Organizational Restructuring in the Australian Act Health - Assignment Example

Business plan and budget development Name Institution Date of submission Introduction Health care sector poses many challenges in enhancing effective service delivery and maximum returns on investment. The sector faced with issues of increased competition, developing and costly technology, emergent of new consumer demands, new regulatory provisions, increased scarce resources, demand for efficiency and changing workforce (Teusner, Chrisopoulos & Spencer 2008). Adoption of market-based model of institutional management has led to demand organizational restructuring. Redesigning of health care and hospitals based on a number of contemporary managerial ideas. They include service decentralization, total quality management, process reengineering, and use of teams, high-performance work organization and patient-focused care. However, the model of management has not fallen in favour of the nurses who prefer nursing practices for better results. Hospital restructuring should be patient-oriented other than on effective management. The decisions should be pro-growth, innovation, quality, cost and improved satisfaction. Market-based model enhance centralization of administrative duties and responsibilities to reduce overhead costs and job duplication, decrease in staff numbers and abolition of middle-level management. The model encourages white-collar professionals to blue-collar workers leading to ballooned administrative workforce to nurses. This paper attempts to develop plan and budget for expansion of a surgical ward in a public hospital in the capital territory of Australia. This plan will identify vital state and local policies and plans necessary for restructuring hospital facilities. It will establish important data and documents used in service and infrastructure expansion in Australian ACT Health. Workload methodology will be applied to deliver effective services. Staff mix approach will be used to offer solutions for a new establishment. The document will enumerate procedures for developing cost centre budget. The plan will consider three methods of budgeting including Zero-based, output-based and flexible approach. The plan will also give a detailed approach on preparation of cost centre expenditure budgets for the new facility. A Sample budget for staff salaries and wages shall be developed and analyzed. Question 1 - Developing a business plan 1) Relevant National, State and local plans and policies used to inform the development of the business plan and why they would be important. Organizational restructuring in the Australian ACT Health stipulates the following requirements when managing directorates or clinical divisions of outpatients, inpatients, support services and community. Enhancing streams care model which entails a network service model called clinical streaming (Kearin et. al., 2007: 42). Streaming is vital in enhancing participatory level of clinicians and consumers, as a strategy of ensuring client needs are met in planning, developing and implementation of hospital services besides enhancing economical allocation of resources. The following procedures are important when introducing a new hospital structure: creation of equality between nurses and doctors to enhance collaboration between management structures and clinical divisions. Flexible allocation of financial and human resources under the management of a nurse executive developed for appropriate resource allocation. Senior nurses accorded administrative support and delegated authority for operational and strategic management of nursing services. Director of nursing should represent interests of nurses in the administrative, corporate professional and financial forums. Line relationship between senior nurses with Director of Nursing across the structures maintained. The new facility should consider among other factors: loyalties and personalities of current staff structure and size of the organization since it has an effect on the kind of services provided. In addition, the expertise and skills of current staff, capacity for bureaucratic rationality, reasonable workload and interpersonal relationships are vital. Reorganization must maintain individual professional links. High nurse patient ratio should be maintained to enhance consumer satisfaction and limited job control to avoid high physiological stress. 2) Documents and data needed to collect and analyze when developing a service profile. Examine the service demand for the new service level.  The service plan must be within provisions of the 2013-2018 workforce plan of the Australian Act Health. Demographics on the workforce and community population will be vital in developing strategies on workforce development, reform, planning and policies. Other documents needed include: geographic map, Health service direction with details on existing community and private service hospital services and support services, plans on infrastructure expansion, maternity, renal, intensive care and cancer services. More so, information on rehabilitation and sub-acute, emergency and surgical and medical services is necessary (Larman 2012). Canberra hospital located in Australian capital Territory face increased demand for surgical services leading to the government allocation of $54.6 million to increase general inpatient beds for 2014-15 year to expand its surgical facilities (Beardsley et. al., 2014:884-87). The investment will add more beds in the facility and the home program. There is an increasing demand for bariatric and elective surgery in the community. Approximately 800 patients needing elective surgery are on the waiting list. The hospital is a major tertiary trauma and referral centre in the capital Territory hence need for expansion of existing surgical facilities to meet rising demand for dependency admissions. 3). Workload methodology useful for determining the supply of nurses required to staff the new service level  Nurses per Occupied Bed method (NPOB) will be used to evaluate required staff and how to mix them in the ward (Duffield et. al., 2011: 244-255). The method captures actual establishment on the agency and bank hours; ward overhead and time-out allowances to add indirect care, leave components and associated work. The information recorded in a matrix captures the number of Wards, average occupancy, nursing assistance, G/H/I per occupation bed and the total against group care. The data generated from the formula will create an opportunity for the manager to benchmark the Wards. The methodology is useful in finding and verifying professional judgment. The method is empirically derived to generate staffing and grade-mix formulas. The approach enhances ways of generating and establishing Selecting and Applying Methods in estimating the size and mix of Nursing Teams ward’s grade mix. 4) Briefly discuss any skill-mix or staff education issues taken into account for the new combined service.  NPOB approach does not rationally determine base staffing. There is no assurance on the quality of data collected from wards for computation. The method is insensitive to changes in patient dependency. The formula apportions same number of nurses per ward irrespective of whether patients under analysis are of low or high dependency sensitivity (Duffield et. al., 2011: 244-255). Outpatients display low dependency to inpatients. The method is also expensive to update since it requires extensive fieldwork to change formulas for a specialty that in some way alters nurses’ practice. Data used in the formula is routinely collected hence prone to errors as opposed to systematically and deliberately collected data that is empirical and therefore confirmed. There are hidden processes and structures embedded in the formula that should be made explicit. Data drawn in this case may be from a different geographical local compared to Wards under study whereby spoke, and hub units have different nursing activity to Nightingale-type wards. Question 2 - Developing a cost centre budget 1) Benefits of having the Nurse Manager develop a cost centre budget for a surgical ward. Cost centre budget is vital in establishing flexible cost for control purposes (Pinczuk 2014). The manager utilizes available space effectively from computed details on cost of furniture, instruments and equipment. The budget will inform the management on the price and quantity of the equipments, instruments and furniture used in the facility. The information will guide in buying and stocking medical supplies and drugs as well as in monitoring use and maintenance of such materials. All these efforts would lead to improved service delivery leading to more bed occupancy rate from increased admissions. The exercise is therefore, meant to record updated actual cost of offering clinical services for benchmarking and policy purposes 2) The best method among Flexible, zero-based and output-based (or clinical) budgeting that should be adopted by the Nurse Manager to develop a budget plans for this new combined service. Traditional or flexible method of budgeting flexes the budget to reflect current month’s actual volumes (Gordon 2003: 221). It is not easy to analyze variance in labour using this method since the targeted variable labour account captured as the total variance. The method displays false variances in most of the variances. The method sends confusing and false messages to management leading to erroneous decisions being made. Zero based budgeting reverses traditional working process of budgeting (Webber 2007). In traditional or flexible budgeting, management decisions are based on variances versus preceding years. Zero-based method approves each item in every line unlike use of variances alone. It ensures budget requests are re-evaluated well from zero based. The method eliminates identified obsolete and wasteful operations. It identifies deflated budgets, helps managers to develop cost effective strategies of improving resources and establishes opportunities for outsourcing. Unlike flexible and output-based methods, Zero-based is time-consuming compared to flexible method; it requires much information to enable budgeting process. Getting such volumes of information is difficult in big organizations. Compared to flexible method, zero-based approach is very complex hence needing specific training. However, Zero-based method is best for our case given that it is more reliable than flexible method. It is less involving in terms of other departments and institutions in planning and execution of activities is applicable in both short term and long term circumstances unlike output method meant for long term plans. Output budgeting base its results on funding levels (Webber 2007). It is effective for program administrators who manage effective and cost-efficient budgeting outlays. Unlike zero-based and flexible budgeting, the method is best suited for public institutions in which there are many processes involved in the budget preparation before reaching execution and post-execution. The processes involved in public budgeting help in examining and analyzing all needed issues before approval. The method also conforms to accountability guidelines stipulated in the funding conditions of World Bank. The stipulated conditions render flexible and zero-based method are not valid in accounting for such finances. Unlike traditional methods that fall short of sophistication in terms of budget readjustments, the output method takes into account social, political and environmental factors in accounting for results. The output-based method suits long term plans. 3) In the context of developing a cost centre expenditure budget:  a. Three main areas of expenditure (line items) considered for the expenditure budget and examples of the issues considered for each area of expenditure. The three-line items considered in the expenditure budget include nursing salaries entailing recovery and anaesthetic. Others include medical and surgical supplies and goods and service reported in theatres like housekeeping, maintenance, laundry among others (Shepard Hodgkin & Anthony 2000). b. Identify and discuss the cost centre reports generated within your organization that will be used to provide a baseline for the budget calculations.  Cost centre will entail information on nursing salary from the ministry of health or approximated as per employees’ classification levels (Shepard Hodgkin & Anthony 2000). Fringe benefits entailing gratuities to physicians and employees of hospital revenues. Items donated by foreign governments or agencies measure level of efficiency in performance when benchmarking with other institutions. Expenditure by the ministry on vehicles, salaries and stationary are added to the line of items from the information retrieved from the hospital and the ministry. Data on drugs provided to the facility by the government or its agency is evaluated using. Pharmacy records if possible. Fuel expenditure can be indirectly estimated from the distance covered in the logbooks using local price per litre. Maintenance by government personnel are estimated using square per feet or weighing life of the facility for maintenance is appropriate. Cost recovered from retained fees is obtained by applying fee schedule to available data. Accounting for delayed payments is possible using hospital request for utility data at a Capital of 3% of the price of the asset. Question 3 – Develop a sample Salaries and Wages budget Review the following sample staffing profile  Develop a sample Salaries and Wages budget for this profile and make notes on all your calculations to demonstrate your thinking. Explain the assumptions that you make to underpin your decisions. Each cost centre has a code; each unit cost is given account code e.g. Cost centre 1255 for Surgery. Account code 11111 for FTE RN. Budget statement will contain all expenditure on nursing staff salaries in a year (Scott 2003). Staffing levels are directly dependent on the patient dependency. Patient needs, planned and available nursing hours and cost per nursing care per patient. Weighted Capitation Formula divides human resources in the ward. Measure of nursing workload is directly related to demand good care in terms of quantity and skill mix. Managerial approach will be effective in this case. Use of the horizontal method allocates nursing time to the skill of the nurse multiplied by weighted by demand level of the patient (Andrews et.al., 2006:861-874). There are two shifts a day for Grades E, D, auxiliary and health care support workers whereby are trust employed not entitled for extra duty payment. In a sample of the salary budget encompasses staff costs like salaries, overtime and training. Surgical ward, Canberra Hospital Annual staff budget statement of Establishment WTE Description Code Expenditure pay $ 5.00 1.00 FTE Nurse Unit Manager level 2 1207 10,400 4.00 1.00 FTE CNS (Education & Quality Improvement) 1208 8,320 3.00 5.00 FTE RNs 1209 10,400 2.00 4.40 FTE Enrolled Nurses 1210 4,160 1.00 9.00 FTE Assistant in Nursing 1213 2,080 Total Pay 35,360 Assuming UOS in our case is a patient admitted overnight in the ward and ADC being number of inpatients in a day. ADC equals number of patient days in a given period divide by number of days in the period. In our case, there are 32 general plus 12 short surgical beds. UOS = (32*365)/365 = 11680/365 = 32 average patients per ward. Assuming ALOS is an average length of patient stay in the ward. ALOS equals number of days a patient stays by number of discharges in the period. In our case, assuming patients stayed for (32+12)*365 annually = 16060, and discharges were say 365*20 = 7300, ALOS = 16060/7300 = 2.2 days. The full-time equivalent (FTE) equals a full-time nurse working for a year. FTE = 40hours per week or (52*40) = 2,080 paid hours annually including holiday, sick or vacation days. Two employs working half time in a year equals one FTE working for a year. FTE = lengths of shifts times days worked divided by 40 hours worked by FTE. Assuming a nurse works four eight-hour shifts a week, FTE = 0.8. = (8*4 = 32 /40 = 0.8). Assuming the institution remunerates its staff as follows: one FTE Nurse Unit manager level 2, FTE CNS, FTE Registered Nurse, FTE Enrolled Nurse and FTE Assistant in Nursing are paid $5, $4, $3, $2, $1 per hour respectively. The expenditure budget will be as follows: 1. FTE Nurse Unit Manager level 2 = 5*2,080 = $10,400 2. FTE CNS (Education & Quality Improvement) = 4*2,080 = $8,320 3. 5.0 FTE RNs (3.0 FTE RNs, 0.4 FTE RN, 0.6 FTE RN, 0.8 FTE RN, 0.2 FTE RN – all on rotating rosters). Assuming each nurse works for eight hour a day, FTE =( 5*3*2,080)/3 = 31,200/3 = $10,400 4. 2.0 FTE Enrolled Nurses = (2*2*2,080)/2 = 8,320/2 = $4,160 5. FTE Assistant in Nursing = 1*1*2,080 = $2,080 Conclusion Management of hospital facilities and human resource is a taunting task for nurses short of administrative and management skills and knowledge. Increased demand for medical services in Australian Capital Territory has led to the need for nurses to train in administration and management of human and financial for efficiency and effectiveness. This paper has given in-depth information on effective management surgical wards by Nurse Manager. The case study is based on Australian ACT Health. Several data and documents have been used and analyzed in the development of service profile for the plan. Various methodologies of budgeting have been evaluated to identify the best approach for our case. Zero-based method was adopted since it offers reliable formula of accounting for all the procedures and resources under analysis. The plan has highlighted vital cost centre line items and issues to be considered in developing expenditure budget. An annual sample salaries and wages budget has been developed for FTE nurses. All these information is important for the management in rationalizing limited financial and human resources in hospital facilities. This plan is therefore, a vital document for hospital staff at the management level. It will enhance their basic accounting, finance and management skills and knowledge in their responsibilities. Bibliography Andrews, G. J., Brodie, D. A., Andrews, J. P., Hillan, E., Gail Thomas, B., Wong, J., & Rixon, L. (2006). Professional roles and communications in clinical placements: A qualitative study of nursing students’ perceptions and some models for practice. International Journal of Nursing Studies, 43(7), 861-874. Beardsley, C. J., Sandhu, T., Gubicak, S., Srikanth, S. V., Galketiya, K. P., & Piscioneri, F. (2014) A model-based evaluation of the Canberra Hospital Acute Care Surgical Unit Surgery today, vol. 44, no. 5, pp. 884-887. Duffield, C., Diers, D., O'Brien-Pallas, L., Aisbett, C., Roche, M., King, M., & Aisbett, K. (2011) Nursing staffing, nursing workload, the work environment and patient outcomes, Applied Nursing Research, vol. 24, no. 4, pp. 244-255. Gordon, J. (2003). Managing finances in the nursing practice setting. Nursing Leadership, 221. Webber, D. (2007) Good budgeting, better justice: modern budget practices for the judicial sector, World Bank. Kearin, M., Johnston, J., Leonard, J., & Duffield, C. (2007) The impact of hospital structure and restructuring on the nursing workforce, Australian Journal of Advanced Nursing, The, vol. 24, no. 4), pp. 42. Larman, C. (2012) Applying UML and Patterns: An Introduction to Object-Oriented Analysis and Design and Iterative Development, 3/e. 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