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NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Student Name

Capella University

NURS-FPX 6216 Advanced Finance and Operations Management

Prof. Name:

Date

Preparing and Managing a Capital Budget

Current dynamic healthcare system, where advancement in technology is a focal point of capital investments, it is crucial not to overlook the essential aspect of providing a safe, uplifting work environment for nurses (Martínez et al., 2021). As a nurse leader responsible for a step-down unit (having 50-bed), addressing concerns surrounding nurse satisfaction level, morale, and an outmoded workspace is paramount. This assessment seeks to develop a capital budget that prioritizes enhancing the nurses’ lounge, recognizing the profound impact a positive work environment can have on staff productivity and quality of care. 

Capital Acquisition Description 

The capital acquisition plan focuses on renovating the nurse’s lounge within the step-down unit (an intermediate care unit). This renovation aims to address the pressing issue identified through exit interviews, patient surveys, and observations regarding low satisfaction, little morale, and an antiquated work environment. As a nurse manager, I plan a comprehensive overhaul of the lounge area, including furniture, improving lighting, enhancing aesthetics, and incorporating amenities that promote relaxation and well-being. The aim is to transform the space into a modern, inviting, and functional area, ensuring the nursing staff is accommodated effectively (Dupe et al., 2022).

I plan to renovate the lounge with a vision of having a comfortable space to rest between shifts, ergonomic furniture, and ample space to have personal interaction or isolation. I also plan to incorporate amenities like a refreshment station, charging station, and an area to keep personal belongings safe, like lockers. The aesthetics play a significant part by incorporating soothing colors, natural lighting, and uplifting décor to create a pleasant ambiance to relieve stress during shift hours (Shin et al., 2023).

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

The timeline of the renovation project will be structured to minimize disruptions to daily operations while ensuring timely completion. I plan to utilize a phased approach with initial time for planning and design followed by implementation and finalization with stakeholders within six-eight months, depending on the complexity of the renovation. Throughout planning and implementation, I plan to take nurses’ feedback on plans and designs to incorporate any general need that improves the working environment. 

The assumptions behind investing in a nurse’s lounge renovation include many aspects, such as reducing burnout and turnover rate, which have been prominent in the past few years. It also includes enhancing patient experience and satisfaction levels through high-quality care provided by frontline staff and nurses (Muir et al., 2022). The capital invested in this project will benefit in the long term, balancing between financial stability/growth and quality-care services. It will directly impact nurses’ morale by boosting job satisfaction and reducing stress. The turnover rate is expected to be reduced because of an attractive working environment, improving retention and recruitment (Muir et al., 2022). 

Justification of the Need for a Capital Acquisition

Based on the interviews conducted with nurses during their turnover and patient survey feedback, it was notable that the working environment needs improvement. The current working environment is the reason for low nurse satisfaction and staff well-being. This situation leads to increased turnover, reduced productivity, and ultimately compromised patient care quality (Obeidat et al., 2022). Addressing these issues is crucial for the unit’s sustainability and optimal care delivery. The capital investment for lounge renovation has several benefits for nurses, such as improved morale, job satisfaction, and reduced stress levels. This, in turn, can lead to increased engagement, better teamwork, and a more positive work culture (Riman et al., 2022). Additionally, providing amenities for socialization and relaxation can enhance nursing staff’s well-being and work-life balance

An improved work environment for nurses is expected to impact patient care positively. More satisfied nurses are likely to be more attentive, motivated, and focused on providing high-quality care to patients. Further, enhanced morale and reduced stress levels can lead to better communication, collaboration, and efficiency within the healthcare team, ultimately benefiting patient outcomes and satisfaction (Cho & Kim, 2022). The mission of our unit is to emphasize high-quality patient care and produce financial stability, so investing in a nurse’s lounge will yield results that benefit the staff, patients, and healthcare organization. 

While the proposed improvements to the nurses’ lounge offer substantial benefits, I need to acknowledge potential alternative perspectives as a nurse manager. Some may argue that allocating resources for lounge renovation will divert funds from critical areas of need within the unit or organization, such as staffing levels, training programs, or equipment upgrades. Moreover, there could be differing opinions on the extent of renovation required or amenities, highlighting the importance of careful planning and stakeholder consultation. I expect executive leaders to view the capital budget request with support. They may appreciate improving staff morale and patient care delivery, but they will evaluate financial feasibility and require justification of anticipated benefits (Flaubert et al., 2021).   

Preparing a Capital Budget

The budget is prepared, considering the goal of improving staff working environment and productivity, ultimately benefiting healthcare organizations. This plan entails the direct and indirect costs ($92k) associated with renovations for at least six months or more. The tables below list all the concrete evidence (such as furniture and equipment) along with expected costs for designing, implementing, and maintaining needed to improve aesthetics and increase productivity in working space. 

Item
Quantity
Cost per Unit
Total Cost

Lockers

10

$3,000 

$30,000 

Furniture (couches)

4

$800 

$3,200 

Furniture (chairs/tables)

10

$250 

$2,500 

Lighting fixtures

N/A

$3,000 

$3,000 

Paint

N/A

$1,500 

$1,500 

Coffee machine

1

$4,600 

$4,600 

Water dispenser

1

$2,300 

$2,300 

Room fridge

1

$3,400 

$3,400 

Total Direct Costs
  
$50,500 

The table below lists the activities essential to renovating the nurses’ lounge, such as making a massive window for natural light. There are several knowledge gaps and uncertainties that can impact the cost considerations. Firstly, we are still determining the available resources for this project. Further, the cost can differ based on vendors, chosen labor, and infrastructure maintenance cost to renovate (Hussain et al., 2020). Unexpected delays due to any reason can hinder and prolong the renovation, impacting the outcomes associated with the project. Involving nurses, stakeholders like investors, and heads of departments can help identify any challenges to the execution of the renovation and contribute through their input. Conducting financial analysis would help minimize threats and challenges through risk assessment (Homauni et al., 2023). 

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Item
Cost

Construction costs

$25,000 

Interior Designer

$7,000 

Electrician costs

$3,500 

Monthly maintenance costs

$1,000 

Contingency cost (10% of direct costs)

$5,000 

Total Indirect Costs
$41,500 

Process of Cost Calculations

The process of cost calculations is based on several perspectives. Firstly, I consulted the accounts department manager to discuss the situation of nurse job turnover, burnout, dissatisfaction, and low-quality care to patients due to a bad working environment. I discussed a rough idea of the amount required to upgrade the nurses’ lounge space. It should be somewhere in between $80,000-$100,000. After discussing with the accounts manager, I did market research to find the cost of amenities like coffee machines, water dispensers, and lockers for personal items. Contacting multiple local vendors and online research about various price ranges for each item gives a big perspective (Hassanain et al., 2023).

Lastly, I utilized an Activity-Based Costing (ABC) cost model for a renovation project. This model was suitable with its utilization based on specific activities and processes based on the consumption of their resources. It was utilized to divide various cost items and help prioritize budget allocation effectively (Kirzhetska et al., 2023). There are chances of discrepancies in the calculation based on negotiation and compensation on purchased items or labor costs that may differ due to unexpected work. However, effective communication and negotiation skills help manage costs within budget.

Budget Management Plan

The budget management plan is based on coordination and cost control methods. Collaborate with financial experts, such as finance analysts, to ensure accurate budgeting, cost estimation, and forecasting. Engaging administrative staff for logistical support, data collection, and documentation related to the budget management process would be beneficial to tracking expenses over a period. Further, collaborating with budget committees or advisory boards to review budget proposals, assess financial risks, and provide strategic guidance for budget allocation decisions (Zhang & Bohlen, 2023). For cost control methods, regular monitoring and expense tracking are planned through a tracking software system to identify deviations and overspending. Conducting periodic reviews with key stakeholders to identify cost-saving opportunities and effective negotiations with vendors through warranty cards and free maintenance over a specific period will help manage the budget effectively (Gold et al., 2022).

I will conduct a variance analysis to compare each item’s expected and actual cost and analyze its reason so I can take corrective actions accordingly. The target would be to reutilize all usable items and choose sustainable and eco-friendly options for long-term management. A to-do list would be displayed to increase the shelf-life of the furniture, equipment, and other amenities as part of effective practices. It is important to communicate variances with department heads and relevant stakeholders to ensure accountability and find alternative options for cost-effectiveness (Gold et al., 2022). The budget management plan assumes that financial data is accurate and complies with organizational policies and regulatory requirements. Stakeholders, including nurses, will be utilized for feedback and opinions to make timely adjustments, assuming the budget is flexible enough to change with business needs and unforeseen expenses (Zhang & Bohlen, 2023). 

Impact of Capital Acquisition on the Financial Health of the Hospital

The nurses’s lounge renovation is anticipated to produce a Return On Investment (ROI) through various channels. Improved nurse satisfaction and morale can reduce turnover rates, lower recruitment costs, and increase productivity. A positive work environment can enhance staff retention, which is crucial for care continuity and reduces training expenses (Abdelaliem & Boswihi, 2024). Further cost recovery period can be considered, so a thorough cost-benefit analysis can estimate the anticipated savings and revenue increases post-renovation. Factors like increased staff retention, productivity gains, and enhanced patient experience can contribute to faster cost recovery, as one percent reduced turnover saves $263k annually (Mileski et al., 2024). Moreover, depreciation value is an important consideration when assessing the financial impact of the renovation. The amortization of costs can positively impact financial statements by reducing immediate expenses and aligning costs with the assets’ economic benefit period. 

The tangible benefits, such as reduced turnover, can be measured. However, knowledge gaps about intangible benefits, like improved staff morale and enhanced work culture, are difficult to quantify in financial terms. The long-term benefits of the renovation project depend on factors like maintenance costs, dynamic market conditions, and evolving health policies. So, the sustainability of financial benefits may vary over time. Few external factors, such as reimbursement rates, can affect financial outcomes. So value-based monitoring in the healthcare working environment is essential for long-term benefit assessment (Eriksson et al., 2022). 

Conclusion 

The nurses’ lounge renovation is a strategic investment to address issues for nurses’ satisfaction. This capital budget prioritizes enhancing the nurses’ space to boost productivity and morale, ultimately improving patient care quality. Through careful planning and collaboration, the budget is designed to optimize resource allocation and minimize financial risks while aligning organizational goals. The success of this acquisition will be measured via reduced turnover rates and a positive work culture, ensuring long-term financial and operational success. 

References

Abdelaliem, S. M. F., & Boswihi, H. S. S. (2024). Nurses’ comfort and well-being: A descriptive study to find out the relationship between nurses’ awareness of self-comfort and well-being at long-term care settings in the state of Kuwait. Medicine103(12), e37479. https://doi.org/10.1097/MD.0000000000037479 

Cho, H.-K., & Kim, B. (2022). Effect of nurses’ grit on nursing job performance and the double mediating effect of job satisfaction and organizational commitment. Healthcare10(2), 396. https://doi.org/10.3390/healthcare10020396 

Dupe, B., Mitton, S., Hughes, L., Gross, E., Wong, C., Martina, K., Townsend, C., Savoie, J., Parzanese, M., & Prospero, L. D. (2022). Investing in our human capital: Sharing the experience of implementing a retention strategy at a large academic hospital from a leadership lens. Journal of Medical Imaging and Radiation Scienceshttps://doi.org/10.1016/j.jmir.2022.08.011 

Eriksson, T., Levin, L., & Nedlund, A. (2022). The introduction of a value‐based reimbursement programme—Alignment and resistance among healthcare providers. The International Journal of Health Planning and Management38(1). https://doi.org/10.1002/hpm.3574 

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Flaubert, J. L., Menestrel, S. L., Williams, D. R., & Wakefield, M. K. (2021). Supporting the health and professional well-being of nurses. In www.ncbi.nlm.nih.gov. National Academies Press. https://www.ncbi.nlm.nih.gov/books/NBK573902/ 

Gold, H. T., McDermott, C., Hoomans, T., & Wagner, T. H. (2022). Cost data in implementation science: Categories and approaches to costing. Implementation Science : IS17, 11. https://doi.org/10.1186/s13012-021-01172-6 

Homauni, A., Moghaddam, N. M., Mosadeghkhah, A., Noori, M., Abbasiyan, K., & Jame. (2023). Budgeting in healthcare systems and organizations: A systematic Review. Iranian Journal of Public Health52(9). https://doi.org/10.18502/ijph.v52i9.13571 

Hassanain, A. A., Eldosoky, M. A. A., & Soliman, A. M. (2023). Healthcare facilities redesign using multicriteria decision-making: Fuzzy TOPSIS and graph heuristic theories. Journal of Healthcare Engineering2023, 9648510. https://doi.org/10.1155/2023/9648510 

Hussain, S., Xuetong, W., & Hussain, T. (2020). Impact of skilled and unskilled labor on project performance using structural equation modeling approach. SAGE Open10(1). https://doi.org/10.1177/2158244020914590 

Kirzhetska, M. S., Kirzhetskyy, Y. I., Zelenko, N. M., Zelenko, V. A., Klos, L. Y., Shkoliar, M. V., & Gnylianska, L. Y. (2023). Activity-based costing: A practical model of cost calculation in psychiatric hospitals. Wiadomosci Lekarskie (Warsaw, Poland: 1960)76(12), 2679–2686. https://doi.org/10.36740/WLek202312118 

Martínez, M. C. V., Orellana, A. R., & Grasso, M. S. (2021). Health investment management and healthcare quality in the public system: A gender perspective. International Journal of Environmental Research and Public Health18(5), 2304. https://doi.org/10.3390/ijerph18052304 

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Mileski, M., McClay, R., Kruse, C. S., Topinka, J. B., Heinemann, K., & Vargas, B. (2024). Using serenity rooms and similar tools to improve the workplace during COVID-19: A rapid review. Nursing Reports14(1), 376–389. https://doi.org/10.3390/nursrep14010029 

Muir, K. J., Jones, J. W., Farish, N., Barker, K., Davis, C. M., & Galloway, S. (2022). “Room to reflect”: A pilot workplace resiliency intervention for nurses. International Journal of Environmental Research and Public Health19(12), 7272. https://doi.org/10.3390/ijerph19127272 

Obeidat, B., Younis, M. B., & Al-Shlool, E. (2022). Investigations into the impact of nursing unit layout on critical care nurses. Heliyon8(2), e08929. https://doi.org/10.1016/j.heliyon.2022.e08929 

Riman, K. A., Harrison, J. M., Sloane, D. M., & McHugh, M. D. (2022). Work environment and operational failures associated with nurse outcomes, patient safety, and patient satisfaction. Nursing ResearchPublish Ahead of Printhttps://doi.org/10.1097/nnr.0000000000000626 

Shin, S. H., Baek, O.-J., & Lee, E.-H. (2023). Effects of nursing work environment, need satisfaction, and depression on turnover intention in Korea. Healthcare11(12), 1698–1698. https://doi.org/10.3390/healthcare11121698 

Zhang, R., & Bohlen, J. (2023). Healthcare business budgeting. PubMed; StatPearls Publishing. https://www.ncbi.nlm.nih.gov/books/NBK589707/ 

 

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