Healthcare Organizations: Facility Planning Budget

Table of Contents

Introduction

Planning is a vital activity for any organization. Planning within organization sets the framework for decision making by establishing goal, strategies and objectives that relate to the operations of the organization. Budgetary planning for examples helps and organization achieves it long and short term goals. This paper reviews budgetary planning in relation to health care organizations. Budgetary planning is a constraint that is vital for the continuity of health care facilities.

Importance of Budgetary Planning

Budgeting planning is a vital activity in any organization. Healthcare organization must also participate in budget planning as an essential part of financial planning. Budget planning helps an organization plan for the future. This is possible through determination of whether the organization is running at profits or a loss. Ordinarily, health care organizations must be capable of sustaining their expenses. Budget planning in health care organizations also helps the facility determine the right direction that the facility can take in the future (Wolper, 2004). This is possible by determining the financial activities that are productive for the organization from those that have halted.

The economic crunch immensely affected health care industry as facilities suffered significant pressures from other health care organizations such as Medicare and Medicaid. The economic crunch also saw health care organizations experience lower revenue and reduced patient’s volumes. With strained resources, healthcare organizations had no alternative, but to engage in budget planning. Budget planning, in this scenario, helps health care organization to determine areas where funds are needed the most. The healthcare industry is delicate and regardless of financial constraints there is a need to uphold high quality standards. In times of financial distress planners in healthcare facilities distribute available finances equally. In other words, the budgetary planning guarantees that all participants in the facility participate in carrying the financial burden of the facility.

A facility budget planning helps healthcare organizations in strategic planning as it enables planners to look at different perspectives to ascertain control of finances in the healthcare facility. In a healthcare organization, there are no easy cuts to make and hence the need for budget planning. This ensures that health care facilities run at a steady course that enables it accomplish its overall objectives (Andrews, 2010). Financial planners look through the budgetary allocations of different departments within the organization to determine where cuts must be made. Budgetary planning thus ensures that areas of excessive costs are identified and trimmed.

Budgetary planning in healthcare organizations may be a difficult task, but it guarantees that health care organization makes the right choices in terms of financial allocation. Without budgetary planning, a facility may allocate a lot of funds in one area and fail to allocate adequate funds in another area. Budgetary planning also ensures that planners look into the future expectation of the organization. With the increased use of technology, for instance, planners in health care organization need to review whether the healthcare facility intends to adopt any technologies. If so, the planner should ensure that there are funds available to adopt the new change into the facility.

Budgetary planning in health care organization is also vital to enhance transparency across the different department in the organization. Planners undertake budgetary planning to determine the expense versus the income of a facility. This is compared against the budgetary allocations from the previous financial period. Transparency in the facility enables planners to have an actual glimpse of the financial position of the organization hence make financially savvy decisions (Wolper, 2004). Budgetary planning is also vital for self estimation. Self estimation is the process where a health care facility determines its financial position. This enable the organization determine the net finances it has. The task of allocation of funds becomes easy by determining the net financial position of the organization. Budget planning also enables planners determine how to allocate funds for investments in relation to the organization’s agenda and direction in the future.

Budget planning in a healthcare organization is also vital in determining the number of human resource that an organization can hire. Organizations must be able to manage their expenses, which includes the ability to pay their employees as agreed. Budgetary planning enables the facility determine its financial capability in terms of the number of employees it can add to their workforce (Andrews, 2010). Adequate funds mean that there is room to increase the number of employees hence minimize work overload. Adequate funds also mean that the healthcare organization will manage to train the hired employees if the need arises.

Conclusion

Organizations plan their budgets so as to determine their future. In healthcare organizations, budgetary planning helps organizations remain focused on their overall goal i.e. provide optimal services to customers. Budgetary planning helps organizations establish a clear direction regarding the services that it can offer. It is vital that organization determine which tasks should be accorded first priority and which can wait. In health care organizations, the first priority is with the customers hence the need to make budgetary plans that enhance the services related to the consumers. The health care organization must align its overall objectives with it financial capabilities ensuring that it effectively renders its services

Reference

Andrews, J. (2010). Budget planning has become a year-round process. Retrieved from http://www.provationmedical.com/Common/PDF/budget-planning-has-become-a-year-round-process.pdf

Wolper, L. (2004). Health care administration: planning, implementing and managing. Jones & Bartlett learning

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