4 Key Best Practices When Budgeting for Healthcare Facilities
Healthcare facility managers have a lot of responsibilities that they have to juggle on a daily basis, many of them directly related to the day-to-day operations of the facility. So when do you find time to make the budget for your department? It’s easy to let planning the budget fall to the last minute, but doing so could be costing your facility—in more ways than one. How do you create a strategic healthcare facilities budget? Here are four of the most important best practices to keep in mind.
1. Prioritization is key
Prioritizing the most important expenses is a part of planning any budget, personal or professional. But when you’re talking about a healthcare facility, prioritization is especially critical, as investing in one thing over another could directly affect patient care procedures and outcomes. The budget you create is directly related to all of the other departments in your facility, so look at the big picture before you begin and throughout the process.
And though it should go without saying, the health and safety of patients and practitioners in your facility should always come first. When it comes down to it, expenditures that address health and safety needs are likely to be reviewed with more leniency than those whose impact is less direct.
2. Know your warranties
When something that’s vital to the operations of your facility breaks, it needs to be fixed, period. If you’re consistent about tracking the warranties on your equipment, however, it doesn’t have to mean cutting into your budget. Every time you purchase a new piece of equipment or technology, make a habit of recording the date and the terms of the warranty in a warranty database. That way, when it comes time to repair or replace something, you have a resource you can reference to mitigate costs. After all, there’s no sense in paying for something twice.
3. Establish vendor pricing agreements
Price negotiation is not really a part of most of the buying and selling we do in our personal lives, at least in the United States. But for business purchases, and especially large scale purchases, there’s almost always room to compromise on price if you know how to approach it. One of the ways vendors and healthcare facilities manage this is through vendor pricing agreements.
Through tier pricing or an independent agreement, healthcare facilities can save on purchases depending on volume, total cost, or market share. In addition to up-front savings or more attractive financing options, a savvy negotiator may also be able to bring down the total cost of ownership (TCO) of equipment by setting the amount they’re willing to spend on maintenance and repair at the beginning of the agreement.
4. Be able to provide reasoning
While budget approvals are far from most facilities managers’ idea of fun, it makes sense that it’s subject to scrutiny. After all, the facilities management budget affects the entire facility, and getting the okay from finances and higher ups means more chances for affirmation or correction. Therefore, making sure that the people approving it understand your reasoning is critical.
The rationale behind your budget shouldn’t be something you add just before turning it in; it should be a part of your every day operations. Document your thought process and take note of any helpful resources that will help others understand the need for any given budget item. In addition, take the time to calculate the ROI and TCO of your most important expenses. Numbers speak to stakeholders across the organization, and may be your best argument if you’re faced with opposition.
Strategic budgeting is just as important a responsibility as day-to-day operations, but it can be difficult to make time for it. By utilizing these budgeting best practices, you can stretch your budget further and make sure that your facility has the tools it needs to provide top-of-line care (and improve the bottom line, too.)