Challenges the nurse manager or CNO faces with establishing operational budgets

Introduction

The daily challenge for the nurse manager or CNO is to determine how much money their department needs to function properly. In many cases, the budgeting process can be quite complex and difficult. Here are some of the challenges they may face:

Every department provides a different type of service to the patient.

It is important to understand which departments provide the most expensive care and why. This can be done by calculating the cost of each department, measuring how much it costs the hospital to deliver services, and then identifying which departments are more expensive than others.

To do this, you need to determine what your organization’s service costs are. For example: if a patient comes in with a broken leg, how much does it cost for an X-ray or surgery? You also need to know how much time doctors spend with patients during their visits so that you have an idea of how much money they save by performing surgeries instead of treating other conditions first at another location (elderly people often require follow up visits after surgery).

Once these variables have been identified, you can use them as inputs into models that show which departments produce more revenue per dollar spent on patients’ care needs such as: “the average CT scan costs $100 but only produces $80 worth of revenue because there are no uninsured people who need this procedure.”

Most every department has a different type of cost structure and variables.

The most obvious difference between departments is the cost structure, which can be based on a number of factors. For example, a department that provides long-term care for patients with Alzheimer’s disease may have different costs than one that cares for acutely ill patients in the emergency room.

Another factor to consider when comparing departments is their acuity level or complexity of services offered: high-complexity vs low-complexity departments tend to have higher budgets because they require more staff and equipment, including more expensive equipment such as MRIs or CT scans (which are used primarily by specialists).

Every department has its own set of special needs, with specific equipment and supplies required for success.

Every department has its own set of special needs, with specific equipment and supplies required for success. For example:

• The OB/GYN department requires more than just sterile gloves; they also need a certain number of IV bags per shift.

• The emergency room requires more than just trauma kits; they need certain medications on hand at all times in case a patient comes in with an allergic reaction to one of their drugs or medications.

• The pediatric unit requires special equipment that can help children breathe easier when they’re suffering from asthma attacks or other respiratory disorders like cystic fibrosis or pneumonia.

Particular units have very significant differences in the cost of patient care based on the acuity level of the patients being cared for.

Acuity level is one of the major factors that determine the cost of care. Acuity levels are determined by patient age, diagnosis and treatment plan. The higher the acuity level, the more intensive and expensive the treatment plan must be. A nurse manager or CNO must be able to analyze their hospital’s operational budgets in order to determine how much money they can afford for each patient at their facility.

Particular units have very significant differences in the cost of patient care based on the acuity level of their patients being cared for. For example:

• High-acuity patients require more resources than low-acuity patients because they require high-intensity care such as respiratory therapy or intravenous medications administered intravenously (IV) rather than orally or nasally through a tube placed into an arm vein.*

The unit manager or director plays a crucial role in determining cost-effective methods to be used in their unit.

The unit manager or director plays a crucial role in determining cost-effective methods to be used in their unit. They use data from the previous month and current needs, as well as their experience with similar units, to determine what is cost-effective.

Some examples include:

• Using a fixed price for services instead of charging by the hour;

• Using staff from outside agencies like insurance companies and government agencies if they have expertise that could benefit your organization;

• Paying vendors based on performance rather than time worked (for example, paying bonuses when patients are discharged successfully);

The nurse manager or CNO faces many challenges when establishing operational budgets for their departments

The nurse manager or CNO faces many challenges when establishing operational budgets for their departments. One of the most common challenges is that nurses do not see the need for an operational budget, which can be a source of conflict between them and management. In addition, there may be differences in what is considered “operational” and what is considered “non-operational.”

Conclusion

The nurse manager or CNO faces many challenges when establishing operational budgets for their departments. It is important to understand the role that each department plays in the overall patient care process, as well as how it relates to other departments. Each unit has its own special needs that often affect what type of equipment and supplies they require, which affects cost-effectiveness as well.