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Operational Plan And Correlating Budget Project Description Essay

Operational Plan and Correlating Budget Project Description

The 4 West is an organization that delivers health care for the community. Recently, the organization has decided to replace the existing medical-surgical unit into a new acute care oncology unit. The oncology is a specialty in medicine that deals with cancer. The CNO (Chief Nursing Officer) has informed the nurse director that 4 west is to become a specialized oncology unit. Since the hospital is planning the transition from the medical-surgical unit to the oncology unit, the hospital will need a new operational plan and correlating budget to assist the hospital to deliver high quality healthcare at lower costs.

Objective of this project is to develop an operational plan and correlating budget for the hospital to assist in effective transition from the medical-surgical unit to the oncology unit,

Project Details and Data

To start the budget plan, it is critical to use the organizational previous salary expenses as a guide. The paper employs market adjustments and wage increases in the industry to prepare the staff budget. The following are the data used to prepare the budget:

4 West is a medical unit with 28 bed surgical unit.

Acuity is equated with 5.5 hours of nursing care for patients per patient day.

The new oncologist is projected a 25% increase in volume.

The project prepares the staffing plan and the rational for changing the unit from medical/surgical to oncology staffing.

Rational for Staffing Plan

Zhang et al. (2006) argue that personnel plan is very critical for the quality of healthcare delivery. The importance of medical staffing plan for the quality of healthcare delivery makes the staffing plan to receive a great deal of attention. Major benefits of staffing plan are the ability to control costs, which consequently enhances efficiency. Our organization will be able to control costs as well as improving efficiency with effective staffing plan. With staffing plan, our organization will be able to estimate the minimum level of staff needed for healthcare operations. However, the difficulty that we are going to face is to establish an evidence-based minimum staffing ratio with patients.

Clarke, & Donaldson, (2010) also support this argument by pointing out that effective staffing enhances quality of care delivered to patients. Typically, effective staffing plan enhances organizational competitive advantages because staffing plan will reduce the waiting time of patients, which will assist our organization to deliver high quality care for patients. Evidently, the high quality services that we will deliver in the community will attract patients to our oncology unit, which will assist our organization to enhance competitive advantages.

A report by the Nurse World (2010) reveals that there is a strong relationship between effective staff planning and safe patient outcome. Typically, organization will enjoy the following benefits from the implementation of effective staff planning:

Reduce medication and medical errors,

Decrease patients' complications,

Decrease patients' mortality,

Improve patients' satisfaction,

Reduce staff fatigue,

Decrease nurse burnout,

Improve job satisfaction and staff retention. (Nursing. 2010).

Evidence has shown that safe staff planning nearly eliminate one-fifth of all hospital deaths, which consequently reduce the risk of adverse patients events. (Kane, 2007). Reducing medical errors is very critical in the light of preventable hospital-acquired illness or injuries. Evidence has shown that mandatory staffing plan saves cost of operations and reduces the amount hospitals spend on staff recruitment and training. Typically, the costs of recruiting and retaining medical are estimated reaching between 1.1 and 1.6 times of a registered nurse annual salary, which is estimated to reach $71,344 according to Bureau of Health Profession. Effective staff planning can assist organization to yield cost saving reaching nearly $3 billion because the plan will eliminate extra days patients stay at hospitals which will consequently eliminate infection at hospitals.

Apart from enhancing quality of healthcare, our organization will also abide to medical law through effective staff planning. The law requires medical participation hospitals to include at least 55% of direct care nurses in a staffing plan. With staffing plan, our organization will be able to eliminate almost one-fifth of hospital death, which will consequently reduce relative risks of adverse events within our hospitals. (Nursing, 2010)

Preparing a Staffing Plan

This section prepares the staff budget for the 4 West and incorporates transition from medical/surgical to oncology staffing. The transition will require the hospital to incorporate the following:

The transition to the use of Patient Care Technicians,

The staffing plan with related full time employee and salary cost.

Supply cost changes included in budget ($300/patient per day to $900/patient per day),

Educational costs (staff),

Base of the project is 80% on the medical-surgical unit to 100% census as an oncology unit.

The transition to the use of Patient Care Technicians

The 4 West hospital will require a number of Patient Care Technicians for effective transition. A patient care technician is very critical for the transition because the patient care technician will be responsible for the technical management of blood filtering for the treatment of cancer disease. However, registered nurses will supervise the hospital patient care technicians. Moreover, the patient care technician will be responsible for the machine operation, which will be used to treat cancer patients. The patient care technicians will also be responsible for:

disinfecting the 4 West equipment,

Starting the equipment as well as monitoring the patients,

Disconnect cancer patients from equipments

Assisting nurses to inject needles into patients veins,

Preparing accurate report regarding our patients.

Our organization will need to organize specialized training programs for our in-house staff since the in-house staff has already understood the culture of our organization. The training program will assist our prospective patient care technicians to understand medical procedures. The training program will assist the patient care technicians to achieve full certification to become a CNA (certified nursing assistant).

Salary for Patient Care Technicians

Our patient care technicians will be earning an average salary of $30,550 yearly. The salary estimate is calculated based on the salary category of Bureau of Labor Statistics. According to Bureau of Labor Statistics, a patient care technician earns at least $30,000 annually in 2012. Our staff budget plan will be based on the official release of Bureau of Labor Statistics. (Bureau of Labor Statistics.2014).

Important Assumption

The general assumption is that the current and long-term interest rates will not be more than 10%. Moreover, the tax rates will not be more than 25%. The generally assumption is presented in the Table 1.

Table 1: General Assumptions

Year 1

Year 2

Year 3

Plan Month

1

2

3

Current Interest Rate

10.00%

10.00%

10.00%

Long-term Interest Rate

10.00%

10.00%

10.00%

Tax Rate

25.32%

25.00%

25.32%

Apart from the general assumption, the important assumption is that our oncology unit will be between 90% and 95%...

The projecting capacity for the 4 West medical unit is 24 bed surgical unit. Each patient is assumed to be billed between $300 per day and $900 per day depending on the patient's health complication. However, private patients will be billed slightly higher.
Personnel Plan

Our Oncology unit of the 4 West will rely on the specialist oncologists, skilled nurses, and patient care technicians. We will also provide special training for the staff to deliver a holistic medical care. Our commitment is to deliver fair wages in our personnel plan. To enhance effective and efficient patient's care, all our full-time staff will enjoy the following benefits:

full health benefits, sick leave, two-week paid vacation per year, and Two-week paid vacation per year for senior staff. (Goodman, 2012).

We will include all the benefits in the personnel monthly payments.

Our part-time positions are as follows:

1 Medicare Billing / Holistic/Specialist.

Our organization will require the following medical and caretaking staff to meet our staffing goals:

A full-time Medical Director,

2 full-time oncologist working between 35 and 40-hour week from 9pm to 7am, (switching between 4 and 3 days/week). Will start training when hired,

1 part time oncologist working 35 hrs/week, between 5-10pm.

5 Patient Care Technicians and 5 registered nurses.

Apart from the services of medical staff, our organization will also require the service of development and administrative personnel who will include:

One full-time Financial Manager,

One part-time Medicare Billing Specialist ( To work 20 hours/week) and One part-time Development officer.

Our personnel plan is delivered in the table 2.

Table 2: Personnel Plan

Year 1

Year 2

Year 3

Medical/Clinical Personnel

Medical Director

$66,000

$66,000

$67,000

Oncologists ( Full-time working 35-40 hrs, night)

$117,000

$118,000

$119,000

Register Nurses - swing shift, 30 hours per day

$34,125

$58,500

$59,000

Subtotal

$217,125

$242,500

$245,000

Caretaking Personnel

Elder Assistants

$221,520

$223,000

$255,000

Other

$0

$0

$0

Subtotal

$221,520

$223,000

$255,000

Administrative Personnel

Medicare Liason and Billing Specialist

$33,600

$34,000

$34,500

Financial Manager

$64,800

$65,000

$65,500

Part-time Marketing

$0

$0

$0

Subtotal

$98,400

$99,000

$100,000

Fundraising Personnel

Part-time- Development Officer

$14,400

$15,000

$15,500

$0

$0

$0

$0

$0

$0

Subtotal

$14,400

$15,000

$15,500

Total People

14

14

14

Total Payroll

$551,445

$579,500

$615,500

Based on the personnel plan for our organization, the paper presents the budget plan for the oncology unit.

Budget plan

Budget plan

Year 1

Year 2

Year 3

Funding

$860,700

$868,800

$876,900

Direct Cost

$76,140

$89,424

$91,287

Medical/Clinical Payroll

$217,125

$242,500

$245,000

Non-reusable Medical Equipment

$4,800

$5,000

$5,000

$0

$0

$0

Total Direct Cost

$298,065

$336,924

$341,287

Gross Surplus

$562,635

$531,876

$535,613

Gross Surplus %

65.37%

61.22%

61.08%

Operating Expenses

Caretaking Expenses

Caretaking Payroll

$221,520

$223,000

$255,000

Groceries

$16,800

$18,000

$20,000

Cleaning Supplies

$1,200

$1,200

$1,300

Other Caretaking Expenses

$0

$0

$0

Total Caretaking Expenses

$239,520

$242,200

$276,300

Caretaking %

27.83%

27.88%

31.51%

Administrative Expenses

Administrative Payroll

$98,400

$99,000

$100,000

Other Expense Account

$0

$0

$0

Depreciation

$1,200

$1,500

$1,800

Property Taxes

$12,000

$13,000

$14,000

Utilities

$24,000

$25,000

$26,000

Insurance

$14,400

$15,000

$15,000

Payroll Taxes

$82,717

$86,925

$92,325

Grounds & Building Upkeep

$4,800

$5,000

$5,000

Other

$0

$0

$0

Total Administrative Expenses

$237,517

$245,425

$254,125

Administrative %

27.60%

28.25%

28.98%

Fundraising Expenses:

Fundraising Payroll

$14,400

$15,000

$15,500

Brochures, Marketing

$800

$1,000

$500

Fundraising Expenses

$0

$0

$0

Total Fundraising Expenses

$15,200

$16,000

$16,000

Fundraising %

1.77%

1.84%

1.82%

Total Operating Expenses

$492,237

$503,625

$546,425

Surplus Before Interest & Taxes

$70,398

$28,251

($10,812)

EBITDA

$71,598

-$29,751

($9,012)

Interest Expense

$20,479

$17,200

$13,450

Taxes Incurred

$0

$0

$0

Net Surplus

$49,919

$11,051

($24,262)

Net Surplus/Funding

5.80%

1.27%

-2.77%

Our organization will provide training for our new and old staff to meet our organizational goal. We will provide training programs for all our newly hired and old staff to be more competent. We will provide in-house training for all our oncologists, registered nurses and patient care technicians. On the job, training will also be delivered for all our staff. The training will be based on the following program:

Standards of care

Evidence-based practice

Clinical practice

Professional performance standards.

However, the training program for our oncologist will be as follows:

Types of cancer

Principles of management

Importance of follow-up. (International Atomic Energy Agency,…

Sources used in this document:
Reference

Bureau of Labor Statistics.(2014). Healthcare Occupations. Occupational Outlook Handbook. USA.

Clarke, S.P. & Donaldson, N.E. (2010). Chapter 25. Nurse Staffing and Patient Care Quality

and Safety.

Goodman, A.(2012). Oncology Nurse Staffing Is Variable and Multifactorial. Nursing News.
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