Academic journal article Research in Healthcare Financial Management

A Comparative Analysis of the Budget-Related Activities Used in the Evaluation of Clinical Nurse Managers, Clinical Supervisors and Nurse Executives

Academic journal article Research in Healthcare Financial Management

A Comparative Analysis of the Budget-Related Activities Used in the Evaluation of Clinical Nurse Managers, Clinical Supervisors and Nurse Executives

Article excerpt

Historically, nurse managers have been evaluated primarily on intangibles such as dedication, caring and a sense of responsibility in giving service. With the advent of healthcare reform, increased emphasis within the healthcare industry on fiscal management has changed the scope of nurse managers' practice. Nurse managers, often involved in managing direct and indirect patient care, have had to adapt to these changes by developing new management skills. Driven by integrated delivery systems, organizational changes related to managed care and capitation require the nurse manager to improve efficiency and control healthcare costs (Schmidt 1999).

Performance evaluations are used by organizations to measure and evaluate productivity. Productivity is evaluated as the ability to effectively use both capital resources and human resources as they relate to an organization's mission. Evaluations are based upon a comparison of the individual's accomplishments with previously determined goals (Fletcher 2000; Kulbok 1999). Business schools prepare their graduates for understanding the process of performance appraisal or evaluation. However, practicing nurses who later become healthcare managers often have far less preparation in understanding the performance evaluation process.

The expectation that nurse managers will be proficient in fiscal management suggests that budgeting behaviors will be reflected in their evaluation. Because the roles and responsibilities of various types of nurse managers have changed to include increasing fiscal responsibility over the past several years, the appraisal process should reflect these changes as well. Therefore, the purpose of this study was to analyze the extent to which various nurse manager groups perceive performance evaluation as inclusive of financial management expectations in light of their participation in actual budget behaviors.

NURSE MANAGERS AS FISCAL GATEKEEPERS

Nurse managers, through the systematic planning and management of budgets at the unit level, link resources and strategy. Because nurse managers, at all levels, are a vital link between financial/managerial accounting departments and controllable costs, they have a profound effect on the productivity of the organization through their management skills. For example, to be successful, nurse managers must be familiar with and understand the importance of budget variance information on labor, materials and overhead. They appreciate the need to use various accounting reports to plan and control budgets. Financial management requires the ability to understand cost determination, activity forecasting, internal benchmarking, functional cost center budgeting, performance reporting on a product level, workforce composition and labor cost, and performance reporting on a functional level (Finkler & Kovner 2000; McDermott et al. 2000; Schmidt 1999). The ability to manage financial and operational standards is a critical link in the organization's capacity to remain fiscally viable.

Several levels of nursing management have developed over the last few years. Titles, as well as roles and responsibilities, vary widely across organizations. The functions of first-line managers are to plan, organize, oversee and control direct patient care. Increasingly, managers are responsible for services or product-lines across more than one unit, program, or department. Ultimately, they have 24-hour responsibility for adequate staffing and cost effective, quality patient care. Clinical nurse managers plan operating budgets. In addition they must analyze and control revenue and costs associated with services provided, personnel, materials and equipment. Since nursing labor budgets can account for a large proportion of the total expenses, there is significant pressure to increase efficiency and effectiveness. Nurse executives, commonly referred to as directors of nurses or chief nurse officers/executives, have 24-hour responsibility for the entire organizations delivery of healthcare, Increasingly, they manage ancillary departments as well. …

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