Mastering the Nursing Budget Process
Key Concepts in Managing Labor Expenditures
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As hospital and health system executives begin analyzing their budgets for savings opportunities, it has quickly become apparent that dramatic cost reductions cannot occur without reining in spending on the largest line item: labor costs. Despite the industry’s ever-growing investment in medical and information technology, wages, salaries, and benefits continue to represent upwards of 60 percent of the total operating budget.
Nursing leaders are uniquely positioned to contribute to this portion of the cost-reduction effort, yet without a comprehensive understanding of budgeting, they often hardwire old mistakes into future cost predictions and decisions. This course will provide participants with the skills and frameworks they need to assume a leadership role in managing budgets and making staffing-related decisions within their areas of responsibility. Participants will gain a better understanding of how to accurately create a budget, as well as how to best correct for variances if and when they occur.
Learning objectives for participants
- Understand the concepts, assumptions, and calculations that underlie an effective and accurate budget
- Calculate the impact of staffing and operational decisions on budget
- Conduct comprehensive variance analyses and create action plans to address variance, with a special focus on productivity and labor cost variances
Course content and teaching methodology
This course incorporates classroom presentation, interactive exercises, and group discussion. The following topics are among those included in this course:
Reframing the budget as a blueprint for financial leadership
- Recognizing budgeting as a leader’s contribution to the overall financial performance of the organization
Understanding the underpinnings of an effective and accurate budget
- Overcoming cognitive biases that inhibit conscientious spending and decision making
- Conducting a series of stepwise calculations and assessments to determine the appropriate care model
Conducting variance analyses and creating robust plans for variance correction
- Identifying the primary drivers of variances
- Determining which corrective actions are the most impactful and easiest to implement