With knowledge of the services provided, evidence-based practice, interdisciplinary collaboration and care, and scheduling, how can I prepare a financial plan for a nursing home unit with the goal to reduce waste and improve efficiency?

To develop a financial budget for a nursing home, you must look at the historic financial performance for the nursing home's revenues, labor expenses, and supply expenses to determine if any adjustments need to be made.

Expert Answers

An illustration of the letter 'A' in a speech bubbles

The financial plan of a nursing home is composed of three main controllable costs: revenues, labor costs, and supply costs. To develop a financial plan, you will need to review the financial performance of the nursing home historically. For revenues, look at how much income the nursing home has made historically. Determine if any changes need to be made to the budgeted census, types of insurances (Medicaid, Medicare, Managed Care), and number of patients with particular insurances the nursing home needs to maintain from month to month. Medicare and Managed Care reimbursements are significantly higher than Medicaid reimbursements.

For the labor budget, look at the number of employees the nursing home has utilized in each department historically. You should also review labor reports to determine if the nursing home has had employees working excessive overtime. From here, you must determine if education on time management could benefit staff or if you need to hire additional employees.

Nursing homes have supply budgets for each department, such as nursing, maintenance, housekeeping, laundry, food, activities, and office supplies. You should also review the historical financial performance for each of these departments to determine if any adjustments need to be made. It is often discovered that supply budgets can be reduced and the extra funds can be allocated to a different budget. Most importantly, you should ensure that your revenue budget exceeds your combined labor and supply budgets so that you will make a profit each month.

Approved by eNotes Editorial Team