Budgeting in nursing involves allocating financial resources to nursing-related activities in a healthcare organization. It incorporates drafting estimates of revenue and expenses a healthcare organization is expected to incur. Nursing budgets provide plans of how revenue will meet expenses to ensure smooth operations of a healthcare organization; they are tools that nurse leaders and healthcare organizations leverage to translate visions into actions (Zhang & Bohlen, 2023). Nurse managers tasked with developing budgets must ensure that proposed budgets sustain adequate staffing levels and consistently maintain necessary equipment and supplies. In some cases, nursing budgets may allocate funds for furthering nursing employees’ professional development through education and seminars. Overall, nursing budgets offer a forecast of how financial resources will be effectively and efficiently utilized. Nonetheless, factors exist that impact budgeting. Such factors may be internal or external. This essay will delve into the intricacies of budgeting in nursing, mainly focusing on the internal and external factors that impact the development of nursing budgets.
Internal and External Forces Impacting the Development of the Budget.
Internal Forces
Internal forces include human resources, supplies, equipment, different patient care needs, and services offering integrated support of healthcare delivery service. Internal forces are imperative for the smooth running of a healthcare center or organization. Primarily, nursing employees are principal components of an effective and better-serving health center. Budget preparations must consider a hospital’s staff capacity and adequately allocate funds to those staff.
Another internal factor with potential influence on a nursing budget is the variety of patient needs that a facility can cater to. Notably, patients with medical needs are primary stakeholders in healthcare. As nurse and health facility leaders develop budgets, they must focus on the specific patient needs that the hospital can cater to. Differences in patient need, and the level and complexity of such needs can thus influence nurse managers to increase or reduce allocated funds in the budget.
Further, another internal factor that significantly impacts budgets developed by nurse managers is infrastructure and facilities. Health facilities and the infrastructure used in them influence budgetary plans. The physical environment where a health facility is located dictates the size of the facility, thus influencing the facility’s operating capacity. Budgets are then developed to fit the needs of either a big or small facility.
External Forces
External forces are factors that influence budgetary plans from outside the organization. Nurse managers must be aware of the various external forces, including competition, political situations, and technical advancements, which impact budgetary allocations (Gulpenko et al., 2017). Notably, the healthcare sector is a highly competitive industry, with hospitals and healthcare facilities competing to attract and retain patients and nurses. Such competition leads nurse managers to develop innovative ways to adjust nursing budgets to remain competitive. Nurse leaders may adjust nursing budgets to offer competitive salaries to nursing staff or improve patient care to ensure more patients use the services offered.
Technological advancements are another vital external factor that consistently influences budgets developed by nurse managers. Advancements in medical technologies and solutions influence budgets developed by nurse managers. The contemporary health industry experiences consistent progression or innovation of technological solutions. Innovative solutions may come about as approaches to increase efficiency and lower costs. Nurse managers must look for upcoming and improved technological solutions that positively impact patient care. This requires that nurse managers develop budgets that cater to such technological progress. In some cases, improved technologies require staff training, opening up further areas where nurse managers are called upon to develop budgets.
Moreover, regulations enacted by the government and other agencies that set standards of practice can influence nursing budgets. Enacted policies and standards of care impact the care nurses offer and may lead to additional costs for training, documentation, and quality assurance measures. All this calls for necessary budgeting by nurse managers to ensure smooth healthcare operations in a health center.
How Various Forces Impact the Nursing Budget
Present Healthcare and Nursing Trends
Healthcare is an evolving sector that comprises consistent changes in various elements. Such dynamism results in consistent budgetary reforms, which ensure facilities stay competitive and profitable. Notably, present healthcare and nursing trends have a multifaceted impact on nursing budgets. Trends such as technology advancements, changing healthcare regulations, and shifting patient needs influence what is budgeted for by nurse managers. For example, advancements such as artificial intelligence and telehealth are increasing in popularity and require nurse managers to budget for their implementation in health facilities to improve efficiency and care quality.
Healthcare reforms
Reforms in healthcare practice or standards also impact what is included in a healthcare facility’s budget and what is not. Governments and regulatory bodies constantly update healthcare regulations to reflect current standards of practice in care. In addition, changing technological solutions, aging populations, changes in disease patterns, and the discovery of new treatments and policies bring about diverse health reforms (Nilsen et al., 2020). Such reforms and changes require healthcare organizations to change their practices and infrastructure. These changes significantly impact what nurse leaders allocate funds to when developing nursing budgets.
Accreditation agencies
Agencies that accredit nurses and healthcare organizations significantly impact what nurse managers can budget for. Accrediting agencies set care standards and guiding frameworks that healthcare facilities and nurses must follow to deliver safe, high-quality nursing care. These agencies also evaluate various nursing care aspects, such as staffing levels, education, and competency. Nurse managers must thus be vigilant in their budgeting to ensure that whatever budget is in line with what accrediting agencies allow. This can increase costs associated with staffing, education, competency assessment, compliance, and quality improvement; however, it ultimately contributes to the provision of better care for patients.
Consumer groups
Patients can be divided into different health consumer groups depending on their needs. Nursing managers can divide patients into consumer categories, which they later use when allocating funds to purchase equipment, supplies, and staff. Different patient consumer groups will necessitate different equipment and supplies to afford them care, thus impacting what nurse managers will buy or budget for in their departments and organizations.
Nursing Education
Continuous nursing education is necessary to ensure that nursing staff stay informed and have consistent professional development. Nurse managers must allocate funds to continually train and educate their nursing staff on upcoming and relevant care solutions. Ensuring consistent and adequate nursing education is costly and thus requires astute budgeting to keep costs relatively low.
The hospital’s organizational culture
The organizational culture that a particular hospital follows significantly influences what budgetary plans they are willing to uphold or follow. Some hospitals will have strict regulations that nursing leaders must adhere to when budgeting, while others have less strict rules and allow nurse managers more control over what to budget for and what not to. Organizational culture influences many aspects of care, including management and resource allocation (Aydogdu, 2023). For instance, a culture that influences collaboration and communication can lead to efficient resource utilization and budgeting.
The nursing organizational culture
Organizational culture is imperative and describes the collective social behavior of a particular group of people. Supportive, collaborative, and empowering nursing organizational cultures will likely enhance resource utilization and overall efficiency with which patients are afforded care.
Conclusion
In sum, many factors impact budgeting in nursing. Some factors are internal and thus propagated by internal components of a healthcare facility, including the nursing staff and patient needs prioritized by the facility. Other factors are external and include market competition and technological advancements. All these factors influence what nurse leaders prioritize when developing nursing budgets in their health departments and organizations.
References
Aydogdu, A. L. F. (2023). The Impact of Organizational Culture on Nursing: A Comprehensive Analysis. World Academic Journal of Management, 111(4), 32-41. https://www.researchgate.net/publication/377231294_The_Impact_of_Organizational_Culture_on_Nursing_A_Comprehensive_Analysis
Gulpenko, K., Tumashik, N. & Filiasova, Y. (2017). External and internal factors in organizational budgeting methodology formation. MATEC Web of Conferences. Retrieved from https://www.matec-conferences.org/articles/matecconf/pdf/2017/20/matecconf_spbw2017_08103.pdf
Nilsen, P., Seing, I., Ericsson, C., Birken, S. A. & Schildmeijer, K. (2020). Characteristics of successful changes in health care organizations: an interview study with physicians, registered nurses, and assistant nurses. BMC Health Serv Res 20, 147. https://doi.org/10.1186/s12913-020-4999-8
Zhang R, Bohlen J. (2023). Healthcare Business Budgeting. In: StatPearls [Internet]. StatPearls Publishing. Available from: https://www.ncbi.nlm.nih.gov/books/NBK589707/