meet organizational or unit goals and communicates this insight effectively. Ensures that client safety is not jeopardized by cost containment. MAN. and creatively problem –solves budgetary constraints. RN. recognizes. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . equipment. honoraria LEADERSHIP ROLES IN FISCAL PLANNING 1. Demonstrates flexibility in fiscal goal setting in a rapidly changing system. 6. Influences and inspires group members to become active in short and long range fiscal planning. 5.

A Budget is a dynamic management tool. RN. resources (revenues and expenses) and allocations for specific programs/department. SANTOS. which is simply a plan for future activities. A Nursing Budget is a plan for allocation of resources based on preconceived needs for a proposed series of programs to deliver patient care during one fiscal year. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . A Budget Plan for health care institutions. a financial “road map” and a plan which serves as an estimate of future costs and a plan for utilization of manpower. To budget is generally to determine how much cash is available to an individual / organization. • Form a standardized format for ease of comprehension by employees. A Hospital Budget is designed to meet future service expectations. • Document how funds are spent and where revenues are realized. managers and investors. • Provide a means for evaluation of programs and services on goals and objectives of the agency. A Revenue Budget is summarizing the income the management expects to generate during the planning period. to provide quality patient care at minimum cost. HENRY PAUL M. material and other resources to cover capital projects in the operating programs. generally consists of Four Components: 1.5 DEFINITIONS OF A BUDGET Budgets and budgeting can be defined depending on the individual or organization. It should have flexibility to allow for new unforeseen needs or opportunities. A budget will: • Reflect the financial needs. MAN. A Budget is the annual operating plan.

and control spending. RN. Review health facilities vision. disposals and improvements in the institution's physical capacity. SANTOS. objectives and its relation importance of budgeting. The organization must consider the following questions during all phases of budget planning. A Capital Budget outlines the programmed acquisitions. 3. manage ongoing activities. • Do the benefits justify the costs? • Is the budget consistent with the organization’s goals and objectives? • Is the budget reasonable and realistic? • Will the organization revenues be able to support the budget? BUDGET APPROACHES Managing Resources: How to Manage your Existing Budget? 1. mission. Identify / discuss steps in preparation of budget showing: a. An Expense Budget is describing expected activity in operational financial terms for a given period of time.6 2. Budgetary planning is important for: • Analyzing activities for appropriateness • Focusing on the future rather than just the present • Anticipating problem or opportunities in time to deal with them • Reinforcing motivation to work toward organization goals Budget functions are to plan. A Cash Budget consists of money received. 4. Monthly goals b. 2. MAN. cash receipts and disbursement expected during the planning period. Outline specific actions that will be taken HENRY PAUL M. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 to the .

available nursing hours and the cost of nursing for each patient. A non controllable cost would be a general increase in the cost of utilities such as electricity. Target date or time frame d. Monitor Spending Keep a file of all budget statements received. Return of investments e.Review of stock levels of hospital supplies to ensure that they are not wasted and misused. To complete an effective Budget statement. A controllable cost is an increase in price by a supplier. Identify Controllable and Non controllable Costs as well fixed and variable costs. Manage and Control Spending a. 1. E. Develop a model to display why require an X amount of staff. b.7 c. water etc.g. 3. Manage intra – organizational network. it is essential to have a working link with different departments / cost centers / key people within the organization. HENRY PAUL M. expenditures trends can be highlighted and examined. Price Index 3. Determine patient dependency to determine the patient need. e. to defend staffing levels and requirements. MAN. RN. use less expensive supplier could control this. SANTOS. 2. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . 4. planned nursing hours.g. TYPES OF BUDGETING The two most basic types of budgeting are the CENTRALIZED and DECENTRALIZED approaches to budgets.

Operating Budget – this indicates the cost of supplies. 2. minor equipment repair and maintenance as well as other overheard expenses.. HENRY PAUL M. has the middle level manager involved in the planning and budgeting process. Manpower Budget – this consists of the wages and salaries of the regular employees and the fees paid to outside registries through which the institution contracts short-term employees. major equipment. inventories. and major equipment meant for long-term use. Capital Expenditure Budget – this involves the large expense of purchasing of lands.g. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . 3. and furniture) and the purchase of major capital item.8 Centralized Budget – centralized budgeting is developed and imposed by the comptroller. MAN. SANTOS. TYPES OF BUDGET • Capital Expenditure: Long-range budgets (usually three years) that involve physical changes (e. Decentralized Budget – Decentralized budgeting. COMPONENTS OF TOTAL INSTITUTIONAL BUDGET The components of total institutional budget are: 1. space renovation. RN. administrator and/or director of nursing with little to no consultation with lower level managers. buildings.

TYPES OF INSTITUTIONAL BUDGET DEPENDING ON MANAGEMENT PHILOSOPHY HENRY PAUL M. social security. private pay). DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . rent. vacation and holidays. SANTOS. Projected revenues are also identified in the operating budget. Assets will depreciate over time. Operations are based on a complexity of fiscal considerations. • Operating: Short-term budgets (per fiscal year or annually) that allocate funds for day-to-day activities of the organization. The critical aspect of personnel budget planning is the forecasting of staffing needs for the specified time period of care provided (e. and the sale of property or equipment. Cash flow is an important element.. workman’s compensation.9 Priorities need to be established for this item. Education. MAN. Revenues come from payment sources (insurance/MCOs. and personnel expenses. such as interest. 24 hours a day. • Cash: Budget that accounts for the monthly expenditures and receipts to the department and/or organization. Types of expenses are salary. Cost center are used to track these types of expenses. medical and non-medical supplies.g. RN. small equipment. 365 days of hospital. but the forecasting/time period varies for home care and other types of settings). Expenses/costs that are included are utilities. and other benefits. and other income. • Personnel: Budget that allocates expenses related to personnel. government/Medicare/Medicaid. unemployment. contribution.

5. MAN. Top management can select the budget or shift the spending level upwards or downwards. analyzing.g. rather than for individual activities or functions. in every annual budget preparation. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . and quality control. and controlling the operation and plans of the Department.10 There are many different types of institutional budgeting. Performance Budget – A performance budget is based on the functions and activities of personnel involved in the operation budgeted. both old and new. 4. Fixed Ceiling Budget – A fixed ceiling budget is one in which the uppermost spending limit is set by the top executive who then asks managers to develop budget proposals for individual units. 6. in contrast. whichever is best for optimum productivity. Flexible Budget – A flexible budget. 3. 1. SANTOS. BUDGETARY PROCESS The budgetary process involves determining and developing a plan for the area of responsibility and reviewing. supervision of nursing staff. RN. Zero-Based Budget – A zero-based budget justifies in detail the cost of all programs. Sunset Budget – A sunset budget is designed to "self-destruct" within a prescribed period to ensure cessation of the funded program at a predetermined date.). a home care program. This can be done by: HENRY PAUL M. 7. Program Budget – On the other hand. 2. an outreach program. etc. the appropriateness of which to a given milieu may depend on such things as the philosophy of the incumbent management or the exigencies of a given situation. In a nursing care management setting this may refer to direct nursing care activities. among other things. contains several financial plans for each level of activity or for different operating conditions. Open-Ended Budget – An open-ended budget is characterized by a single cost estimate for each program in the proposed unit. in a program budget costs are computed for a program as a whole or the entire program itself (e.

8. as well as. repairs and replacement. but many of the administrative staff members participate and have responsibilities. chief fiscal officer. The budgetary process is an ongoing one. goals and objectives. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . Translate information into pesos and submit official forms to the Chief of Hospital for approval and inclusion in the general hospital budget. 2. materials. Estimate personnel salaries and benefits. Study proposed changes in other departments which might affect the nursing service budget. national. Estimate cost of Human Resource Development and Research Programs. including the chief executive officer.11 1. municipal. MAN. 3. Ultimately. and it must be monitored. 4. It is easy to view the budget as another paper report or plan. HENRY PAUL M. revolving trust). RN. Identify sources of funds (general. 7. city. but it must be a live document. equipment. one that changes as needed. Estimate required expenditures for the coming year for supplies. nurse executive. Review current appropriations and actual expenditures for the current year. as well as the organization’s strategic and operational plans. special. Review of pertinent provisions in the current General Appropriation Act. provincial. the organization’s governing board is responsible. and managers. savings derived from unusual leaves. A cost center is a unit or department within an organization that has specified expenses. It begins with the identification of who is responsible for developing and monitoring the budget. Operational goals and objectives are set that correspond with the organization’s mission. 6. SANTOS. 5.

setting priorities. Implementation and monitoring: Analyzing variances and adjustments during the fiscal period. the pharmacy department. Each one would have a budget that would then be used to develop the overall budget for the organization. Evaluation: Obtaining performance reports and analyzing efficiency STEPS IN BUDGETRAY PROCESS 1. and approving the operational and capital budgets. MAN. and identifying financial objectives. There are four major phases in the process: Planning: Gathering information related to goals and objectives. Assess what needs to be covered in the budget.12 Examples of this would be the cardiac care unit. Development of the budget: Collecting and analyzing data from past budget. allocating amounts based on priority. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . or admissions. negotiating and revising the budget as necessary. Develop a plan. Budgeting today generally reflects all inputs from all levels of the organization. nursing services. SANTOS. allocating departmental and cash budgets. Fiscal Year – a budgeting cycle set for 12 months HENRY PAUL M. RN. conducting an environmental assessment. 2.

Managers develop a more historical approach to budgeting as they grow more adept at predicting the unit’s budgetary requirements. repairs maintenance. Implementation and Monitoring Ongoing monitoring and analysis occur to avoid inadequate or excess funds at the end of the fiscal year.000 Expenditure: HENRY PAUL M. and in service education Table 1.000 3rd Month – P30. MAN. the number and the kind of supplies. and the kind of care the patients are supposed to receive. fringe benefits. the number of patients to be served. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . Income : P900. their salaries. Evaluation Reviewed periodically and modified as needed throughout the fiscal year. Select optimal time frame for budgeting. 4. Example: Allotment for the 1st Quarter P 90.13 Fiscal year may not coincide with the calendar is then broken down into quarters or subdivided into monthly.000 2nd Month – P30. Developing Plan for the Area of Responsibility Each senior nurse / supervising nurse develops a budget plan for the area of responsibility every quarter of the ensuing year with the first quarter broken down into months. the activities within the area.000 1ST Month – P 30. quarterly. or semi-annual periods.000 The budget plan should include the number and the kind of personnel. 3. Operating expenses shall include among other things. SANTOS. books. RN.

the number and type of personnel as well as the volume and the type of equipment and supplies required as well as the corresponding cost.000 P50. SANTOS. Review the Budget Plan Review the plan for maximum efficiency and cost saving or corrective actions.000 P450. RN. affords planning. budgeting one can learn a good deal about planning. MAN. Over expenditure must be controlled. The continuous exchange of information up and down the organizational ladder is encouraged. Planning – Budgeting stimulates thinking in advance. It has a balancing effect on the total and the expected venue. It leads to specific Budgeting planning such as the volume and type of services. from the top to bottom. Coordination – Budgeting also encourages coordination among the From the process of different persons involved in the process.14 Salaries Purchases Rent Total: P350. BENEFITS OF THE BUDGETING PROCESS There are several advantages derived from the budgeting process. 1. and in many instances the team approach is stimulated or developed. HENRY PAUL M. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 .000 P 50. The process likewise stimulates action and interaction with all concerned parties. coordination and comprehensive control of resources.000 Analyzing and Controlling the Prepared Budget A reporting system is devised such that monthly reports show how much has been spent on what and whether it exceeded the budget or not. 2.

Categorizing the patient is made through the type of care given by the physician such as medical. 2. This is because in assessing whether a budget is realistic or not. or primary. These needs are determined by the condition of the patient. 1. SANTOS. and is also able to initiate cost consciousness. FACTORS AFFECTING BUDGET PLANNING Budget planning is determined by the specific type of activity for which it is implemented. an administrator is able to evaluate quality and initiative in performance. activities and needs which from the basis of budget planning. pediatric. He is able to set standards and compare these standards with actual expenditures and revenue. maternity.15 3. RN. the length of stay in the hospital and the acuteness of the illness. The basic factors to be considered in budget planning are the type of patient/s. Through budgeting the manager is able to define fixed and predetermined goals through the budget. standards of nursing care and nursing supervision. team. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . case. The severity of the illness serves as the basis for length of stay in the hospital. The method of patient assignment can be functional. PATIENT The nature of the patient's needs is primary consideration in budget planning. the kind or class of the hospital. Nursing service has very specific parameters. HOSPITAL OR HEALTH CARE FACILITY HENRY PAUL M. the policies on personnel and equipment. surgical. Comprehensive Control – A budget fosters comprehensive control for those responsible for managing it. MAN. and geriatric among others.

Other aspects of a hospital to be considered include its physical layout. specifically its bed occupancy and capacity. the Nurse's Station. based on the volume of patients and the nature of their needs. Bed capacity must be enough to accommodate the possible number of patients. the size of the wards or units. whether these leaves are confined to those required by law or include others. i.e. such as the salaries paid to nursing personnel.g.16 The available facilities and resources with which to address the needs of the patient are also factors in budget planning. STANDARD OF NURSING CARE AND SUPERVISION This consists of the cost of training and maintaining personnel and acquiring equipment that will be needed by the health care facility. It begins with documentation of the nursing care method employed which refers to reports. the treatment rooms. e. and so it is important to be well-acquainted with personnel policies in place. SANTOS. these concerns include the size of the hospital. PERSONNEL These facilities would be useless without the personnel to utilize them. leave benefits enjoyed by the personnel. periodic seminars for staff. RN. and other relevant facilities and resources available such as equipment and supplies. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . and provisions for staff development programs including instructional staff and training structures available. In nursing management. 3. The manager determines whether the method of patient HENRY PAUL M. MAN. 4.

on a team basis or to a primary nursing method. 2. HENRY PAUL M. The budgeting process of the organization. Types of patient admitted. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . There must be a determination of the amount of centralized service provided such as sterile equipment. 5. considering that as a rule. Determine the number of full-time equivalent of nurses necessary to staff the unit. Personnel policies such as hours/day on duty per week. 2. FACTORS THE AFFECT NURSING SERVICE BUDGET 1. inexperienced students need more supervision. vacation. 6. SANTOS. Monitor the variance over the budget period and identify negative variances responding promptly and appropriately. She identifies what labor-saving devices and equipment are necessary. sick leaves. The manager determines the affiliation of nursing students or medial students to the system. on a case basis. MAN. centralized oxygen service and line supply. Encourage the staff to monitor resources used including time and supplies. 4.17 assignment shall be functional. Medicare/Philhealth. 3. Understand the extraneous factors such as changes in technology or direct or indirect cost that may be assigned to their budget. Compute the salary and non-salary budget including salary increases and other various factors. equipment and supplies. RN. TOOLS IN BUDGETING AND MANAGEMENT OF RESOURCES 1.

10. HENRY PAUL M. nursing and midwifery school. Kind and amount of care.Method of appointment of medical staff size and activities.18 3. 7. Examples of fixed costs are installment payments for equipment and overhead expenses. which is typically the number of clients. Proportion of nursing care provided by the professional nurse and nursing aides. job description and job classification. Methods of assignment whether functional. MAN. Size of hospital. record keeping. Amount and quality of supervision available and provided. SANTOS. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . Standards of nursing care. 8. number of patient services given.Affiliation with medical. CLASSIFICATION OF COSTS Fixed: A cost that does not change with volume. care. 12. primary. 6.Responsibility of nursing service for non-nursing functions such as dietary or housekeeping. 5. charting. 9.Physical layout of hospital and labor saving devices. 4. Methods of performing nursing procedures. RN. team. frequency of treatment and orders.Method of reporting required by the administration whether simple or complex. 13. 11. 14.

Direct: Costs that can be identified for a specific service or product. complication. Diagnostic Related Groups (DRGs): Classification system implemented by the federal Medicare system. Examples of variable cost are those items used in the operating room. the client may pay. staff costs. procedures. RN. and. HENRY PAUL M. Office supplies are a good example. SANTOS. Per Diem rates: payment that is fixed and based on each day of service. age. such as $600 per day in the hospital. Indirect: Costs that cannot be linked or associated with any specific service or product. which would change based on the type and number of cases. but is not used as much today. For example. Case rates: Payment that is based on the type of case. such as a flat fee for an appendectomy or vaginal delivery. DRG categories are used to assign predetermined reimbursement based on the client’s medical diagnosis. medication.19 Variable: A cost that changes based on volume. The method was the traditional payment method. MAN. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . it is difficult to say that the use of office supplies is associated with the revenue or income associated with treating 10 cardiac clients. COMPENSATION FOR SERVICES Fee-for-service: The provider charges for services given and is paid by the insurer (or in some cases. and other factors. but that is less common). in some cases.

rather than more care.. A monthly review of the budget is critical in the ability of an organization to stay on the target with the budget. the provider still keeps the payment. Are revenues below what was expected? For example. If the enrollee/member does not require any services. and the revenues. RN. MAN. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . SANTOS. the difference between the projected and the actual expenditures in the budget. Resource-based relative value scale (RBRVS): Method used by Medicare.g. office visits) REPORTS AND VARIANCES ON BUDGET ANALYSIS Various types of reports that are important in the budgetary for health care organization include: Budget variance report: Describes the status of the budget. what has been spent. HENRY PAUL M. It is used to determine payment for primary care provider services both for procedures and cognitive services (e. or in the implementation of the budget. in addition to DRGs. This is usually a monthly payment. Managers need to analyze them and determined the causes for the variances. are there fewer admissions? This can be a major problem for management.20 Capitation: Prepayment per enrollee/member of the plan to a provider who will then provide specific services. The incentive is to provide less care. Adjustments may need to be made in the budget. Is the unit spending too much money or below what is expected? These are the variances. when required. This payment method is very common with managed care organizations. to the enrollee/member.

and days spent in the hospital. and client factors (e. equipment. experience. deliveries. RN. time management. home visits. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . inpatient admission. and management. acuity level). Supply variance report: Lists the utilization of supplies and compares it with the budgeted amount. variable or fixed staffing). Examples of output are the number of emergency room visits. and client education. It is important to maximize productivity of resources to preserve the quality of products and services. stability.g. interpersonal communication.. Other factors include the extent of the treatment setting. MAN. Factors affecting input are the characteristics of the staff (e. Payroll report: Cites employee earning and hours worked per day period and consider in such factors as vacation and sick time.. Factors that affect outputs are acuity.g. meal served to client. age. primary care provider office or clinic visits. unit layout. supplies. Assessment of HENRY PAUL M. medical records. client satisfaction. SANTOS. RESOURCE ALLOCATION Productivity Productivity is the ratio of output (product and services) to input (resources consumed).21 Productivity report: Provide data about the number of staff hours worked per unit of service (such as client days or client visits) in terms of allocation of human resources.

client satisfaction. Scheduling is done in many different ways. A third type of scheduling is self-scheduling. client acuity system. meeting the outcomes with the minimum resources to reach goal. evaluation of nursing care provided. RN. which often requires negotiation HENRY PAUL M. Critical sources of data about effectiveness include quality improvement data. It is a managerial goal. It integrates effectiveness and economy. done by a nursing service or a specific office for the entire health care organization. Effectiveness and efficiency are important elements of productivity. performance appraisal. Scheduling may be centralized. such as the Joint Commission on Accreditation of Health Care Organizations. SANTOS. Staff members appoint the schedule themselves. and the data from external reviews. workload. MAN. STAFFING AND SCHEDULING Staffing and scheduling are important functions that directly impact the quality of patient care. personnel and level of staffing. and the amount of time and staff that are available for the client. which means the divisions or units of the organization do it. and quality improvement monitoring. Effectiveness is taking the necessary steps to achieve objectives. Efficiency is doing the right things correctly. whereby staffing criteria are developed and mutually agreed upon by the staff. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . Staff member are concerned about their schedules.22 productivity requires reviews of budget. or decentralized.

less Absenteeism. Additionally. MAN. greater job Disadvantages Day shift most desired. Self scheduling has been very successful in many setting due to the autonomy and self-determination involved. self-scheduling facilitates work attendance. Scheduling Method Permanent evening Advantages Fewer health problems. RN.23 and cooperation of the person involved. more time to relax Alternating/ physical HENRY PAUL M. and night shift staffed with new graduates 12-hour shifts correlated greater fatigue Increased stress and mostly Satisfaction. SANTOS. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 Improves weekend coverage and This type of scheduling could be . can plan social life Flextime with reduces turnover.

SANTOS. NCH = Nursing hours worked in 24 hours HENRY PAUL M. reduced work quality. schedule is known in advance. staff treated fairly. One of the most commonly adopted standards in many hospitals is a client classification system. This method of quantitatively estimating client care needs and staffing requirements to provide necessary care is based on census and acuity level. sick time reduced. less need to call in unscheduled staff Dependent on a valid client-classification system Standards of Productivity and Staffing Staffing requirements are based on a standard unit of measurement for productivity. the number of nurse care hours can be assigned for each classification.24 Rotating advantageous if entire work group or teams that are compatible are rotated complaint. rotation of personnel is disruptive to work groups Somewhat inflexible rigid scheduled Block/ Cyclic Reduced fatigue. The standard formula for calculating nursing care hours (NCH) per patient day (PPD) is the number of nursing care hours in 24 hours divided by the client census. Once an appropriate system is develop and adopted by the institution. higher turnover. MAN. decreases floating. improves continuity of care Variable reliable Census determines staffing. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . RN.

x 8 clients = 18. Now we can calculate the number of nursing care hours per client: The total number of nursing care hours equals 67.4 hrs. MAN.0 hours (4 clients) Category III = 4. and adding all of the hours from the four categories together ( Step 2 ).3 hours (8 clients) Category II = 3.4 hrs. the total number of nursing care hours is divided by the number of clients (Step 3). HENRY PAUL M. x 4 clients = 16.25 PPD Client Census For example.8 hrs. Do the math: Category I Category II = 2. x 4 clients = 20. Then. = 3. RN.2 hours (4 clients) Category IV = 5. This was determined by multiplying each category ( acuity level ) by the number of clients falling into that category ( Step 1 ). DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . Category IV = 5.1 hours (4 clients). Category III = 4. SANTOS.1 hrs. Step 1 Multiply each category (acuity level) by the number of clients falling into that category.3 hrs.0 hrs. the number of nursing care hours needed for each acuity level and the number of client at each level is as follows: Category I = 2.5 hours. the client census is 20.2 hrs. x 4 clients = 12 hrs.

4 + 12 + 16.3 hours Step 3 Divide the total number of nursing care hours by the number of clients receiving care. HENRY PAUL M. The total hours are 67.38 20(Client census) Nursing units are generally budgeted at so many hours per client per day. 3. RN.8 + 20. 67.38 hours per client for that day. SANTOS. 18. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . Calculating the number of nursing care hours required for any given day can assist the manager in determining if the unit is understaffed or overstaffed.5 (Nursing Care Hours) _____________________ = 3. MAN.5 divided by 20 clients equals.4 = 65.26 Step 2 Then add all of the hours from the four categories together.

As a director of nursing. Discuss the importance of the following management functions in the delivery of a quality health care service: a. MAN. SANTOS. Why is it essential to consider goals and objectives when developing a unit budget? 2. What reports would you review and why? HENRY PAUL M. RN. b. c. Planning Organizing and staffing Directing Controlling 4. you are reviewing your home health agency’s budget reports. What does the nurse manager need to do during each phase of the budgetary process? 3. d.27 FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATOR FINAL EXAMINATION Answer the following comprehensively: 1. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 .

(b) some who work evenings and nights in the same pay period. effectives. As you consider productivity for a hospital unit. what are three examples of outputs that would be important to review? 7. and economy in strengthening the fiscal position in your nursing service department. 9. DMS FISCAL MANAGEMENT IN NURSING SERVICE ADMINISTRATION University Of Makati-College of Nursing 2008 . If you have (a) some staff members who work 8-hour shifts based on 5day workweeks. Explain how each of the various tools of financial management operates to attain efficiency. what types of scheduling do these staff members have? 8. RN. Why is the study of Fiscal Management important? Select any theory and discuss comprehensibly its practical application to your chosen field of specialization? HENRY PAUL M. What is the difference between effectiveness and efficiency? 6. SANTOS. and (c) others who work the 12-hour shifts based on 3-day workweeks. MAN.28 5.

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