The holidays are a time for indulging and even being a bit gluttonous. For many healthcare organizations, the season also marks the start of the fiscal year-end. While it is difficult not to be pre-occupied with the party-planning, dinner menus, present-buying, and the other personal distractions that come with this time of year, hospital leaders need to be diligent and focused on ensuring that their organizations are poised to successfully meet the demands of 2020! The most significant part of this preparation is a well-planned budget. A disproportionate or “overstuffed” budget can lead to an array of challenges, both operational and financial, that can leave a lasting impact.
Whether your hospital or health system runs on a calendar year business cycle or not, it is critical to have a comprehensive and effective budget process in place, to achieve the appropriate staff/volume alignment in all areas. Too often, budget development is seen as a way for management to “fatten” up their staffing allotment for the coming year based on current practices or what-if scenarios and not on future state. Without relying on the proper data to justify or substantiate the budget, organizations often find themselves unbalanced. Resources are not correctly allocated, and the bottom line is negatively affected by unnecessary personnel expenses.
A successful budget process includes the active participation of all department leaders, not just the Finance team or hospital executives. Collaboration is key to assessing relevant aspects of all operations and accurately factoring them into the projected staffing needs for the entire organization. Historical volume trends and forecasted changes also need to be taken into consideration so that any “fixed” budget numbers are based on variable elements. The budget should not be viewed as a once-a-year event, but rather an ongoing process. Performance against the existing budget should be routinely evaluated and consistently tracked. A productivity system that provides realistic operating targets and measures performance against variable volume metrics is the perfect budget compliment.
ALTIUS offers a variety of performance improvement and workforce optimization solutions that go hand-in-hand with building a balanced budget. To learn more about how our team can support your organization in establishing an effective process, reach out to ALTIUS today!