Imaeg if a Nurse Manager preparing a budget as a header graphic for "Financial Management Tips for Nurse Managers" article

6 Financial Management Tips for Nurse Managers

You likely got into nursing to help others and take care of patients. When first starting your nursing education, you may have been so focused on getting the medical training down that you weren’t focused on the financial and administrative skills that you may need down the line. As you progress in your nursing career at Clipboard Health, one of the paths you may take is becoming a manager.

As a nurse manager, your job extends beyond clinical care. It’s your responsibility to properly manage your team, resources, and facility’s finances to best benefit your organization. If you have no formal finance background, it can be stressful to learn as you do the job. However, there are ways to overcome these obstacles and thrive in your role.

What Is the Role of a Nurse Manager?

Nursing managers, also referred to as health care executives or health care administrators, direct and coordinate medical and health services for a facility or a department within that facility. They work closely with physicians and surgeons, pharmacists, and insurance agents to ensure their facility and staff have all their needs met. Some of the responsibilities of a nurse manager include:

  • Improving the quality and efficiency of health care services
  • Developing goals and objectives for their departments and teams
  • Ensuring that patient care is at a high standard
  • Making sure the facility is compliant with the latest laws and regulations
  • Recruiting, hiring, and training new staff members
  • Managing the finances of the facility, including patient fees and billing
  • Monitoring budgets
  • Creating and managing employees’ work schedules
  • Organizing records of the facility’s services
  • Communicating with all staff and department heads

Financial Management Tips for Nurse Managers

To help you transition into the world of finance, here are six financial management tips for nurse managers.

1. Create a Budget

Nurse managers are responsible for creating and implementing budgets for their departments or their entire facility. Depending on where you work, these budgets could be submitted quarterly (four times a year) or annually (once a year). You’ll need to determine the revenue your unit or facility generates against the cost of supplies, medications, and staffing expenses.

The more you research and analyze your budget, the easier it’ll be to determine your upcoming expenditures. Identifying your specific costs will help improve resource allocation.

Although you’ll have to submit an official budget for your board and/or supervisors, you should also keep track of your revenue and expenditures through an internal budget. Doing this will keep you on or under budget, and when it comes time to submit an official one, you’ll have done the work throughout the year and won’t need to evaluate the entire year at once.

2. Prepare for Fluctuation

When you’re a financial administrator, your budget, expenses, and revenue don’t exist in a bubble. You’ll have to anticipate fluctuation that could influence these factors. There are two metrics that can affect fluctuation: market share and payer mix.

Market share is a measure of the admissions or procedures your unit or facility completes in comparison to others in the area. Your market share is the percentage of the market your facility accounts for. A higher market share means more revenue and the need for more resources, while a lower one means you may lose money and have a surplus of resources.

Payer mix is the percentage and types of insurance that provides reimbursement for patient care. As reimbursements vary for each patient, revenues may fluctuate. The rise and fall of insurance premium prices also affect the reimbursement types. Monitoring both of these metrics helps nurse managers predict fluctuations and take measures against any potential shortfalls.

3. Evaluate and Forecast Staffing Needs

As you review your budget, you’ll need to take into account your staffing needs. If your unit is growing and admitting more patients, you’ll need to hire more staff. In the case of a decline in admissions, you may need to make hard choices about staffing adjustments. To properly assess your staff’s needs, talk directly to them, and ask them what they think could be done better about training, hours, and additional support. This will give you a better insight into properly budgeting your staff expenses.

4. Invest in Training

Every nurse manager wants the sharpest minds working in their unit. Enroll your staff in training on the latest procedures and medical practices to ensure they’re up to date. This will make both your hospital and employees competitive and knowledgeable, giving your patients a higher quality of care. Investing in training comes at a cost, but you’ll save money in the long run by retaining employees as opposed to hiring new ones.

5. Maintain Transparency with Staff

Keeping your knowledge of resources and budgetary limits to yourself doesn’t do any good. While you shouldn’t reveal specific numbers, be open with your employees about what is and is not financially possible. Let them know what you’re working with so they can make their requests more feasible and have a basis in reality.

On the other side, be transparent with your board and supervisors about the financial situation of your unit. If you have a bad quarter, be prepared with an explanation.  If your unit needs an expensive piece of new equipment, do research to justify your request.  While your requests may not always be granted, it makes it easier for your supervisors to know what they’re working with and not be caught off guard.

6. Research the Latest Health Care Trends

By staying up to date with the latest health care trends, your unit will gain a reputation as a leader in medical innovation, making your facility a preference for patients and insurance agents. Even if you are unable to implement all these trends and technologies, you’ll be able to anticipate industry progressions that will help you assess your own budget.

If you’re a nurse manager looking to hire nurses on a per diem basis, visit us at Clipboard Health. We’ll help you fill staffing shifts at less the cost.