Nurses are a key part of a hospital's revenue cycle, yet their input usually isn't sought during the development of organizational business plans, experts said Tuesday at ANI 2008, the annual conference of the Healthcare Financial Management Association.
That oversight will likely change in the near future, however, as hospitals face increasing costs in coming years and need to make their organizations as efficient as possible.
"You have to involve all parties in strategic financial planning," said Susan Sanders, associate vice president for patient services at QHR Consulting in Nashville, Tenn. "Sharing information between the nursing staff and finance can be a big improvement in the creation of annual budgets and business plans."
Nurses often feel "caught in the middle" in the financial tug of war between the hospital administration, physicians, and the needs of patients and families, said Sanders. But most nurses, even those in leadership positions, don't have the advanced management or financial training that could help a hospital's finance team during the budgeting process. Sanders said it was important for chief financial officers to help educate nurses and bring them into the decision-making process.
"Nurses can be a great help to you in developing new product lines or offering new services," Sanders told her audience of CFOs. "Nurses know vendors as well as their clinical colleagues in other local hospitals. They're great resources for market research."
Samuel Brown, vice president of financial services at Jennie Stuart Medical Center in Hopkinsville, Ky., said it is important that nursing managers understand the impact of overall hospital profitability. In most cases, he said, chief nursing officers are unaware of the importance of a hospital's liquidity position, and CFOs should make nurses aware that "profitability is everyone's problem."
"Nursing managers may not have much budgeting experience, but they can still be helpful in developing realistic budgets," said Brown. "Nurse leaders need to know who makes decisions on purchasing hospital-wide. The CFO has to educate nurses on all aspects of capital budgets and must explain the impact of something like ROI."
In order to get nurses more involved in issues related to hospital finance, CFOs should develop a process for nursing input, said Sanders. She recommended that hospitals develop a "patient throughput team" as well as include nurses in discussions about reducing supply costs. CFOs also need to invest money into leadership education for nurses in order to help manage nurse retention.
"Nursing and finance need to work together on nurse retention," Sanders said. "Nurses feel "beaten-up" by productivity tools, and there's a real difference in thought between nurses and CFOs on budgeting for productivity."
Hospital CFOs will have difficulty changing external factors associated with cost increases, Brown noted, but by focusing on internal issues like improving relations with nursing leadership, they can augment both quality and the institution's bottom line.
"Nursing leaders may not be accustomed to talking with CFOs about business development issues, but disasters can happen if they aren't included in these discussions," Brown said. "For instance, I know of a hospital that built a new critical care tower without any design input from the nursing staff. After the facility was complete, but before it opened, they discovered that the elevators they installed weren't large enough for the hospital beds!"
Does your hospital involve nurses in business plan development and discussions about revenue cycle and profitability? E-mail Associate Editor Richard Pizzi with your experiences at richard.pizzi@medtechpublishing.com.