Managing Nursing Finances
The year 2020 has come as a great surprise to people all around the world. With Covid19 making headlines and spreading like fire, the one occupation that has seen a rise in work pressure is nursing. They have had a busy year looking after infected people and helping them recover. These are the heroes who have stood along with the patients to bring their health and fitness back. However, this isn’t all nurses have done over the year. Some have had their duties remain the same from before but in the end, they have been taking care of people only.
Different Types of Nurses
With a different field of specialization for the numerous kinds of nurses, they treat their patients accordingly. In this profession, you will find a caretaker for every illness that you ever head, be it physical or mental. Here, we take you through all of them.
Registered Nurses (RN) give the patients all the care and attention they require to heal from their physical and mental wounds. They provide healthcare services that include educating people on the different types of healthcare conditions along with giving them advice and mental support in intense situations. These registered nurses work in teams with their fellow physicians and specialists. Also, registered nurses are highly qualified and once they reach the point of being enough certified, it is their call to choose what kind of RN they want to become.
The top-most cause of death in the world is cardiac arrest. This heart disease could be fatal if it is not checked promptly. And so, the professionals who look after this illness are cardiac nurses. The nurses in this profession help with angioplasty, pacemaker surgery, bypass, and more. With the increasing need for cardiac surgeries, this profession has been in huge demand.
Family Nurse Practitioner
These professional healthcare workers are specialized to work with all ages and genders. Whether it is a 65-year-old woman or a teenager, a family nurse practitioner (FNP) will have a treatment for all. The basic functions of such a nurse involve running diagnosis, providing treatment for illnesses, filling physical exams, and prescribing medicines.
Mental Health Nurse
As the name suggests, mental health nurses work to enhance the emotional well-being of their patients. They specialize in treating mental illnesses by diagnosing them and finding a cure accordingly. They provide counseling services to the people seeking help due to facing mental challenges that are carrying adverse effects on their mental health. Nurses are well-aware of the fact that if these problems worsen, they could cause huge damage in the long term.
Public Health Nurse
These kinds of nurses work for the general public while supporting and teaching them the significance of health. They educate communities to look after their health and stay alert for all kinds of symptoms. Further, their main task is to inform societies of all the risks and benefits of healthcare along with the necessary preventions of certain diseases as well.
Just like any other sector in an economy, nursing faces great challenges every day as well. These challenges bring the quality of services down and add to the difficulties of these sectors. Here are the main problems.
- The staffing problems stand at the top as it causes great inconvenience to the existing employees and to the patients who have to wait for hours to get their treatments
- Patients’ safety, while they’re working, is another issue in the industry as keeping them secured from all kinds of infected tools, expired medicines, inappropriate treatments is necessary
- Finance management of the healthcare sectors is still a question mark as it involves proper time and resources injected in it
The Financial Concerns of Nurses
Being knowledgeable in all the relevant fields is important for nurses. All nurse managers, administrators, and leaders require more than just clinical care. As the profits start depending more on the value and quality of service, the healthcare entities have to look for more ways to manage their finances well enough. And so, here are the major factors that need serious consideration while doing so.
Knowing the Financial Fundamentals
Numerous nurses in the industry have some understanding of general finance in healthcare, managing it is in the hands of the top management, board members, and executives. However, the trend of revenue generation heavily embarking on the patient’s satisfaction level and quality scores is growing. Due to this, the nurse leaders are digging deep into exploring finance as well.
Also, the nurse administrators have a lot to manage including the patients’ and employees’ safety and satisfaction along with the staffing issues and budgeting. There was a time when all this knowledge only came from on-the-job training. However, with the changing times, online MSN is doing quite the job as they make the administration’s job easier by incorporating financial management coursework in the practices. This is to confirm that the nurses seeking leadership roles have the required skills beforehand.
The nurse administrators are responsible for creating the annual operating budget for their departments and making the necessary adjustments in it throughout the year. The first step in this program requires determining the revenues of the relevant department along with its costing structure and the stock of medicines they use. Also, the staffing expenses that particular department has will form part of the necessary details. The most major part of this process will be guaranteeing the accuracy of that information to enhance resource allocation in the future.
Preparing For Adjustments
The two main players in the estimation of revenue and expenses are the payer mix and market share. It is these factors that affect the cash flow greatly. The market share relates to the number of admissions or to the number of particular processes completed in comparison to the competitors in the exact area.
Secondly, the payer mix looks after the evaluation of percentages and those kinds of insurances that give payments for patient care. The payments are different for every payer contract, and so it’s highly like for revenues to fluctuate markedly. The nurse managers assess these predicted fluctuations and work to prevent any shortcomings in the budget.
Staffing and Value
The operating budgets and more factors involved in its making play a major role in forecasting the staffing needs. On analyzing the major variances in the budget, for instance, a rise in unit admissions, the nurse administrators have to make the necessary changes in the staffing. Doing so makes sure that staffing is appropriate enough to meet the patient’s needs. This will further lead to the patients’ satisfaction levels and quality scores rising. As a result, the revenues will rise.
Value and Quality-Based Payments
As payers have started to shift towards the value-based payment system, the quality framework has become even more important to organizations’ earnings. Large organizations like Medicare have established a system distributing 90% of their payments based on the quality and value of work.
This has resulted in the nurses working harder to achieve that benchmark of supreme performance and productivity. The nurse leaders are now providing better service while using the most cost-friendly allocation of resources. This is how applying financial management has simplified these processes.
Why is it necessary for nurses to know finance?
Having knowledge of financial management is key for even the nurse managers and executives. Gone are the times when the nursing staff looked after medicines and healthcare only. Have a look at the reasons why.
- It helps manage the service line and department they are responsible for
- It comes in handy for nurse managers and executives as they comprehend the organizational structure
- It creates relevance between the structure of the organization and its revenue and cost streams
- It establishes a connection between nursing and the financial resources of an organization
- It allows for the management and executives to get a better understanding of the business side of health
- It makes evaluation of service effective by assessing the cost, quality, and financial issues
The Financing Dynamics
It is vital for nurses to know the basics of financial management as it affects their decision making for devising policies and procedures in healthcare. Go through the financial specifics of the nursing sector to have the latest insights into the industry.
Healthcare costs are rising substantially
In the last decade or so, the healthcare placement agency costs have risen to a massive level. In the US, healthcare costs have been on the highest side amongst other countries. One reason why this is so is that Americans can’t afford insurance or they don’t qualify for it. The worldwide nursing costs are, too, on a high because of the falling quality of health and more people seeking medical care.
Hospitals Are Making Substantial Money
The amount being spent on healthcare every year surpasses all other facilities you can think of. Hospital care has become one of the busiest sectors in the world as it is leading the spending category stats by a marked margin.
Modifying the Reimbursement System
Previously, the reimbursement system made use of the delivery model of the payment for service delivery. However, a change in the model now sees an introduction of the pay for performance model. It is now the most preferred option as it allows to reward the high-performing providers and hospitals for the results they are producing.
On the other hand, this method allows for penalizing those who fall lower than 10%. The focus here is on quality as a common belief in this sector is that better outcomes earn more rewards. The hospitals that are able to eliminate the ‘Never Events’ earn more than those who have a high familiarity with it. These are the events that are avoidable if the right preventative measures are taken and the patient handling is managed cautiously.
Focusing To Keep the Patients Away From Hospitals
Certain laws of different countries keep a check on the patients’ health and hospital visits. And so, working to enhance people’s healthcare is the main agenda. For this, the focus has now shifted to keeping the patients out of hospitals. The main patients being under consideration are those who have gone through Heart Failure, Pneumonia, and Acute Myocardial Infarction.
This change is likely to modify reimbursement processes and transform healthcare greatly. The fact that hospitals are purchasing physician practices and other outpatient services hints at this change and makes keeping people away from hospitals easier. The most recent prediction states that by the end of this decade, there will be a drop of 20-30% in hospital beds.
What Does Financial Management Of Nurse Include?
There is a dire need for the nurses to update themselves with financial management information and it is rising need explains exactly why. To be more specific, here are a few areas that require the nurses’ attention and research.
- Introduction to financial management in hospitals
- Basic accounting structures
- Hospital accounting fundamentals
- Financial statements basics
- Analyzing and comprehending financial statements
- Applying financial management in hospitals
- Capital financing of hospitals
How to Improve Financial Management in Hospitals
Getting the staff familiar with financial management in hospitals is not a common practice in the industry. However, the need to do so has been rising substantially and there are multiple ways how this can be done. Improving the hospital infrastructure and employing more off all-around staff who are knowledgeable with finance will help greatly. Also, establishing a proper system and training the personnel on financial management will do wonders for the industry.
The Bottom Line
Financial management for nurses today is as important as it is for any other sector of the industry. It has gone from being the purview of hospital staff and executives to a major function of the operations. Hence, nurse managers are now realizing the importance of having financial management knowledge. It has become necessary for them to align their goals and financial resources with the units’ responsibilities to achieve the optimum outcome.