Posted: March 22nd, 2023

Budget Implications

Nursing units are important cost centers in every healthcare organization because they require sufficient resources to operate effectively. Therefore, nurse leaders should understand the budget implications of operating each unit. They should recognize the impact of a budget when running their organizations, including the ability to adequately resource the units to provide safe and quality services. One of the budget implications that the nurse leader should understand is the personnel budget because it is the leading part of the organization’s operating financial plan. The budget contains a variety of factors, including the patient acuity, average daily census, personnel necessary to provide full-time equivalents (FTEs), and productive and non-productive hours (Dunham-Taylor & Pinczuk, 2014). Notably, an organization becomes efficient if it has adequate human resources to provide the necessary services that consumers demand.

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Besides the employees as part of the budget, nurse leaders should understand the budgetary implications of medical and office supplies, equipment, training needs, and other expenses to support the operations of the organization. Even if a healthcare organization has adequate human resource teams, it should have other supporting resources to provide safe and quality care. Although nurse leaders base their budgets on assumptions, they use past expenses for the human resource and supplies to correctly anticipate the budget estimates of the following year (Yoder-Wise, 2014). However, the leader should understand the revenue implications since it is used to cover the budget. They should predict the organization’s income accurately to allocate it to the budgeted items. Although nurse leaders may not be directly involved in creating the budget, they should understand how the various components affect their service provision in the health care organization.


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