NURS FPX 6216 assessment 2 Preparing and Managing an Operating Budget

NURS FPX 6216 assessment 2 Preparing and Managing an Operating Budget

Preparing and Managing an Operating Budget

Operating budgets are necessary for healthcare institutions to establish an annual budget statement. The personnel resources regarding care delivery including a particular area are described in a budgeting process (Alexander, 2018). The creation of the overall strategy is a continuous procedure involving input from administrators, accounting groups, and existing department metrics. The budget’s most important component is the data-gathering process. Several essential components make up the data-collecting portion. The first initial component is the programs or incentives available within the department, and the ideal asset would be a nurse administrator (Alexander, 2018). Another key element is the unit’s caseload, which measures the severity of the patient’s care and is determined by the accounts department as a natural result of incentive payments. 

NURS FPX 6216 assessment 2 Preparing and Managing an Operating Budget

The final key component is the consumer, which represents the individual whose target audience of the population served are those under 60 who have healthcare coverage, which often offers better compensation with less time in hospital, while those over 60 have a Medicare supplement, which does the opposite and has extended stays but lower payments from insurance company (Alexander, 2018).  The basis of this report is to provide an overview of the 35-bed unit with a census of patients from an older population (Capella University, n.d.). The operating budget’s components will account for an entire fiscal years’ worth of inpatient revenue, which represents the hospital’s yearly income that is often divided into departments. The operating budget will consist of staff salaries, office supplies, incentives such as overtime wages, medical equipment, and other items needed for compliance (Joseph, 2020). 

The operational budget will indicate the differences between the current and anticipated total. Variations must be acknowledged and are often necessary (Alexander, 2018). The objective is to create a budget that is as feasible while earnings outweigh spending, which is why past performance will be useful. The maximum utilization of the previous period is used to compile the trend analysis (Joseph, 2020). 

Budget Creation

With the St. Anthony’s Medical Center’s overall financial evaluation, the 35-bed floor will be reflected in the budget development. The department now has 20 full-time nurses, but there are open vacancies due to recent nurse departures. Due to the nursing shortage, the desire for employees to work additional hours results in excessive costs to appropriately employ the department (Capella University, n.d.). 

The proposed budget should include 23 full-time nurses and a maximum of 26 with 3-6 extra nurses, each nurse will increase the cost by $84,030 according to the salary of Minnesota nurses (Minnesota Nurses Association, n.d.). According to the U.S. Bureau of Labor Statistics, benefits account for 29.6% of the average cost per registered nurse or $11.96 per hour. The remaining 70.4% ($28.44) goes toward wages, for a total cost of $40.40 per hour (U.S. Bureau of Labor Statistics, 2022). The average nurse-to-patient ratio should be 1:5 with at least 7 nurses scheduled (U.S. Bureau of Labor Statistics, 2022). Each day will be allotted for call-ins in which the extra staff would be notified. To ensure that proper staffing is acknowledged, the nurses are able to work half shifts or split a shift to reduce burnout. There will also be at least 3 PRN nurse positions that do not require benefits and can cover when other staff members are away. The nurse manager can decide on a daily basis the staffing needs and coordinate with the staffing department if extra nurses are needed. On weekends and holidays, the nurse-to-patient ratios can increase to 1:6, and offering time and a half plus base rate to staff going over their hourly commitment of 36 hours. 

NURS FPX 6216 assessment 2 Preparing and Managing an Operating Budget

To also ensure that the budget is allocated correctly, the nurse manager must make sure the expenses are within range and kept at a minimum. All patient charges should reflect inventory and length of stay. There should be supplies accounted for and charged accordingly. For example, other departments such as environmental services or respiratory should use their department code to charge services used for inpatient visits. That would ensure the budget stays within range for that department. The budget would benefit greatly from decreasing by 3.5%. Below you will find the proposed budget for the FY (Fiscal Year) 2023.

Table 1 (Capella University, n.d.)


SAMC 35-bed unit Budget for FY 2023


FY 2022

FY 2022

FY 2022

FY 2023





Operating Revenue






Inpatient Revenue






Total Patient Services Revenue







Operating Expenses


Salaries and Wages






Employee Benefits






Professional Fees












Purchased Services- Utilities






Purchased Services-other












License and Taxes






Other Direct Expenses






Total Operating Expenses






Net Revenue or (Expense)







Strategic Plan

The goal of most healthcare services is to promote healthy lifestyles by acting as a stabilizing force (Joseph, 2020). The support rendered by healthcare professionals on the unit is reflected in the clinical outcomes and feedback evaluations such as HCAHPS or Press Ganey. Positive clinical experiences including reduced inpatient hospitalizations are associated with adequate staffing (Joseph, 2020). 

With the low funding, it is possible that the senior management would become hesitant to raise the spending estimates. The data on adequate nurse-patient ratios will maximize compensation and minimize injury that may result in near-miss events and avoid expenses not patient related. The addition of nurses like previously stated, would ultimately share the patient’s responsibility fairly and reduce burnout, instability, and overtime. To guarantee patient compliance and awareness, the nurse leader should make sure the unit is equipped with safety measures for each individual patient (Rundio, 2022). 

Ongoing Budget Plan

The ongoing proposed budget will be discussed quarterly with the unit administrator and nurse manager to look through costs and count the number of variations. The bulk of the total funding goes toward the nursing portion of the unit.  The organization’s financial health is impacted by nursing turnover/retention (Shao et al., 2018). It requires both work and resources to hire proficient new nurses. To ensure the organization is in compliance, the nurse manager or unit’s director must have a strategic plan in place to reduce the nurse turnover rate (Shao et al., 2018). 

NURS FPX 6216 assessment 2 Preparing and Managing an Operating Budget

By doing so the following steps should be implemented. The first and most important is ensuring adequate nurse-to-patient ratios. When hospitals are short-staffed, patients miss quality care from an experienced healthcare professional. Healthcare executives should understand the inadequate impact staffing has on patient care (Rundio, 2022). Next, the nurse leader would need to choose an effective preceptor. It’s important for nurse leaders to wisely choose the preceptor for their new nurses as it’s an effective strategy for nurse retention during their first year. An effective preceptor helps support the new nurse by providing collaboration, constructive feedback, emotional support & modeling professional behaviors nurse leaders want to see at the bedside (Rundio, 2022). Additionally, by improving the onboarding process, nurses can get all their questions answered and get all the necessary information and expectations on how to do their jobs correctly and to the best of their ability. When given proper information, nurses will feel empowered about completing their job duties and won’t be confused. 

The root of many issues regarding nurse burnout is the long hours, excessive work-related duties, and influx of patients per nurse. To find out what the nursing staff wants from their job responsibilities, administrators and nursing managers should consult with the nursing staff (Rundio, 2022). As many new nurses earn sign-on bonuses when they accept the role, current nurses have experienced increases in salaries and bonuses. Hospitals can lower turnover rates by offering incentives to nurses who work overtime or take on additional tasks. Lastly, the nurse manager should establish lines of communication. Open communication between nurses and their nurse administrators can significantly improve the attitude of the hospital staff as a whole. It is important to encourage nurses to talk to administrators and supervisors about their feelings of burnout and being overwhelmed. Moreover, open communication will lessen stress and disagreement among healthcare staff (Rundio, 2022). Get free NURS FPX 6216 assessment 2 Preparing and Managing an Operating Budget .

The budget requires minor changes and monitoring daily and should be adjusted to fit the need for that day. Many efforts are based on collaboration with the interdisciplinary team while maintaining the culture and safety of the patient (Shao et al., 2018). 


Developing an operating budget helps to know where the unit and organization stand on patient safety and reducing nurse retention/turnover. The budget should also include the allotted amount for supplies, equipment, or other direct patient care needs. The nurse manager should be the spokesperson for all departmental needs alongside the unit administrator (Rundio, 2022). The needs of the department should always coincide with the institution’s mission and vision statement. Patient outcomes should be the top priority when creating an operating budget.


Alexander, J. (2018). Financial planning and analysis and performance management

Capella University, (n.d.). Vila Health: Developing an operating budget. sso=true

Joseph, D. D. (2020). Hospital budgets and maximizing staff efficiency.

Minnesota Nurses Association, (n.d.). RN salaries and benefits.

Rundio, A. (2021;2022;). The nurse manager’s guide to budgeting and finance (3rd ed.). Sigma Theta Tau International.

Shao, J., Tang, L., Wang, X., Qiu, R., Zhang, Y., Jia, Y., Ma, Y., & Ye, Z. (2018). Nursing work environment, value congruence and their relationships with nurses’ work outcomes. Journal of Nursing Management, 26(8), 1091- 1099.

U.S. Bureau of Labor Statistics, (2022). Overview of BLS Statistics on Pay and Benefits. Retrieved from:


Struggling With Your Paper?
Get in Touch