1. Planning, Organizing, Staffing
Budgetary Issues

2. Budget Projected plan Translates operational plan into expenses Types
Operating
Capital
Cash
Expense

3. Operating Budget Salaries Must include indirect and direct cost
40 to 90% of budget
Must include indirect and direct cost
Productive and nonproductive time
Data must be accurate and reliable
Should relate to strategic plan, mission, and philosophy

4. Budgeting Volume measure Cost measure
Based on standard measure such as acuity level, number of visits, HPPD
Cost measure
Salary figure such as average salary or wage

5. Planning and Budget: Management Responsibilities
Benchmarking figures
Nurse managers
Decide which budget to be tracked and analyzed
Communicate with management the trends
System in place to “capture” important data
1. Money
2. FTEs
3. Activity (workload measure)

6. Personnel Budgets Factors determining FTE positions Patient volume
Annual or monthly number of patient days
Average daily census

7. Patient Volume Average daily census Annual patient days for the unit
Depends upon last year’s statistics
Does not account for patient acuity
Annual patient days for the unit
Average daily census multiplied by the number of days in fiscal year
Can also be reported as an occupancy rate (if your bed capacity is 30 and your ADC is 20, your occupancy rate is 20/30 or 67%)

8. Patient Volume (cont.) May also use other measures
Number of admissions
Number of home visits
Number of procedures
May calculate according to diagnosis or other parameter (acuity level)
DRG 410 X #admissions X Length of Stay = #Patient days

9. Bed Capacity vs. Occupancy
Issues related to staffing
If you staff for the discrepancy, there may be issues with overtime and productivity
You must have budget for “float” staff
If trends of occupancy remains constant for 2-3 months, evaluate the need to increase FTEs

10. Direct Care Hours per Patient Day
Direct care refers to “hands on” care for 24 hours
Uses patient classification system (time studies, formulas, etc)
Determining FTEs
Nurse/patient ratios
Direct hours in FTEs

11. Direct Care Hours per Patient Day (cont.)
Direct hours in FTE
Determine the number of hours of direct care for your unit for total number of patient days in your unit for the year (annual patient days = ADC x number of days in fiscal year)
For example, 16 hours x 5475 patient days / number of hours of FTE (2080 in year) = # of FTEs (42.1)
Therefore, you would need 42.1 FTEs to provide 16 hours of direct care every day for the 5475 patient days

12. Weighted Census
Take your average daily census and place in an acuity system
Determine workload index by multiplying the acuity level by the census
Take the weighted census / census and you get the average work load index for the unit
WLI x hours in a day = hours of care per patient
Hours of care x census x days in year / hours of FTE (2080 in full year) = FTE

13. Number of Patient Days by Diagnosis
Determine patient days for each DRG
Determine the acuity hours for each diagnosis
Multiply the patient days x acuity hours for staff hours required
Total all staff hours required for each DRG and divide by the FTE (2080) = FTE

14. Replacement Time Positions
Must calculate to cover indirect care, nonproductive time (such as education, vacations, sick time, etc.).
May use a standard percentage, such as 10%.
May also calculate the average time for each nonproductive category and multiply x 8 (hour shift) and total. These hours x number of FTE /total FTE in year (2080) = number of FTEs needed for replacements.

15. Calculate Salaries Average Base Rate Job Classification Method
For each classification determine the salary for each employee and cost of replacement
Must also calculate specialty pay, merit, differentials, bonuses, overtime and supplemental staffing