Change with Impact

Budget analysis and planning in health care

Is your resource allocation realistic?

The continual demand to improve service levels at a lower cost in the health sector makes budgeting and budget follow-up key disciplines in hospital management.

Budget analysis and planning in health care

Budget analysis and planning in health care

Through years of working closely with the Scandinavian health sector, our consultants have gained extensive experience in conducting budget analyses. We closely examine estimated and realised spending and compare this with industry standards for resource allocation, activity levels and expenditure. We work with benchmarking to correct any financial imbalance and get ward or section finances on track.

The ‘zero-base budgeting’ approach

Our consultants are typically called in to conduct staffing analyses to balance the payroll budget with ward specifications and actual as well as planned staff attendance.

In these cases, we start by taking the ward’s planned staffing and assess the economic consequences of the planned day, evening and night shifts. When the difference between budgeted costs and actual attendance has been calculated, we simulate the consequences to give a clear overview of the ward’s economic latitude. We then discuss the organisational changes and changes in shifts and staffing that may have to be enforced to stay on budget.

Throughout the process, we keep an eye on the interrelated capacity needs in the different areas – radiology, bedposts, surgery in each care path etc. – to make sure that optimisation in one area will not result in suboptimisation at hospital level.

We call our approach ‘zero-base budgeting’, and it has delivered great results. It has helped hospital departments and wards achieve real cost savings without compromising performance levels and quality.

Close collaboration

In budget analysis projects, our consultants always work closely with the hospital’s executive management, ward and section management as well as the local finance department. By involving all relevant parties, we not only stimulate commitment and anchor know-how in your organisation; we also make sure that everyone knows what to do when our consultants hand over to you.

What do health care systems look like towards 2020? Watch the video and get inspiration and best practice sharing from our international health care conference.

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