Budgeting In Health Care Organizations Essay

The budget process is crucial for any organization in making an annual plan on the ways in which it will spend its funds. The budget is meant to be cost effective to achieve efficiency and effectiveness.
The management of the organization has to be part of the team. This is inclusive of the managers of all departments for instance the nursing manager. Their role is to represent their departments and fully present their budget which will cater for their needs in order for them to achieve their goals. The representation is essential for people to air their views on the financial challenges that they face. The accountant of the organization has to be present to give a view on the financial situation of the organization so that the departments can work within a prescribed financial limit.Budgeting In Health Care Organizations Essay.  They cannot surpass their financial capabilities as an organization.
Nurses are all round people who work in almost all departments since they assist the physicians in offering great services. They have information on most of the departments. Inclusion of the nurses in budget development is crucial since they can contribute to most of the important things required in the organization as a whole. The nurses should ensure that the needs of the departments are met once the budget is implemented (DeNisco, & Barker, 2013).
The responsibilities of the budget making are applicable across the organization and not just to the nursing department. This is because the budget incorporates each and every department and it is important for them to represent themselves. This will ensure that resources are well distributed for everyone to be able to meet the organization’s goals and objectives (Finkler, Jones, & Kovner, 2013).
The budgeting process is all inclusive in that it should take into account all the departments. Budgeting In Health Care Organizations Essay. The nursing department should not be left out since it plays an important role in the health institutions. More importantly, the leadership training forms that have been advocated for in recent years for nurses were geared towards making nurses participate in administration issues and the budgetary process is such an avenue where they can provide their leadership skills, formally and informally (Finkler, Jones, & Kovner, 2013).

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References

DeNisco, S., & Barker, A. M. (2013). Advanced practice nursing: Evolving roles for the transformation of the profession. Burlington, Mass: Jones & Bartlett Learning.
Finkler, S. A., Jones, C. B., & Kovner, C. T. (2013). Financial management for nurse managers and executives. St. Louis, MO: Elsevier/Saunders.

There are numerous other types of budgets such as annual statistics budget and revenue budget and they vary according to their purposes (Gapenski). These budgets can vary across different health care institutions. The reason for this is the diversity of the financial structures, organizational culture and reporting systems of organizations (Finkler and McHugh, 2008, p.171). The process by which health care organizations design and implement budget based on such organizational structure, culture and reporting system determines whether they will achieve budgeted operating margin targets. This is demonstrated in the experience of University of Utah Hospitals and Clinics (UUHC). It was found that the institution’s personnel are not knowledgeable on budgeting and finance and that there is no organizational mechanism or aspect of the organizational culture that encourage the education of the staff. As a result, expenses always exceed the budget and what is worse, the extra expenditures are found to be unnecessary (Clark, 2005, p.79). Budgeting, or correct budgeting, is important because it supports the operation of the health care organization. …
lth care institutions and it needs budgeting in order to maintain positive performance and deal with problems, such as “shrinking revenues and rising expenses” (Schwieters and Harper, p.76). The benefit of budgeting is aligned with the importance of cost information. Budgeting In Health Care Organizations Essay.As managers and hospital personnel are informed about budgeting and cost, a sound operating budgeting process can finally be implemented in order to achieve financial health. This point was explained by the intervention introduced at UUHC in 2004 to improve budgeting results. The organization pursued an aggressive education drive for its staff about budget and finance, “offering incentives to stay within budgets, holding budget variance meetings with managers, and requesting corrective action plans from managers”. The result was improved budgeting performance. The intervention model highlighted by the case of UUHC included an important tool in budgeting: variance analysis.Budgeting In Health Care Organizations Essay. It is a method that focuses on comparisons of actual results and budgeted expectations for each line in the budget of each cost center in the health care organization (Finkler, Ward and Baker, 2007, p.200). The flexible budgeting variance analysis is one of its types that is widely used in health care organizations. The methodology follows a framework of gathering information the comprehensively cover the composition of departmental expenses. This could lead UUHC, for instance, to subdivide total variance (the difference between standard prices and quantities and actual prices and quantities) into three: price, quantity and volume (Baker, 1998, p.128). Baker explained these three in detail: Price variance pertains to the proportion of the overall variance caused by the differences between actual and expected price input; Quantity . Budgeting In Health Care Organizations Essay.