Decreasing reimbursement will likely be the norm for the foreseeable future. Therefore, financial prudence and management are the responsibility of everyone who works in a healthcare setting—including nurse managers. Indeed, nurse managers are crucial to managing an organization's resources.
Nursing budgets generally comprise about 50% of an organization's overall budget. Because nursing is the largest department in most healthcare organizations, nurses have a unique ability to control costs.
Human capital is by far the greatest expense in a nursing budget. Controlling labor costs is one of the most fiscally prudent things a nurse manager can do. This can be achieved by doing the following:
Staffing to meet the budgeted nursing hours per patient day
Minimizing overtime expenditures
Questioning whether a unit really needs additional personnel
Not filling vacated positions unless absolutely necessary
To accomplish this, nurse managers must review current work processes. For example, as a nurse manager, you might explore whether the change-of-shift report could be shortened so it does not involve overtime hours (and by extension, overtime dollars). You might also consider whether supplies could be managed more judiciously.
People generally think it's no big deal when supplies are overused. But if every department within an organization overuses supplies, it quickly adds up!
These aren't the only things nurse managers should do to improve the finances of their organization, however. Following are five action points to help nurse managers improve the bottom line for their organization and for healthcare in general. Review these and assess how you can apply them at your organization. Then read about how you can better embrace change.
Action Point 1: Get Politically Involved
My mother always said that politics was a bad word. Over the years, though, I have learned that we all must use politics to benefit ourselves and our organizations.
With respect to politics that relate to reimbursement, nurse managers must align with their organization and with their chief executive officer (CEO) in the effort to secure more funding for the delivery of health services. Without adequate funding, many hospitals are doomed to failure—which will absolutely affect nurses.
Think about it: What would happen to you if your healthcare organization closed? Where would you seek employment? Even if your hospital remains open, it will still need adequate funding for expenses such as salary raises!
Understanding the Role of PACs
Most CEOs belong to the American Hospital Association and their respective state hospital association—for example, the New Jersey Hospital Association. Large organizations like these, as well as the American Nurses Association, AARP, and others, have political action committees (PACs). Funds donated to these PACs are used to survey political candidates running for office. PACs then make recommendations to their members as to whom to vote for ...