Question 1
The first incisive and informative point that was utterly important in promoting an in-depth understanding of budget variance is the assertion that a budget variance is a fundamental tool that can allow a health care institution to control its operating costs while sustaining acceptable qualities of care and efficacy. The point is presented on page 500 of the text authored by Dunham-Taylor and Pinczuk (2014).
The concept of variance analysis presented by Dunham-Taylor and Pinczuk (2014, p.513), fosters the understanding of the concept of budget variance by positing that variance analysis is an integral tool that promotes understanding of the operational performance of a health care organization. In this regard, variance analysis allows a manager to understand and pinpoint the cause of a budgetary deficit and promote the formulation of practical solutions.
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Question 2
In scenario 1, it is apparent that the monthly expenditure incurred on supplies and salaries exceeded the budgeted amount, hence creating a budget deficit or a variance (Connor, 2015). The surge in the expenses directed towards purchasing supplies and paying salaries emanated from a potentially debilitating communicable disease that broke out in the areas, increasing the patient population and more extended working hours for medical practitioners.
As a department leader, I will strive to curb the budget variance by reducing the working hours for medical practitioners, ensuring shift allocation is reviewed, and hiring additional personnel. The decision to hire additional persons is based on the fact that burnout due to long working hours could compromise the quality of medical services delivered to the patient population (Walsh, 2016). Also, the budget deficit can be financed in the coming month through soliciting for government subsidies to reduce the financial burden of the increasing patient population on the organization’s finances.
Given that reducing salaries is not an option since it acts as an incentive that motivated nurses and doctors to work harder, it is imperative that other approaches such as government subsidization of the treatment regimes be explored to sustain the quality of services.
References
Connor, E. (2015). Healthcare Finance and Financial Management: Essentials for Advanced Practice Nurses and Interdisciplinary Care Teams. Journal of the Medical Library Association: JMLA , 103 (2), 111.
Dunham-Taylor, J., & Pinczuk, J. Z. (2014). Financial Management for Nurse Managers-Merging the Heart with the Dollar . Jones & Bartlett Publishers.
Walsh, K. (2016). Managing a budget in healthcare professional education. Annals of medical and health sciences research , 6 (2), 71.
