How Do Nurse Leaders Effectively Manage Finances for Healthcare Teams?

How Do Nurse Leaders Effectively Manage Finances for Healthcare Teams?

Nurse leaders work with their facility’s finance team to establish fiscal goals for the future and plan the budget. In a big city hospital, their responsibility may span just one nursing unit, but in smaller local clinics, they may have to manage the finances of an entire center. Once they have worked on the organization’s finances, by reading the relevant data, developing the budget and offering recommendations, their work is passed to the administrative department. Next, it is submitted to the facility’s directorial board for them to approve. Although there are likely to be some questions and clarifications along the way, most nurse leaders are respected members of the team and, by and large, their financial proposals are likely to be accepted. At this point, it could be said that the real work begins, because the nurse manager and the teams they collaborate with must ensure that the planned services are delivered. 

Training for roles in advanced leadership positions

To a certain extent, there is some leeway, however, as most people who work in finance would agree that a budgeting strategy is rarely fixed into position and adhered to unwaveringly. Instead, the process involves constant monitoring of the organization’s income, resources and outgoings. When corrective measures are needed, they will be taken dynamically. It sounds complex, but nurse leaders are trained in financial management during their post-graduate course. They also learn on the job before they qualify, particularly if they have been promoted to a more senior position.

 Nurses who have excelled at work and risen through the ranks as a result may want to move into a leadership role. Previously, some were held back from taking a master’s degree because the courses were too long or there was no university offering them close by. However, in recent years, more working nurses have found a route to career advancement through online study at universities such as Cleveland State University.

Cleveland State University’s clinical nurse leader programs are delivered through online coursework and 500 learning hours in the student’s local community, where they will develop advanced techniques in leadership, supervision and overseeing patient care. Moreover, students are able to qualify in just 19 months. 

Strategies for managing the budget successfully 

Once the budget for a unit, department or facility has been agreed upon, the nurse manager is tasked with keeping things on track and making sure that no more funds will be needed during that fiscal period. In the initial stages, nurse leaders will need to speak with their teams to pass on any directives that have come from the executive suite. Part of this will involve opening a dialogue between the people who run the hospital and the staff. Having gained feedback from staff, a nurse manager may communicate the additional needs of a unit to the executives and point out what kind of resources would be required. They will also bring along any related statistics and information to back up their assertion. 

Communicating expectations for the financial year

In their leadership role, nurse leaders will use their advanced skills to communicate openly with the team about how budgetary changes will impact them. They will be completely transparent about the impact on the department and explain the reasons for any changes. This means that the team is not taken by surprise and understands the implications. Should there be any debate, it is often the nurse manager who will liaise with the staff, the hospital administrators and the executives to reach an agreement. 

Planning what services will be needed in the coming year

The hospital’s finance team will usually be aware of what services have been planned for the next year. However, this may only be true of the more significant projects. Smaller plans that require additional staffing or resources may not be included in the budget without prior warning from the nurse manager. They will work out the projected needs of each project and include them in their plans so that they are accounted for in the coming budget. Communicating this in a timely way is vital if the nurse manager is going to maintain a good working relationship with their colleagues in the finance team. 

In larger facilities, holding monthly meetings to ensure that the current financial reports are accurate means that any future activities can be mentioned well in advance. Furthermore, if a nurse manager anticipates any changes to the budget that are not yet concrete, they can communicate them instead of waiting until the next year. This gives the finance team more time to plan and work out ways of managing any additional costs, such as finding out if any other funding streams are available. 

Justifying changes to the budget using evidence

Nurse leaders have to be ready to explain why they have proposed some features of the budget. It is often the case that at least some items will be questioned by the executive team, but nurses can use their experience of working on a ward in patient-facing roles to justify any additional costs and describe the reasons for including them. To do this effectively, they will be prepared in advance for the types of questions that could be asked and be ready to back up their arguments with data. They may need assistance from the finance department when it comes to preparing for a meeting, or they may ask the nursing team to collect evidence that they can present to the hospital’s managers in support of their proposals. 

Managing the hospital’s inventory to avoid overstocking and understocking

Hospitals get through a huge amount of supplies daily, which is why inventory management is such an important issue. Nurse leaders fulfill that aspect of their role by supervising the ordering, storing and usage of supplies that will be used to provide medical care. At any one time, the hospital can have quite a large build-up of products in its inventory, and therefore these stored goods represent a major investment, one that is on hold until the products are used. Keeping the inventory insured, storing it carefully, and tracking the movement of supplies is costly. There can be a sizable financial strain put on any facility that regularly orders excessively, has shortages, or sees frequent incidents of damaged stock. 

To avoid any of these pitfalls, nurse leaders work with the purchasing department to develop a plan in which stock is only reordered when it is needed. They will also establish a system for keeping track of the inventory, such as regular stock takes, and monitor how it is used. As well as supporting the set budget, this avoids disruption caused by supply chain issues and minimizes wastage that occurs when medications go out of date. 

Identifying wasteful practices and budget drains 

Hospitals are constantly changing to keep up with innovations in patient care. As part of this process, the structure of the clinical team and the organization will also undergo a series of changes, some of which will be easier to manage than others. During periods of transition, when people are adjusting to new equipment and different working practices, mistakes can occur. Part of the nurse leader’s role will be spotting any areas of the organization that seem to be problematic and finding solutions – from accidents to medical errors, gaps in the professional development of clinicians, outdated technology, and units that experience high staff turnover, they will monitor each problem over time. Next, they can use their position as a leader in the hospital or clinic to approach the executive team and suggest solutions. These will be focused on prioritizing patient safety, supporting the healthcare team and making the facility more cost-effective. 

Marketing to people who might become investors 

Healthcare providers are always seeking to attract responsible investors to become stakeholders in their facility and contribute to its budget. Nurse leaders have to establish a marketing plan to interest investors, and part of this will involve reaching out to them online and through networking events. As part of a team from their facility, nurses can attend these events to advertise their hospital’s unique benefits and demonstrate why they stand out from the competition. They could explain more about the innovative healthcare and medical technologies that the hospital uses in patient care, highlight the most notable and talented members of the medical team, and show a willingness to adapt to changes in the healthcare landscape. 

In the modern healthcare industry, part of attracting investors is through the provision of value-based care. This is a concept that blends quality care with excellent patient outcomes while managing to control costs, both for the facility and the patient. According to the research firm McKinsey & Company, facilities that use a value-based model are becoming ever more attractive to investors. This is because of the “distinctive quality of care that they can provide and the investable opportunity they present, with a diversity of risk levels and business models”.

Showcasing the hospital to potential patients

Hospitals and clinics have to remain competitive to maintain their position in a busy marketplace. As so many healthcare services have moved online, patients no longer feel that they have to attend the facility closest to their home, especially for non-emergency visits. To keep a steady volume of patients or to boost these numbers, nurse leaders must reach out effectively to consumers in the healthcare market and engage them with the service on offer. This could be through sending personalized emails containing information relevant to the patient’s healthcare journey. They might also reach out to local clinics and physicians’ offices to explain more about what the hospital has to offer and try to increase the number of referrals that those facilities make. 

In part, this work can be informed through research into the patient’s online experience. Years ago, a relatively well-designed website could make a significant impact on the impression that people gained of a medical facility, but now people expect more. They see examples of excellence in web design every day and will have expectations for any other pages they visit, especially if they are promoting something as important as healthcare. Nurse leaders should ensure that their facility has an optimized website that looks good on a mobile phone, contains accurate information, and presents contact details for anyone who wants to get in touch.

Actively engaging with healthcare consumers 

Many hospitals rely on a basic social media offering and hope that their posts will be spread organically. For nurse leaders who are taking care of the finances of a busy team or facility, posting updates, photos and news about upcoming events is good but unlikely to be enough. Letting healthcare customers know what is new at the hospital and creating a brand can often be done more effectively through paid adverts on channels such as Facebook and Instagram. This can reach large numbers of people with an interest in healthcare for very little effort or investment. 

Part of any social media drive will also include reacting to feedback and managing the facility’s online reputation. Nurse leaders will either respond personally or arrange for another member of the team to respond when a person shares their opinion on social media or a review site such as Yelp or Google. Being defensive is never a good idea, but thoughtful responses that show that an effort is being made to resolve the issue generate good publicity for the hospital. If the reviews are positive, taking a minute to thank the patient and expressing hope for their continued recovery can be just as important. 

Ensuring that resources are allocated appropriately 

One of the most critical aspects of budgeting in a busy healthcare facility is managing resources. At the start of a financial period, it can be tempting to assume that there are plenty of supplies and staff to go around. However, resources are always limited in a healthcare organization, and learning how to allocate them during times of drought is a skill that nurse managers learn and refine. In many facilities, the most pressing issue is a lack of medical staff, because the shortage of healthcare workers is a global phenomenon.

Hospitals have a set number of professionals and they have to take care of the healthcare needs of a changing number of patients. Therefore, estimating who will be needed, when, and for how long can be difficult in a medical setting. Nurse leaders will strive to keep people with higher skillsets free for when critical cases emerge and ensure that staff with less experience or qualifications are tasked with low-priority work. By allocating the available resources effectively and constantly evaluating their decisions, nurse leaders can avoid unexpected emergencies and support excellent patient care. 

Identifying when and where things are going wrong

Whether they are arriving on a new unit for the first time and finding a budget that seems dysfunctional, or there seems to be an ongoing problem with sticking to a budget, nurse leaders need to spot when the current system is not working. This can often happen when the budget is inflexible and does not react to changing circumstances – for instance, a growing volume of patients or a need for more equipment. It can also be an issue in hospitals where the nurse manager is being bypassed. When these experienced healthcare professionals recommend more staff on the unit, for example, but someone in the senior administration team refuses, it can quickly have an impact on patient outcomes. This in turn affects patient satisfaction and can lead to bad reviews or people going elsewhere for treatment.  

Finally, nurse leaders can find that although they are expected to be accountable for a budget, they do not have the tools to do the job. Being given access to the budget, all the corresponding financial reports, and any other relevant information is crucial. In a new post, it can be difficult to turn things around, but problem-solving is one of the key leadership skills that nurse leaders learn at university. 

An organization survives and thrives with effective financial management 

In a large hospital, the nurse manager has to assume financial responsibility for their unit or section, while in a smaller facility, they may oversee a more significant proportion of the budget. In either situation, the nurse treats the department or clinic as a business, regardless of the part of the healthcare system in which they are working. Even in not-for-profits, it is essential to manage finances as if the organization were a business, because it needs to make a profit in order to survive in a competitive industry. To do their job effectively, nurse managers will consider advertising, marketing, resource allocation and more, and they will educate the team around them about efficient working practices. Everyone on the team has a part to play in ensuring that the facility stays afloat. Through shrewd financial administration and practical budgeting, a nurse manager secures the long-term health of their hospital or clinic.