Financial Management In Healthcare Organisation

Formulate a revenue-and-expense budget for a nursing unit within a healthcare organization. (PO 8).
As we begin this week’s lesson, it is important to discuss how pro formas and spreadsheets can be beneficial to the nurse leader in relation to the financial management of a healthcare organization. Last week’s content provided an overview of forecasting and how this can also be beneficial in the financial management of a healthcare organization.

Debbie and her supervisor have moved to the topic of pro formas. Discuss the purpose of pro forma statements and how they may benefit Debbie.

Benefits of Budgeting

As we begin this week’s lesson, it is important to discuss how pro formas and spreadsheets can be beneficial to the nurse leader in relation to the financial management of a healthcare organization. Last week’s content provided an overview of forecasting and how this can also be beneficial in the financial management of a healthcare organization.
Budgeting Process
The budget is a formalized plan prepared by management that reflects the anticipated expectations for a certain area. Typically, this process can take several months to complete, and a budget calendar is usually provided by the finance department to ensure that needed information is submitted by the leader within the needed timeframe to allow senior leadership to approve and release the final budget within the set timeframe. A timeline builds in time the leader may need to provide additional information to justify a certain budget-item request to senior leadership. A sample budget timeline can be viewed in your textbook reading this week. The rationale for a new budget item or an increase in a budget line item may be clear to us, as the leaders, but may not be clear to senior leadership.
When developing a budget, aspects of the overall budget must be considered and reviewed carefully to ensure quality of patient care is not compromised. Reimbursements for organizations are becoming more closely tied to outcomes to providing high-quality care that is at the forefront of healthcare leaders (Finkler, Jones, & Kovner, 2013). Some leaders and organizations may also adopt a specific performance budget to target a specific goal or multiple goals for an area or organization. For example, an organization may wish to increase its patient-satisfaction scores throughout the organization. Leaders may be directed to allot more specific resources in this area for a specific position, incentives, or other items they feel may enhance this specific outcome measure. An example of this type of a performance budget is highlighted in your textbook reading this week.

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