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PLANNINGCECILLE O. MARTINEZ
RN,RM,MAN, EdD (c)
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PLANNING
Planning may be defined as a decidingin advance what to do; Who is to doit; and how; when, and where it is tobe done.
Therefore all planning involves achoice : a necessity to choose fromamong alternatives.
This definition implies that planningis proactive and deliberated process
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Planning Planning is concerned with the futureimpact of today's decisions. It is the fundamental function of
management from which the otherfour stem. The organizing, staffing, leading and
controlling functions stem from theplanning function
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PLANNING The manager is ready to organize and staff only
after goals and plans to reach the goals are inplace. Likewise, the leading function, influencing the
behavior of people in the organization, depends onthe goals to be achieved.
Finally, in the controlling function, thedetermination of whether or not goals are beingaccomplished and standards met is based on theplanning function.
The planning function provides the goals andstandards that drive the controlling function.
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Importance of PlanningPlanning leads to achievement ofgoals and objectivesPlanning gives meaning to work
Planning provides for effective useof available resources and facilities(best use of personnel and material
resources prevents wastage)Planning helps in coping with crisis
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Importance of Planning
Planning is cost effective costscan be controlled through planningfor efficient operation
Projecting the number of operations in a givenday, including daily dressings, helps indetermining accurately the needed weeklysupplies in the surgical units so as to preventundersupply, oversupply or pilferages (taken byother person)
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Importance of PlanningPlanning is based on the past and
future activities evaluation of programs,schedule and activities whether successful or notprevent and/or reduces the recurrence ofproblem and provides better ideas in modifying oravoiding them
Planning leads to the realization ofthe need for change establishment ofOPD rather than admission can greatly reduced
days in hospitalPlanning provides the basis forcontrol - basis for evaluating theaccomplishment of a program
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Importance of Planning
Planning is necessary for effectivecontrol nurse manager evaluate the
environment or setting in which they workor where the patients are confined andmake necessary recommendations to makehospital conditions more therapeutic not
only for the patients but for the workersas well.
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4 MAJOR ASPECTS
OF PLANNING1. PLANNING SHOULD CONTRIBUTETO OBJECTIVE
2. PLANNING PRECEDES ALL OTHERPROCESSES OF MANAGEMENT3. PLANNING PERVADES ALL
LEVELS4. PLANNING SHOULD BE
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Four Stages of Planning 1. Establish objectives (goals) 2. Evaluate the present situation and
predict future trends and events 3. Formulate a planning statement
(means)
4. Convert the plan into an actionstatement
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Planning Terminology Vision - Statement that outlines the
organizations future role andfunction Gives the agency something to strive for Nonspecific directional and motivational
guidance for the entire organization.
Top managers normally provide a vision for thebusiness. It is the most emotional of the four levels in
the hierarchy of purposes.
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Planning Terminology Mission statement that outlines
the agencys reason for existing(whether hospital or health care) It is concerned with scope of the business andwhat distinguishes this business from similar
businesses (includes: who the target clients are( the poor, the needy, middle and upper class);and what services will be provided (in-patient,out-patient, ER)
Mission reflects the culture and values of topmanagement.
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Planning Terminology
Philosophy describes the vision It is a statement of belief and values that direc
ones life or ones practice In an organization, it is the sense of purpose of
the organization and the reason behind itsstructure and goals
Its a written statement of philosophy thatexplains the belief that shape how the mission opurpose will be achieved
It gives direction towards the attainment of the13
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Planning Terminology Objectives Objectives refine the mission and address key
issues within the organization They are concrete and specific in nature
They are expected to be observable,challenging, and untimed.
They are stated in terms of results to beachieve and should focus on the production,
health care services to patients. They are action commitments through which
san organizations mission and purpose will beachieved and the philosophy or belief
sustained.
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Planning Terminology
Goals Goals are general statements of
anticipated results
They are expected to be SMART: S pecific, M easurable, A ttainable,R ewarding, and T imed.
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Planning Terminology Forecasting - helps manager look into the
future and decide in advance where the agencywould like to be and what is to be done in order toget there.
With estimates, provide the basis for planning Includes:
Environment in which the plan will beexecuted
Who the client is their customs, belief, language,dialect barriers. Public attitude and behavior, severityof` condition or illnesses, the kind of care they willreceive.
The number and kind of personnel required The necessary resources
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Planning Terminology Development of tactics is a fifth level of
planning. Tactics , the most specific and narrow
plans, describe who, what, when, where andhow activities will take place to accomplish
a goal.
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TYPE OF PLANNING Strategic Planning - refers to theprocess of continual assessment,
planning, and evaluation to guide thefuture. Its purpose is to create an image of
the desired future and design waysto make those plans a reality.
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Strategic Planning
In strategic planning, managementanalyzes inside and outside factors thatmay affect the company and so objectivesand goals.
Here they should have a study ofstrengths and weaknesses, opportunities
and threats. For management to do this efficiently, ithas to be very practical and ample.
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Tactical Planning Tactical planning deals primarily with
the implementation phase of theplanning process
Tactical planning turns strategy intoreality Tactical planning usually has a 1-2 year time horizon
Tactical planning is usually tightlyintegrated with the annual budgetprocess
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Elements of tactical
planning Project plans Project budgets
Project reviews Monthly reports Annual reports
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Operational Planning
Deals with the day-to-day and week-to-week work routine
Focus is on routine operational tasks and
long-term projects Primary goal is to communicate In many organizations, people are asked to
do both
Weekly meetings are often used tocoordinate efforts and review progress Weekly or monthly summaries are often
used to inform others
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StructureThe structure of operational planning is
closely related to organizational structure In a traditional hierarchical organization,
team leaders usually assemble with asenior manager on a regular basis to shareinformation
Additional periodic meetings are oftenrequired to coordinate efforts with otherunits
In a process-oriented organization, teamsare more ad-hoc in nature, so a mechanismmust be put in place to insurecommunication
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KINDS OF PLAN
1. MISSION OR PURPOSE identifiesthe basic function of theorganization
Defining specific task to be perform2. GOALS AND OBJECTIVES are theresults or achievements toward whicheffort is directed.
These two concepts represent not only the endpoint of the planning but also the end towardwhich organizing, staffing, leading andcontrolling are aimed.
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KINDS OF PLAN
Cont.Goals comprises mission and purpose
statements of the organization in awider perspective
Objectives are goals expressed inconcrete terms that are readilymeasurable.
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KINDS OF PLAN
3. Strategies - involves a plan or aseries of maneuvers for obtaining aspecific goal
-can be defined also as thedetermination of the basic long-termobjectives of an organization and theuse of course of action and allocation
of resources necessary to attainthese goals
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KINDS OF PLAN
4. Policies - basically general statements thatguide or channel the thinking of managers indecision-making
5. Procedures are plans spelled-out in adetailed manner in which certain activities mustbe accomplished
6. Rules are usually the simplest type whichspell out specific required action or non-action.
are regulations promulgated by the agencygoverning conduct observed by employees withoutspecifying a time sequence.
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KINDS OF PLAN7. Programs plans or schedules to be
followed comprised goals, policies,procedures, rules, tasks, assignment,
steps to be taken, resources to beused and other medium necessary tocarry out one as a given course of
action supported by budget8. Budget itemizes estimate ofexpected outcome and expenses
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Characteristics of a
Good Plan A well developed plan should:1. Be precise and clearly-worded
objectives, including desired resultsand methods for evaluation2. Be guided by policies and /or
procedures affecting the plannedaction
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Characteristics of a
Good Plan3. Indicate priorities4. Develop actions that are flexible and
realistic in terms of available personnel,equipment, facilities and time
5. Develop (actions that are flexible) alogical sequence of activities
6. include the most practical methods forachieving each objective, and
7. Perv ades the whole organization
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PRINCIPLES OF
PLANNING1. Planning is always based and focused onthe vision, mission, philosophy and clearlydefined objectives of the organization
2. Planning is a continuous process provision for proper analysis wouldindicate revision of flexibility to be done
to make it more effective
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PRINCIPLES OF
PLANNING3. Planning be pervasive within theentire organization covering the
various department, services andthe various levels of managementto provide maximal cooperationand harmony
4. Planning utilizes all availableresources
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PRINCIPLES OF PLANNING
5. Planning must be precise in its scopeand nature it should be realistic andfocused on its expected outcomes.
6. Planning should be time-bounded(e.g. with short and long range plans)7. Projected plans must be documented
for proper dissemination to allconcerned for implementation andevaluation as to the extent of itsachievement.
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FORECASTING OR ESTIMATING THE
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FORECASTING OR ESTIMATING THEFUTURE
Forecasting - helps manager look into thefuture and decide in advance where the agencywould like to be and what is to be done in order toget there.
With estimates, provide the basis for planning
Includes: Environment in which the plan will be
executed Who the client is their customs, belief, language,
dialect barriers. Public attitude and behavior, severityof` condition or illnesses, the kind of care they willreceive.
The number and kind of personnel required The necessary resources
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DEFINING THE PHILOSOPHY ANDOBJECTIVES
The philosophy flows from the purpose or missionstatement and delineates the set of values andbelief that guide all actions of the organization.It is the basic foundation that directs furtherplanning toward a mission.Societies and organizations have philosophies orsets of beliefs that guide their behavior whichcalled VALUES.Values quality having intrinsic worth for asociety or an individual and identifiesindividualism, the pursuit of self-interests, and
competition.
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DEFINING THE PHILOSOPHY AND OBJECTIVES
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DEFINING THE PHILOSOPHY AND OBJECTIVES
4 CHARACTERISTICS THATDETERMINE A TRUE VALUE :
1. It must be freely chosen from among thealternatives only after due reflection
2. It must be prized and cherished3. It is consciously and consistently repeated
(part of a pattern)4. It is positively affirmed and enacted
IF A VALUE DOES NOT MEET ALL 4CRITERIA, IT IS A VALUE INDICATOR.
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DEFINING THE PHILOSOPHY AND OBJECTIVES
Individual values should not conflictwith the organization.
Manager should have a value systemconsistent with the organization
All philosophies must be translatedinto specific goals and objectives ifthey are to result in action.
Thus, goals and objectivesoperationalize the philosophy.
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DEFINING THE PHILOSOPHY AND OBJECTIVES
A goal may be defined as the desired result
toward which effort is directed. it is the aim of philosophy. Goals, much like philosophies and values, change
with time and require periodic reevaluation and
prioritization. Objectives are similar to goals in that theymotivate people to a specific end and are explicit,measurable, observable or retrievable andobtainable.
Objectives however are more specific andmeasurable than goals because they identify how And when the goal is accomplished.
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DEFINING THE PHILOSOPHY AND OBJECTIVES
Objectives can focus either on thedesired process or the desired result.
Processed objectives are written in termsof the method to be used, whereas result-focused objectives specify the desired
outcome Objectives should have a specific time
frame, be behaviorally stated, beobjectively evaluated, and identify positiverather than negative outcomes.
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FORSETTING THE TIME FRAME
TIME MANAGEMENT is a techniquefor allocating ones time through thesetting of goals, assigning priorities,identifying and eliminating wasted time,
and using managerial techniques to reachgoals efficiently. Nurse-leaders who learn to manage time
effectively will be more productive, inboth their professional and their personallives.
Taking time to plan time saves time.
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TIME MANAGEMENT In some ways, time management is amisnomer: what is managed is how time is
used. In todays downsized health care
organization, the pressure to do more inless time has increased.
Job enlargement occurs when a flatter
organizational structure causes positionsto be combined and results in mangershaving more employees to supervise.
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Time Management In a horizontal organizational structure fewformal channels for communication exist so thetime needed to communicate with staff increases.
Time can be used proactively and reactively Proactive approach when energy is focus on
people and events over which the manager havedirect or indirect control
Reactive approach if majority of the managerstime is spent on what concerns him most aboutother people and events that troubles him whichmakes his efforts less effective.
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TIME WASTER It is something that prevents a personfrom accomplishing the job or achieving
the goal. Common Time waster:
Interruptions such as telephone calls and drop-in visitors
Meetings both scheduled and unscheduled Lack of clear-cut goals, objectives, and
priorities Lack of daily/weekly plans Lack of personal organization and self
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Cont. Lack of knowledge about how one spends
ones time Failure to delegate, working on routine
tasks
Ineffective communication Waiting for others, not using transition
time effectively
Inability to say no
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TIME ANALYSIS The 1st step is to analyze how time is being used. The 2 nd is to determine whether time use is
appropriate to your role
( some time may be used in doing things that seem tobe busywork rather than activities thatcontribute to a particular outcome)
Job redesign- places emphasis on ensuring that
time is spent wisely and that the right individualis correctly assigned the responsibility for tasks.Time Logs- useful in analyzing the
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HOW TO MANAGE THE
MANAGERS TIME 1. Setting Goals it is establishingones own goals and time frames Nurses are accustomed to setting both long andshort- range goals, although typically such goalsare stated in terms of what patients willaccomplish rather than what the nurse willachieve.Defining goals and time frames helps reducestress by preventing the panic people often feelwhen confronted with multiple demands.
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How to Manage Time
Determine priorities Take into consideration both long-term andshort term goals as well as the importance andurgency of each activity
Daily planning and scheduling Prepare a to-do list (planned for workday or
workweek) Flexibility must be a major consideration to
allow to deal with emergency and crises Focus is not on the activities or events but
on the outcomes that can be achieved in thetime available.
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cont. Daily planning and scheduling It is necessary to have a system to keep track
of regular schedules (should be used whenestablishing the to-do list)
It should include calendar and files (Calendar includes information on the
purpose, who will attend, time and place) (Files are maintained by date so that they are
readily retrievable when needed)
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Cont. Grouping activities and minimizing routine work
Work items that are similar in nature andrequire similar environmental surroundings andresources should be grouped within divisions ofthe work shift.
Group routine tasks, esp those that are notimportant or urgent, during the leastproductive time
Pick a task that can be successfully completedand save it for the end of the day. can reducea sense of overload and stress
Implementing the daily plan and daily follow-upis essential in managing time
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Cont. Personal organization and self-discipline
Managers must have clearly defined prioritiesbased on a well-defined, measurable, andachievable objectives.
These objectives are often related to those of
many professionals, as well as to objectives ofpatients and their families. Managers must have the ability to say NO Taking on too much work can lead to overload
and stress Being realistic about the amount of work towhich the manager commit is an indication ofeffective time management.
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Cont. Personal organization and self-discipline
Be assertive in communicating own needs toothers
A cluttered desk, working on too many tasks atone time, and failing to set aside blocks ofuninterrupted time to do important tasks alsoindicate a lack of personal discipline.
Managers should clean their desk, get out thematerials needed to complete the most highest
priority and start working on it immediately FOCUS on one task at a time, making sure to
Start with a high-priority task.
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Time-saving techniques
Devote a few minutes at the beginning of eachday for planning
Organize the work space so it is functional
Close the door when there is a need toconcentrate Learn organization /manager can delegate Develop effective decision making skills in the
agency Make good use of the spare time
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Controlling Interruptions Keep an interruption log on an occasional basis this should show who interrupted, nature ofinterruption, when it occurred, how long it lasted,
what topics were discussed, the importance ofthe topics, and time-saving actions taken. Analysis of these data may identify patterns that
can be use to plan ways to educe the frequencyand duration of interruptions
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Controlling Interruptions E-mail
E-mail can enhance time managementor it can be a time waster
Checking email too often can wastetime
Set specific times of the day tocheck e-mail
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Controlling Interruptions Paperwork Plan and schedule paperwork
Sort paperwork for effective processing Send every communication electronically unless a
paper memo, report, or letter is required. Analyze paperwork frequently review filing
policies and rules regularly, and purge files atleast once each year. Do not be afraid torecommend changes, when possible, formats canbe revised if needed to.
Do not be a paper shuffler handle a piece ofpaper only once, means each time a paper ishandled, an action should be taken to furtherprocess it.
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Respecting TIME The key to using time management techniques isto respect ones own time as well as that ofothers
People who respect their time are likely to findothers respecting it also Reciprocate by respecting the time needs of
others
The effort to manage time is by: Determiningpriorities, organizing the workday and minimizinginterruptions.
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BUDGETING
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BUDGETING Budgeting is the process of planning and
controlling future operations by comparing actualresults with planned expectations A BUDGET is a detailed plan that communicates
these expectations and serves as the basis for
comparing them to actual results The budget show how resources will be acquiredand used over some specific time interval;
Its purpose is to allow management to project
activities into the future so that the objectivesof the organization are coordinated and met. It helps ensure that resources necessary to
achieve these objectives are available at theappropriate time 62
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BUDGETING Managing a budget is a process of planning for a
specified time in the future, usually one year,monitoring how well the plan is working during thebudget time period, and adjusting the budgetaccordingly for the next budget cycle.
The budgetary process allows the manager tovisibly identify resource problems early and toadjust them to changing situations. Well-managed budget uses the organizations
resources to best provide quality patient care.
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The Budgeting Process Budget is a quantitative statement, usually in
monetary term, of the plans and expectations of adefined area over a specified period of time.
Budget- provide a foundation for managing andevaluating financial performance
Budget detail how resources (money, time,people) will be acquired and used to supportplanned services within the defined period oftime.
Budget purpose - allow management to projectaction plans and their economic impact on thefuture so that objectives of the organizations arecoordinated and met.
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Budgeting Process Increases the awareness of costs and also helps
employees understand the relationships amonggoals, expenses, and revenues.
Budgets also help management control theresources expended through an organizationalawareness of costs.
Budget performance provides management withfeedback about resources management and theimpact on the budget
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Approaches to Budgeting Cost Centers managers are responsible for
predicting, documenting, and managing the costs(staffing, supplies)
Revenue Centers managers are responsible forgenerating revenues (patient volumes)
Profit Centers managers are responsible forgenerating revenues and managing costs so thatthe department shows a profit (revenue exceedcosts)
Investment Centers managers are responsiblefor generating revenues and managing costs andcapital equipment (assess)
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Incremental Budget Incremental or line-by-line budget
each expense item or category is distributed ina budget worksheet
Finance department distributes a budgetworksheet listing each expense item or categoryon a separate expense line
Expense line divided into salary and nonsalaryitems
Advantage simplicity of preparation Disadvantage discourages cost efficiency
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Fixed or Variable Budgets
Fixed budgets - amounts are setwithout regard to changes that mayoccur during the year, such aspatient volume or program activities
Variable budgets - adjusted based onchanges in revenues, patient census,
utilization of supplies, and otherexpenses
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Fixed or Variable Budgets Budget that are categorized as fixed if the
budget amount are set without regard to changesthat may occur during the year, such as patientvolume or program activities, that have an impactof the cost assumptions originally used for the
coming year Variable budgets- developed with the
understanding that adjustments to the budgetmay be made during the year based on changes in
revenues, patient census, utilization, and otherexpenses.
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Preparing the Budget
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Preparing the Budget A budget is an annual operating plan, a
financial road map and plan which serves a anestimate of future costs and a plan forutilization of manpower, material and otherresources to cover capital projects in theoperating programs.
A budget is a plan for future activitiesexpressed in operational as well as financial ormonetary terms. In a health care institution, this consists of 4
components: 1. revenue budget, an expense budget, a cash budget
and a capital budget
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BUDGET
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REVENUE BUDGET SUMMARIZES INCOMEWHICH MANAGEMENT EXPECTS TO GENERATEDURING THE PLANNING PERIOD
EXPENSE BUDGET DESCRIBES THE EXPECTEDACTIVITY IN OPERATIONAL AND FINANCIALTERMS FOR A GIVEN PERIOD OF TIME.
CAPITAL BUDGET OUTLINES THE PROGRAMMEDACQUISITIONS, DISPOSALS ANDIMPROVEMENTS IN AN INSTITUTIONSPHYSICAL CAPACITY
CASH BUDGET REPRESENTS THE PLANNED CASHRECEIPTS AND DISBURSEMENTS AS WELL AS THECASH BALANCES EXPECTED DURING THEPLANNING PERIOD.
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Revenue Budget Represents the patient care income expected for
the budget period. Revenue projections for the next year are based
on the volume and mix of patients, rates, anddiscounts that will prevail during the budgetperiod.
Projections are developed from historical volumedata, impact of new and modified clinicalprograms, shifts from inpatient to outpatient
procedures, and other influences. Also taken into consideration are projected revenuesderived from Medicare, Medicaid, commercial insurancecompanies, HMOs, and other 3 rd party payers.
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Cont
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Cont. Medicare payments for inpatient services
are made as a predetermined specific ratefor each Medicare recipient based on thepatients diagnosis
Care is classified into diagnosis-relatedgroups (DRGs). Payments are made based on the assumption
that patients with the same DRG use similarresources.
DRGs are based on primary and secondarydiagnoses, age and treatment received.
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Expense Budget Consist of salary and nonsalary items Expenses should reflect patient care
objectives and activity parametersestablished for the nursing unit It is comprehensive and thorough;
taking into consideration all availableinformation regarding the next yearsexpectations.
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Cost Centers Nursing units bare typically considered cost
centers A cost center is described as the smallest area
of activity within an organization for which costsare accumulated. Nursing managers are commonly given the
responsibility for costs incurred by theirdepartment, but they have no revenueresponsibilities.
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Profit Center If manager is responsible for
controlling both costs and revenuesand if their financial performance ismeasured in terms of profit (thedifference between revenues andexpenses) then the manager isresponsible for a profit center
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Classification of Costs Direct Costs are expenses that directly
affect patient care. Example salaries for nursing personnel
who provide hand-on patient care areconsidered direct costs.
Indirect Costs are expenditures that a
are necessary but dont affect patientcare directly. Example - Salaries for security or
maintenance personnel79
BENEFITS DERIVED FROM
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BENEFITS DERIVED FROMBUDGETARY PROCESS
Budgeting stimulates thinking inadvance. It anticipates futureopportunities or problems and
prepares for them. It leads to specific planning Budget preparation stimulates action
and intercation
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Factors in Budget Planning (in
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nursing)
1. Type of patient2. Size of hospital and its bed capacity3. Physical layout of the hospital, the size
and plan of wards or units, the Nursesstation, treatment rooms, etc
4. Personnel policies5. Grouping of patients
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Factors in Budget Planning (in
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nursing)
6. Standards in nursing care7. The method of performing nursing carewhether simple or complex
8. The method of documentation9. Proportion of nursing care provided by
professional nurse and those given by non-professionals
10. The amount and quality of supervisionavailable and provided
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Factors in Budget Planning (in
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Factors in Budget Planning (innursing)
11. Efficiency of job description and jobclassification
12. Method of patient assignment13. The amount and kind of labor-saving devices and
equipment; intercommunication systems14. The amount of centralized service provided;
sterile supply central oxygen service; linen supply15. The nursing service requirements of the ancillary
dept.: clinics. Admitting office, ER16. Reports required by administration whether
s simple or complex17. Affiliation of nursing students
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Determining the Salary(personnel) Budget
Salary Budget - also known as Personnelbudget projects the salary costs thatwill be paid and charged to the cost centerin the budget period.
Managing the salary budget is directlyrelated to the managers ability tosupervise and lead the staff.
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Benefits FTEs or full-time equivalents are necessary to
replace personnel for benefit time (vacations,holidays, personal days, and so on).
This factor can be calculated by determining theaverage number of vacation days, paid holidays,personal days, bereavement days, or other daysoff with pay that the organization provides andthe average number of sick days per employee asexperienced by the cost center
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Determining FTEs
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Determining FTEsrequired for replacement Determine hours of replacement time per
individual Then determine FTE requirement
Benefit Time Hours/Shift Replacement Hrs15 vacation days x 8 hours =1208 holidays x 8 hours = 644 personal days x 8 hours = 325 sick days x 8 hours = 40
total = 256
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Cont. Divide replacement time by annual FTE
base 256 / 2,080 = 0.12 From the FTE calculations an FTE budget is
calculated This budget provides the base for the salary
budget However the shift differentials, overtime, and
bonuses or premium also may affect budgetperformance and need to be considered
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Capital Budget This budget identifies physical renovations, new
construction, and new or replacement equipmentplanned within a specified time period.
Limited to a specified amount and decisions needto be made how best to allocate available funds The nurse manager is responsible for assisting in
selecting and determining the amount ofequipment needed.
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Future Trends
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Future Trends A major trend in financial management of health
care organizations is the shift from a revenue-based to a cost-based accounting system. With the shift to managed care, the focus is
decreasing the cost to maintain adequate profit
margins in an era of diminishing compensation. This trend has serious implications to nursing Nursing has always been considered a cost, not a
source of revenue. It is a challenge to be
consistently cost conscious and to measure,manage and document nursing cost-effectivenessin this financial environment.
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