Introduction
The management control of a health care department is a challenging task. It includes planning and programming, budgeting as creating a financial plan based on the estimation of revenues and costs, and accounting as the process of documenting any financial decisions (Cleverley & Cleverley, 2018). A cardiac intensive care unit is a ward specializing in providing care to patients with severe cardiovascular issues. Therefore, it is crucial for managers of such units to carefully plan the annual budget to ensure that all the needs of the department are accounted for, and all the patients receive high-quality care. This essay will consider the steps that I, as a cardiac intensive care unit manager, would take when planning the annual budget.
Areas and Reports to Review
Prior to submitting the request for the departmental and capital budgets, it is crucial to review the income statements of the unit and analyze the profits and losses of the department. The financial viability of any health care organization depends on the revenue provided by patients, including self-payers and clients covered by third parties, and nonpatients, such as grants, contributors, and tax support (Cleverley & Cleverley, 2018). Therefore, as a manager, I will review the income and cash flow statements to understand who the primary provider of funds for the unit is. In addition, I will examine the cost reports from the previous fiscal year to understand what proportion of the income is spent on salaries and benefits, medical supplies and medication, insurance, and professional fees. Furthermore, I will analyze the balance sheets and statement of equity to understand why the net assets of the department changed at the end of the fiscal year compared to the beginning of the year (Nowicki, 2018). Overall, these reports will help me to understand the needs of the department and what requests should be made.
Thus, I will review the following areas when preparing the requests: the most significant expense for the department and the leading provider of revenue. As the unit census is declining while the staffing ratios remain high, I will evaluate the causes of the declining number of patients. Furthermore, it is important to consider the durable equipment owned by the department and non-durable medical products that need replacing and replenishing regularly. I will evaluate whether any equipment should be replaced and estimate whether the replacement will add value to the department. In addition, I will consult with the department employees to determine whether new equipment is needed and carry out a cost-benefit analysis.
Departmental and Capital Budget Requests
The departmental and capital budget requests will be based on the departments’ needs and all the considered financial statements. The submission for the departmental budget will account for the projected operating costs, including salaries, benefits, and medical supplies. If it is discovered that the department requires new equipment, such as ventilators, hospital beds, and intensive care patient bedside monitors, they will be considered a capital project. Therefore, the request for the capital budget will include the cost of the equipment needed as well as the operating costs associated with the beginning and continuation of the project (Cleverley & Cleverley, 2018). Thus, the costs, insurance, installation, and maintenance fees will be accounted for in the capital budget request.
Conclusion
Before the annual budget proposal for any health care department can be submitted, it is critical to evaluate the unit’s performance in the previous fiscal year and establish its primary sources of revenue and expenses. I will support the departmental and capital budget requests for the cardiac intensive care unit by the income, cash flow, and costs statements, balance sheets, and statements of equity. Moreover, I will consider what capital projects will add value to the department and propose investing in them to increase the overall department revenue.
References
Cleverley, W. O., & Cleverley, J. O. (2018). Essentials of health care finance (8th ed.). Jones & Bartlett Learning.
Nowicki, M. (2018). Introduction to the financial management of healthcare organizations. Hap/Aupha Health Administration Press.