In the capacity of a nurse manager overseeing a recently established urgent care clinic, the development of an operating budget becomes imperative. The budget serves as a financial oversight tool, ensuring effective functioning by delineating day-to-day expenses such as salaries, supplies, and routine costs for the upcoming year (Evans et al., 2023). The nurse manager’s responsibility involves continuous monitoring of expenditures in relation to projections and making necessary adjustments in response to changing conditions. Hospitals commonly utilize flexible budgets, specifying variable expenses linked to patient numbers alongside steady fixed costs. Given the fluctuating nature of urgent care visits, the budget’s focus lies on the correlation between workload and expenditures, facilitating adaptability. The meticulous development of an operating plan, highlighting anticipated resource needs and revenue streams, is crucial for the initial year of operations in the new urgent care clinic. Rigorous tracking of actual figures against the budget promotes responsible financial management and upholds the delivery of quality care.
Preparing Operating Budget
The budget presented in Table 1. is a comprehensive representation of an urgent care clinic’s operating budget, covering a one-year time period. It is structured in accordance with standard formatting conventions prevalent in healthcare settings. The major sections of the budget are clearly delineated, with ‘Revenue’ and ‘Expenses’ being the primary categories. Under ‘Revenue’, specific line items such as ‘Inpatient Revenue’, ‘Outpatient Revenue’, and ‘Net Patient Services Revenue’ are distinctly identified. Similarly, the ‘Expenses’ section includes detailed line items like ‘Salaries and Wages’, ‘Supplies’, ‘Nice to Have Items’ and ‘Rentals and Leases’. The budget concludes with the ‘Excess over Revenue’, providing a clear picture of the financial health of the clinic. This budget provides a foundational understanding of the financial planning necessary for an urgent care clinic.
Table 1
| Components of the Operating Budget | Amount (in USD) |
| Revenue | |
| Inpatient Revenue | 500,000 |
| Outpatient Revenue | 300,000 |
| Total Patient Service Revenue | 800,000 |
| Contractual Adjustments | -100,000 |
| Charity and Uncompensated Care | -50,000 |
| Net Patient Services Revenue | 650,000 |
| Total Budget Revenue | 650,000 |
| Expenses | |
| Salaries and Wages | 300,000 |
| Supplies | 100,000 |
| Nice to Have Items | 50,000 |
| Rentals and Leases | 50,000 |
| Purchased Services – Utilities | 20,000 |
| Depreciation Expense | 30,000 |
| Total Budget Expense | 550,000 |
| Excess over Revenue | 100,000 |
Knowledge Gaps or Areas of Uncertainty
The area of uncertainty in the operating budget lies in its predictive nature, which is subject to fluctuation based on future scenarios. This introduces the possibility of deviations from the budgeted figures. Furthermore, the budget does not currently account for the incorporation of the latest technologies, an aspect that could significantly impact future expenses and operations. Therefore, additional information and careful consideration are required to integrate potential technological advancements into the operating budget for the upcoming year.
Designing the Budget
The design and creation of a budget for an urgent care clinic involve a systematic and thoughtful process to ensure financial stability and effective operations. The process includes making assumptions based on historical data and industry standards, allocating funding for labour and equipment costs, and utilizing various sources of information to inform decision-making (Kim & Basu, 2021). A detailed analysis of the clinic’s operations is undertaken, with each department considered a cost center, and expenses associated with each department listed as line items in the budget.
Assumptions
Assumptions play a crucial role in budget creation, and they are derived from historical data and industry standards. For instance, assuming a certain expected number of patients is based on the clinic’s past performance and comparable industry benchmarks (Willmington et al., 2022). Similarly, the costs of supplies and labour are projected based on historical expenditure patterns and prevailing industry rates (American Hospital Association, 2022).
Labor Costs
Labour costs, a significant component of the budget, are carefully estimated by considering staffing requirements and workload. Staffing requirements are determined based on the expected number of patients, and workload is calculated by factoring in the hours of operation and the average time spent per patient (Griffiths et al., 2019).
Equipment Costs or Ongoing Expenses
Assessment of equipment needs is essential for providing accurate cost estimates. Ongoing expenses associated with equipment, such as maintenance and upgrades, are factored into the budget under relevant line items, such as ‘Depreciation Expense.’ Anderson et al. (2020) emphasized the need for factoring ongoing equipment expenses into budgets, ensuring the sustainability of healthcare operations.
Staffing Requirements
Staffing requirements are a key consideration in budget creation. This involves estimating the number of healthcare professionals needed based on the expected patient load and ensuring that the budget allocates adequate funds for salaries and wages. For instance, Yinusa and Faezipour (2023) advocate for a data-driven approach to staffing, considering patient needs and workload to optimize resource allocation and enhance patient care.
Information Sources
The primary sources of budget information include historical financial data, industry standards, and projected growth rates. These sources provide a foundation for making informed decisions and setting realistic budgetary goals. Like, Syntellis (2021) emphasizes the importance of using a combination of historical data and industry benchmarks to enhance the accuracy of budget projections.
Workload Calculations
Calculating workload involves understanding the clinic’s hours of operation and the average time spent per patient. This information is crucial for determining staffing levels and estimating associated labour costs. Yinusa and Faezipour (2023) emphasized the significance of workload calculations in healthcare budgeting, ensuring that resources align with the clinic’s operational demands.
| Required Resources | Amount |
| Salaries and Wages | 300,000 |
| Supplies | 100,000 |
| Rentals and Leases | 50,000 |
| Purchased Services – Utilities | 20,000 |
| Depreciation Expense | 30,000 |
Conflicting Data or Information
In the process of budget creation, conflicting data or information may arise, requiring careful consideration and resolution. This could involve reconciling disparities between historical data and industry standards, ensuring the budget reflects a realistic and achievable financial plan. For example, according to Jia et al. (2021), difficulties healthcare organizations encounter when trying to reconcile differences between their historical data and industry standards. The research revealed that traditional budgeting methods frequently generate outcomes that quickly become outdated once the budget is finalized. This is mainly because there are variations between the assumptions made about service volumes and the actual volumes and unexpected shifts in how services are delivered across organizations.
Strategic Plan
The strategic plan for the urgent care clinic revolves around its mission of delivering high-quality, convenient, and affordable healthcare for non-life-threatening conditions. To achieve this, the plan focuses on enhancing patient care through investments in staff training and incorporating telehealth services. Operational optimization is prioritized to boost efficiency and cut costs, with improvements in scheduling systems and the implementation of inventory management for resource efficiency (Schaknowski et al., 2023). Service expansion is integral, aiming to meet evolving community needs by potentially adding new specialities or extending operating hours. Moreover, community engagement is a key strategy, involving outreach programs and partnerships with local healthcare providers and community organizations to strengthen relationships within the community.
Executive Leaders’ Reaction
Executive leaders are likely to scrutinize the budget closely, as it directly impacts the clinic’s financial performance and ability to deliver on its mission. They may express concerns if the budget does not adequately account for potential fluctuations in revenue or expenses, such as changes in patient volume or supply costs. Leaders may also be concerned about the budget’s alignment with the clinic’s strategic goals, such as expanding services or improving patient satisfaction (Musiega et al., 2023). According to Barroy et al. (2021), poor budgeting and planning can lead to costs being passed onto patients, which could negatively impact patient satisfaction and the clinic’s reputation.
Nice-to-Have Items
The budget does include some “nice-to-have” items, For example, funding for training and development programs for staff, which can improve their skills and knowledge, leading to better patient care. It also includes funding for new technologies, such as telehealth services, which can improve access to care and patient convenience. However, these items are considered “nice-to-have” because they are not critical for the clinic’s operations and can be adjusted or eliminated if necessary to ensure the clinic’s financial sustainability (Syntellis, 2021).
Criteria for Evaluation
The success of the strategic plan for the urgent care clinic will be gauged through multiple criteria. Patient satisfaction will be assessed through surveys, providing insights into the quality of care and overall patient experience (Perneger et al., 2020). Operational efficiency will be measured using key performance indicators like patient wait times, staff productivity, and supply usage. Tracking the utilization of new services will help evaluate their effectiveness in meeting patient needs and contributing to revenue. Community engagement success will be evaluated based on the quantity and quality of partnerships established, along with feedback from the community (Taffere et al., 2023). These criteria collectively ensure a comprehensive assessment of the strategic plan’s impact on patient care, operational efficiency, service utilization, and community involvement.
Planning For Ongoing Budget Management
The budget for the urgent care clinic is influenced by various factors, including organizational objectives, policies, and competition for funding. Organizational objectives, such as improving patient care or expanding services, can drive budget allocations. Policies, such as those related to staffing or procurement, can also impact the budget. Furthermore, competition for funding, particularly in the case of non-profit or publicly-funded clinics, can significantly affect the budget.
Limiting Staff Overtime
To limit staff overtime, effective scheduling practices will be implemented. This includes creating schedules well in advance, allowing staff to request time off, and ensuring shifts are covered (Abdalkareem et al., 2021). Also, workload balancing strategies will be used to ensure that no single staff member is overburdened, which can lead to overtime (Maghsoud et al., 2022).
Managing Non-Productive Time and Expenses
Non-productive time and expenses, such as education or paid time off to obtain certifications, will be managed by budgeting for these expenses at the beginning of the fiscal year. This includes setting aside funds for continuing education programs and certification courses. Moreover, policies will be implemented to ensure that staff utilize their paid time off in a way that minimizes disruption to clinic operations (Maghsoud et al., 2022).
Managing Ongoing Expenses
Ongoing expenses related to supplies and equipment will be managed through effective inventory management practices. This includes regularly monitoring inventory levels, establishing reorder points, and negotiating with suppliers for better pricing. Additionally, preventive maintenance schedules will be established for equipment to prolong their lifespan and reduce repair costs (Patel & Singhal, 2023).
Assumptions
The budget management approach is based on several assumptions. First, it assumes that the clinic has the necessary resources and capabilities to implement these strategies. Second, it assumes that the clinic operates in a stable economic environment, where drastic changes in funding or costs are unlikely. Lastly, it assumes that staff are willing to adhere to the policies and procedures put in place to manage costs.
Conclusion
A well-managed budget is crucial for the new urgent care clinic’s effective functioning and financial oversight. The strategic plan focuses on patient care, operational efficiency, service expansion, and community engagement. Success will be assessed through patient satisfaction, efficiency, service use, and community involvement. Ongoing budget management involves limiting staff overtime and effectively handling expenses related to supplies and equipment, based on certain assumptions about resource availability and staff compliance.
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