Leadership and Management
Module 6 – Fiscal Planning and Management Case Study
Instructions: Read the following budgeting and financial planning scenario and answer the related question with complete sentences supported by references as indicated. Cite references according to APA Guidelines. Submit your assignment with a cover sheet.
Veronica Hernandez has been a registered nurse for nearly four years. She completed her BSN degree in December 2019 and relocated to Little Town, Texas to accept a position as nurse manage at a rural critical access hospital that also provides home health services. Her scope of responsibility includes managing the 15-bed medical-surgical unit in the hospital; and, managing the hospital’s home health agency.
After four (4) months in her new role, Veronica began to feel the medical-surgical unit was “running well”. The unit’s HCAHPS scores had improved; and, the quality and safety indicators were better than they have been in several years. However, since the pandemic, the unit has had ongoing staffing challenges, particularly in the turnover of experienced RNs. The RN turnover for fiscal year 2022 was 33%. It has been very difficult to recruit RNs, especially experienced RNs to backfill the vacancies. While Veronica has not hired LVNs, the HR recruiter told her several tenured LVNs that worked in the perioperative area had inquired about possible positions on the medical-surgical unit. Thankfully, the Patient Care Technician (PCT) staff has been more stable. The 2022 turnover for PCTs on the medical-surgical unit was less than 1%.
There is still good news about Veronica’s situation. The Home Health Agency has expanded its service area since Veronica’s arrival. The CNO frequently gives Veronica positive feedback on her performance and until the turnover became an issue, the staff were committed to her vision of providing excellent care for every patient regardless of whether the patient is being treated on the med-surg unit or receiving home health services.
In December, Veronica realized the hospital budget cycle would being in January and that she was inadequately prepared to perform this high-stakes manager function to the dree she needs to in order to be best positioned to influence the budget needs for her areas of responsibility. Her head started to spin when she attended the hospital leadership Budget Preparation Meeting. She was unsure of the meaning of terms and abbreviations like: Personnel Budget, Operating Budget, Capital Budget, HPPD, Indirect costs, Productive hours, Controllable cost, Direct Costs, variable costs, and more.
Veronica is thankful she will be able to get assistance from the Director of Finance in developing the Personnel, Operating, and Capital Budgets for the separate Medical Surgical Unit budget and the budget for the home health agency.
Question 1 –
Veronica wants to be prepared for her first meeting with the Director of Finance. For each of the three types of budgets (Personnel, Operating, and Capital) describe at least two (2) important baseline data Veronica should know about the respective budget types; and/or relevant question(s) about each budget type, she should be prepared to ask during her meeting with the Director of Finance.
|Areas of Responsibility
|Personnel Budget Baseline Data or Questions
|Operating Budget Baseline Data or Questions
|Capital Budget Baseline Data or Questions
|Home Health Agency
Question 2 –
While preparing for her meeting with the Director of Finance, Veronica was concerned when she discovers the medical-surgical Personnel Budget was likely to end the current fiscal year with a 7% salary variance (more expense in this budget category than budgeted). She immediately sat down to reflect on how the staffing challenges may have contributed to this situation. Describe three reasons/situations that may have contributed to this salary variance.
Question 3 –
What are two actions Veronica should consider implementing immediately in order to monitor for personnel variances going forward?
While reviewing the home health agency’s current year’s budget, Veronica identified variances in the Personnel and Operating Budgets. She met with the Home Health Supervisor and learned that these variances occurred because two of the patients receiving services were elderly; lived alone; and had little understanding of their disease and how to manage their care. Based on the supervisor’s description of the level of care these patients were receiving, Veronica calculated that the full cost of each visit for these patient’s was about $210 which was more than the $90 per visit the hospital was being paid by the governmental insurance.
Question 4 –
The home health agency provides two visits per week for each of these patients.
4a. What is the financial impact to the Home Health Agency’s budget for providing this level of care for these two patients for 12 months (52 weeks) based on current full costs and the current governmental reimbursement? (This is a math calculation problem. It’s intended to show how what a small to moderate amount of expense can have an adverse impact on the overall budget and to the hospital’s bottom line.)
Veronica needs to be prepared to discuss the Home Health Agency’s variance with the Director of Finance.
4b. What are two potential actions Veronica can discuss with the supervisor that could make each visit less costly while still meeting the needs of these patients?
Question 5 –
Veronica knows she needs to have a plan to address the staffing situation on the medical-surgical unit. She is very concerned about adding to staff burnout as a result of prolonged use of overtime and not having enough staff. Veronica is also well aware of the budgetary implications of excessive use of travelers. She also knows that putting novice nurses into situations for which they are unprepared comes with many challenges as well. Vernonia knows these tactics can have an adverse impact on patient quality and patient and staff satisfaction.
Veronica believes she and her team may need to consider whether to continue trying to make the legacy patient care delivery system work. She believes the time is right to explore a different patient care delivery system. There are significant financial implications associated with this situation as well. Veronica needs a plan in order to be prepared to discuss it with her Director and the Director of Finance.
Which one of the following patient care delivery systems would you recommend that Veronica consider in response to the ongoing staffing challenges on the medical-surgical unit? Explain your answer and include at least one reference to support your response.
- Functional Method
- Maintain total patient care delivery
- Team Nursing
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