Over the course of 20 years, a nursing facility has grown from 60 beds to 120 beds and has more than doubled its staff and square footage. New departments, such as physical therapy, on-site imaging, recreation, and other support services have been added.  The growth and success of the facility is in no small part due to the capable leadership and determination of its administrator, Ms. Horowitz. From the beginning, Ms. Horowitz has been involved in every aspect of the facility, particularly in planning and budgeting.  Because she knows the facility so well, she has always established the annual budget herself, with little input from her staff. In recent years, however, the director of nursing and the managers of other departments have grown frustrated by their lack of opportunity to give input regarding the budget. Moreover, Ms. Horowitz has become increasingly out of touch with the latest technological advances in long-term care and reluctant to commit capital to updating the equipment they have. The director of nursing is concerned that this failure to adapt will soon render the facility less competitive and in danger of losing potential residents to more progressive facilities in the area.

  1. What approach to budgeting does Ms. Horowitz take?  What are the strengths and weaknesses of this approach?
  2. How have changes in the nursing facility affected Ms. Horowitz’s ability to plan and budget effectively on her own?
  3. If you were the director of nursing, what recommendations would you make to Ms. Horowitz regarding the planning and budgeting process?

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