Health Care Budgeting: Seven Steps

A detailed Summary of Health Care Budgeting: Seven Steps


Larry Scanlan, in his article about hospital budgeting, presents seven keys to a successful budget. These "reality keys", as he calls them, are designed to help insure that the CFO and CEO are able to navigate through a difficult process.

The first of these is accountability. He recommends communicating about the status of financial performance in all areas, and instituting a compliance plan that monitors and responds quickly to problems. Teamwork and a high sense of management integrity are essential. The budget is everyone's responsibility, not just management.

The second key is to know your market. The budget process should mesh seamlessly with the strategic plan. Management should have a


Scanlan argues that it is important for the CEO and CFO to set the tone and direction for the planning and execution of the budget process. It is their responsibility to keep the budget grounded in reality. "By using the keys to budget reality, you can monitor performance, identify trends, and make course adjustments in a timely manner."2

The third key is to know how the institution's revenue is generated. Physicians are the key to revenue, and management should be actively involved in physician service, retention, and recruitment. This will allow management to accurately predict volume from admissions and subsequent revenue.

Finally, the last key is to have a contingency plan in effect to c

Some common words found in the essay are:
CFO CEO, CEO CFO, Larry Scanlan, budget reality, budget process, actual results, operating margin, corrective action, ceo cfo,

Approximate Word count = 474
Approximate Pages = 2 (250 words per page double spaced)

Category: Miscellaneous

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