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Teaching staff how to budget.

It will come as news to no one in the nursing home industry that operating in today's fiscal environment is a challenge, to say the least. What with increasingly frail residents, ever-changing and accumulating regulations, and the constant demands of maintaining a dedicated, caring workforce, fiscal management in this field has become an art form, requiring creative use of resources.

Traditionally, top management and fiscal managers have shouldered most of the fiscal responsibilities for nursing homes, in the belief that caregivers needed to spend all their energies and resources in providing resident services. However, staffing shortages, chronically inadequate Medicaid reimbursement, and the everchanging definitions of quality services have made it imperative that staff have a real stake in "making the numbers work."

This realization forced upper management in our facilities to grudgingly give up total control of the development of the key numbers in their operations by allowing department heads to contribute to the budgeting process. The new fiscal management process we adopted uses three logical approaches: education, budget development, and follow-up. The most vital component of this three-step process is the education of the caregivers.

Upper Management Commitment To Fiscal Education

As leaders, upper management must be committed to truly providing staff the full opportunity and challenge associated with controlling a budget. This involves overcoming a major concern: Why commit already tightly allocated time and staff resources to fiscal education?

The answer: committing to developing grass roots fiscal accountability creates better fiscal control throughout the entire operation. When caregivers are given the opportunity to understand how they are the creators, and not the victims, of budget numbers, they can -- and do -- respond with extraordinary pride in their increased control of their job responsibilities.

The Right Teacher

Obviously, selection of appropriate instructors for budget-learning sessions is critical. The best teachers for teaching numbers management are not accountants, who tend to get too technical, but people managers -- ones who have learned to value the understanding of fiscal management, and who actually use fiscal management tools in their day-to-day performance. Their teaching should be provided while the annual budget is being developed, exposing the staffers to the appropriate principles as they go along.

Teaching The Course

The material is best presented in weekly one-hour sessions, with department heads and facility supervisors as the primary audience. One administrator in our chain who has successfully used this approach suggests that, for novices, it is best to begin the educational process 11 months prior to the due date for the annual budget plan. This provides ample time for new persons to get fully comfortable with the idea of direct participation in budgeting -- a major consideration for staffers who may feel intimidated or put off by the idea.

Topics for the individual sessions will vary, depending on the facility's priorities. To illustrate the possibilities, however, a proposed scheduling and specific topics can be found in the sidebar ("'Budgeting 101:' A Possible Curriculum," p. 24).

Your initial meeting should be planned for a day and time when staff are most relaxed, and should outline the purpose of learning numbers management in terms which caregivers can understand. This is the time to present solid reasons for learning numbers management. They include: 1) understanding numbers will give them greater control of their operations; 2) residents benefit when their caregivers are the ones who allocate funds, rather than the non-hands-on people; 3) the employee's job security and sense of self-worth will be increased by learning new skills; 4) increased responsibility for this particular type of management task dramatically increases the individual's stature and authority in the organization because, after all, the language of numbers is a universal one.

Supporting The Staff's Efforts

While you are explaining fiscal management, you must point out that you are sensitive to the fears which your staff people will bring with them to this process. You must also assure them that you will provide support during the education process. Some of the most common fears are: 1) they chose caregiving to avoid responsibility for such fiscal details, since they feel that handling fiscal matters is not in their nature; 2) they fear being seen as not competent in their new task; 3) they do not know where they will get the time to deal with the fiscal aspects of their job responsibility.

Overcoming fears such as these can help staff members grow both personally and professionally. In one community, our director of support services (housekeeping, maintenance, and laundry) started out feeling very intimidated by numbers management. Because of this, he rarely asked questions regarding the budgeting process, even though he was responsible for his departmental costs. However, although he had always trusted every vendor's bid, when he compared invoices to the bids he received as part of the budgeting process, he was enraged to discover that he had experienced an 18% increase in cost of paper products during the previous year. He learned that he had been invoiced at higher unit prices than he had been given in the bid prices. From this, he learned more than a good lesson -- he felt personally cheated, and therefore justified in throwing the supplier out.

In the process, he had learned how to work with our accounting staff to avoid future mishaps of this kind.

Budget Exercise

Caregivers are extraordinarily good at defining unmet needs, but typically are very poor at figuring out how to meet them. This problem can be solved with a simple budget exercise. This budget exercise consists of three components. First is the proposal. During the beginning of the education process, the staff person should create a proposal for changing one small area of their operation. This is a simple narrative document which describes in detail what the staff person is asking for.

The second component of the budget exercise is revision of the proposal. This is your caregivers' opportunity to seek input and advice. Have them present their proposal first to peers, solicit their opinions, then present it to you privately.

Just such a real-life budget exercise eventually became a major operating improvement in a retirement community that we operate. An LPN-trained director of a 34-unit assisted living section of a large CCRC was concerned about the quality of the personal laundry being done for her residents. She set out to find a way to justify having a washer and dryer installed in her department for her staff to use.

In the process of investigating how she was going to get staffing to provide this service, she found that evening and night staff on her unit were not always busy. This meant that an improved laundry service could be provided without adding costs by having these staff do the laundry. Her analysis showed that her staff could do the laundry for her residents within existing staff hours, therefore resulting in no increase in wages. She also determined that the commercial laundry staffing could be decreased, which resulted in a decrease in expenses.

Finally, she determined that the resulting wage and benefit cost reduction would save approximately $60 a week, and in three months would pay for a washer and dryer. Needless to say, she got her washer and dryer.

The real key to the success of a process such as this, however, is management's response to such wonderful problem-solving efforts. In working with staff proposing new ideas, upper management should be objective, point out the good aspects of the staff person's analysis, and acknowledge the huge hurdles they have successfully negotiated. Any errors should then be pointed out so that the staff can go back and get it right.

The third component of the budget exercise is the "show" -- the presentation of the plans and numbers to those who make the ultimate fiscal decisions. Who ultimately approves any expenditure, budget, or wish, but the Board? Yet how often do line staff encounter Board members? Infrequently, at best, and usually in extreme situations. Upper management is most successful with full delegation of fiscal responsibility when the caregivers know the people they work for, and feel comfortable in discussing with them the fiscal realities of the workplace.

This three-step budget exercise proposal, revision, and show not only works for learning budgeting, but for any change in an operation, and if followed consistently, really does good things for morale, commitment, and numbers.

This important process is complex, but if done slowly, and in a methodical building process of adding one block on top of another, caregivers will have an excellent basis for going on to the implementation of their ideas in the real world of budget constraints and opportunities.

Wade C. White is President of Thompson White & Associates, an operator of nursing facilities and CCRCs based in Huntsville, Alabama.
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Article Details
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Author:White, Wade C.
Publication:Nursing Homes
Date:Apr 1, 1993
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