NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

Name

Capella university

 NURS-FPX 6216 Advanced Finance and Operations Management

Prof. Name

Date

Mentor Interview

Financial governance by nurse leaders is crucial for optimizing resource allocation and maintaining the economic stability of medical institutions (Dong et al., 2021). This study will investigate the significance of financial management expertise among nursing leaders and its effect on the success of healthcare organizations. By interviewing Kimberly, an experienced professional director and nursing leader at Maplewood Community Hospital (MCH), we will obtain valuable insights into budget formulation, financial strategies, and problems.

Comparison of Operating and Capital Budget Management

Managing an operational budget contrasts significantly with handling a capital budget in numerous fundamental ways. The operational budget focuses on current, recurring expenses essential for daily healthcare activities, including employee wages, utilities, medical equipment, and routine maintenance (Gaffney et al., 2023). Conversely, the capital budget focuses on long-term investments, including the purchase of new medical equipment, facility renovations, and service expansions. This budget involves major expenditures for infrastructure development, equipment, and technological upgrades aimed at future growth (Gaffney et al., 2023).

For business managers and nursing leaders like Kimberly at MCH, managing an operational budget entails overseeing both expenditures and income to maintain seamless facility operations while staying within financial limits. This includes managing costs such as staff overtime and optimizing revenue through efficient billing practices and patient volume adjustments (Cerullo et al., 2022). Kimberly pointed out that her approach includes strict cost control and regular financial evaluations, which are vital for maintaining the facility’s economic stability. Her strategies include setting budgetary limits on non-essential expenditures and conducting periodic audits to ensure responsible financial management (Cerullo et al., 2022).

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

Financial management for both budget categories relies on essential methods, such as Cost-Benefit Analysis (CBA) and variance analysis. For instance, Kimberly uses variance analysis to manage her operating and capital budgets, identifying gaps between forecasted and actual spending and making necessary corrections. Managing an operating budget is a challenge with unexpected expenses and sustaining productivity within financial limits. Kimberly tackles this by creating a reserve fund for emergencies and using data analytics tools to enhance operational efficiency and reduce waste (Nguyen et al., 2024).

Conversely, handling a capital budget requires a strategic, long-term approach, exemplified by planning for the procurement of cutting-edge medical technology. It involves expenditures and ensuring that investments support the organization’s mission and future objectives, such as expanding patient services and enhancing care quality. Kimberly’s strategy includes detailed CBA and arranging plans grounded on their projected Return on Investment (ROI), like assessing the financial impact of a new diagnostic imaging system (DiCesare et al., 2021).

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

A key challenge she identified is accurately forecasting long-term economic needs and defending investments for stakeholders. Nurse leaders must navigate these varying demands while operating budgets focus on short-term financial stability and operational efficiency, showed by managing daily expenses and staffing levels. Capital budgets require a approach to secure sustainable growth and progress, such as planning for facility expansions. Successfully managing both is essential for maintaining the financial health and strategic advancement of healthcare facilities (DiCesare et al., 2021).

The variability of daily patient volumes and associated costs introduces considerable uncertainty when administering an operating budget. For capital budgets, expecting enduring economic needs and ROI involves inherent risks, complicating the justification of investments. Furthermore, shifts in healthcare regulations and technological advancements affect both budget types in unexpected ways, such as changes in reimbursement rates and the introduction of new medical technologies, necessitating ongoing adaptability and flexibility (Thusini et al., 2022).

Resource Allocation for Equipment, Labor and Services

The distribution of staff, diagnostic tools, and service reserves requires an organized method to safeguard optimal use and placement with structural objectives. One method is to use specialized software for resource planning. The process begins with labor, involving the assessment of staffing requirements based on patient volume forecasts and historical data. Kimberly emphasized the importance of leveraging productivity metrics and adaptable staffing models to enhance labor distribution, like employing a flexible staffing approach during peak hours (Thusini et al., 2022).

The process of allocating equipment involves managing inventory and assessing needs. Kimberly implements rigorous inventory control and performs regular audits, such as tracking equipment turnover rates, to guarantee the availability of essential items. She utilizes data from usage statistics, maintenance records, and emerging technology trends. Collaboration with clinical staff and the finance department aids in identifying equipment requirements and modifying expenditures through CBA, such as evaluating the ROI for new diagnostic machines (Karamshetty et al., 2021).

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

Kimberly collects facts from health records, amenity reports, and input from medical squads, including patient satisfaction surveys. She reviews service performance and costs by analyzing compliance with service contracts. It aids in evaluating cost-effectiveness and assessing the resources allocated to contribute to improved operational efficiency. Regular reviews of service performance and costs, such as analyzing service contract compliance and cost-effectiveness, ensure that allocated resources enhance efficiency (Thusini et al., 2022).

Kimberly’s approach underscores the importance of collaborating with essential parties, such as unit leaders, budgetary staff, and healthcare professionals, who provide vital perspectives and information. Operative management assumes that coordinating resource distribution with the institution’s strategic objectives will ensure financial efficiency (Anderson et al., 2020). Labor resource allocation depends on reliable patient volume forecasts and precise productivity metrics. Equipment allocation relies on the assumption that inventory management practices and utilization rates stay steady. Service allocation is based on the premise that historical service usage data predict future needs through unexpected factors (Karamshetty et al., 2021).

Planning for Profitability and Fiscal Success

An active plan for achieving productivity and fiscal success involves a systematic method of budget creation and management. This includes establishing a strategic process for developing budgets. Kimberly emphasized the importance of aligning budgetary choices with the institution’s economic objectives and vision. This strategy entails involving key contributors from various units to ensure that budget distributions back projects that increase income and improve cost efficiency (Anderson et al., 2020).

Frequent financial evaluations and performance analyses are essential for monitoring progress and implementing required changes. Budget management impacts the organization’s economic well-being by offering a framework for reserve distribution and expense regulation. Kimberly highlighted the need to identify and promptly address budget variances through thorough variance analysis. This procedure includes investigating the underlying reasons for discrepancies from projected facts to mitigate any negative impact on financial results (Pham et al., 2020).

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

Discretionary expenditures can impact financial stability, as they offer flexibility and alternative options in resource allocation while also posing a risk to the organization’s economic health. Kimberly emphasized the importance of making careful decisions about optional expenditures to prevent issues like budget overruns and misallocation of resources. She stressed the need to balance immediate needs with long-term financial health and advised caution to avoid excessive reliance on elective spending (Anderson et al., 2020). Kimberly emphasized the benefits of using creative budgeting methods, like zero-based budgeting and activity-based costing, to enhance source distribution and boost economic outcomes (Pham et al., 2020).

Evaluating a Nurse Leader Approach to Budget Management

A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis can be utilized to evaluate Kimberly’s budget management approach, including her strategy for optimizing resource allocation. Kimberly’s budget oversight showcases her strengths, including a keen emphasis on expense management and continuous financial reviews to maintain fiscal accountability. Her proactive method of detecting and correcting budget discrepancies through variance investigation adheres to industry standards and supports financial stability (Więckowska et al., 2022).

Additionally, Kimberly’s collaborative approach involves vital stakeholders, promotes transparency, and aligns budget allocations with organizational goals. However, there are limitations in her strategy for managing unforeseen costs arising from crises. This weakness jeopardizes financial stability and highlights the need for a more comprehensive contingency planning process to foresee and address potential risks. She can tackle this shortcoming, enhance financial literacy throughout the organization, and enable more strategic policymaking (Więckowska et al., 2022).

Kimberly’s budget organization approach is further enriched by utilizing criteria from reputable resources like the Healthcare Financial Management Association (HFMA), which provides guidelines emphasizing financial transparency and strategic alignment (HFMA, 2023). Additionally, the American Nurses Association (ANA) offers best practices for budget evaluation, focusing on performance measurement. These practices help nurse leaders better evaluate the efficacy of their budget administration strategies and recognize areas for development (ANA, 2024).

Conclusion

This paper investigates the significance of budget management expertise among nurse leaders, focusing on Kimberly’s approach at MCH. By comparing operational and capital budget management, resource allocation, and planning for financial success, the analysis highlights her strengths in cost control and stakeholder collaboration. It also identifies areas for improvement, such as handling unforeseen expenses, and suggests enhancements through training and adherence to best practices from organizations like HFMA and ANA to ensure financial stability.

References

ANA. (2024, February 9). Financial management skills for nurse managers. ANA. https://www.nursingworld.org/content-hub/resources/nursing-leadership/nursing-financial-management/ 

Anderson, D. M., Cronk, R., Best, L., Radin, M., Schram, H., Tracy, J. W., & Bartram, J. (2020). Budgeting for environmental health services in healthcare facilities: A ten-step model for planning and costing. International Journal of Environmental Research and Public Health, 17(6). https://doi.org/10.3390/ijerph17062075

Cerullo, M., Lin, Y.-L., Hain, J. A., Ho, V., & Offodile II, A. C. (2022). Financial impacts and operational implications of private equity acquisition of US hospitals. Health Affairs, 41(4), 523–530. https://doi.org/10.1377/hlthaff.2021.01284

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

DiCesare, R., Toor, J., Wolfstadt, J., Raveendran, L., Chung, S., Rampersaud, R., Milner, J., & Koyle, M. (2021). Using return on investment operational and Monte Carlo modeling techniques to predict financial performance in a tertiary care outpatient clinic. Urology Practice, 8(4), 487–494. https://doi.org/10.1097/upj.0000000000000235

Dong, E., Xu, J., Sun, X., Xu, T., Zhang, L., & Wang, T. (2021). Differences in regional distribution and inequality in health-resource allocation on institutions, beds, and workforce: a longitudinal study in China. Archives of Public Health, 79(1). https://doi.org/10.1186/s13690-021-00597-1

Gaffney, A. W., Himmelstein, D. U., Woolhandler, S., & Kahn, J. G. (2023). Hospital expenditures under global budgeting and single-payer financing: An economic analysis, 2021–2030. International Journal of Social Determinants of Health and Health Services, 53(4), 548–556. https://doi.org/10.1177/27551938231152750

HFMA. (2023). Healthcare financial management association. Hfma.org. https://www.hfma.org/

Karamshetty, V., De Vries, H., Van Wassenhove, L. N., Dewilde, S., Minnaard, W., Ongarora, D., Abuga, K., & Yadav, P. (2021). Inventory management practices in private healthcare facilities in Nairobi County. Production and Operations Management, 31(2), 828–846. https://doi.org/10.1111/poms.13445

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

Nguyen, K.-H., Nguyen, K.-H., Nguyen, K.-H., Nguyen, K.-H., Nguyen, K.-H., Nguyen, K.-H., Nguyen, K.-H., Nguyen, K.-H., & Nguyen, K.-H. (2024). Cashing in: Cost-benefit analysis framework for digital hospitals. BMC Health Services Research, 24(1). https://doi.org/10.1186/s12913-024-11132-7

Pham, C. D., Vu, S. T., & Vu, N. T. (2020). Evaluating performance of Vietnamese public hospitals based on balanced scorecard. The Journal of Asian Finance, Economics and Business, 7(6), 339–349. https://doi.org/10.13106/jafeb.2020.vol7.no6.339  

Thusini, S., Milenova, M., Nahabedian, N., Grey, B., Soukup, T., & Henderson, C. (2022). Identifying and understanding benefits associated with return-on-investment from large-scale healthcare quality improvement programmes: An integrative systematic literature review. BMC Health Services Research, 22(1), 1083, https://doi.org/10.1186/s12913-022-08171-3

Więckowska, B., Grzybek, M., & Byszek, K. (2022). Using the dynamic SWOT analysis to assess options for implementing the HB-HTA model. International Journal of Environmental Research and Public Health, 19(12), 7281. https://doi.org/10.3390/ijerph19127281