NURS FPX 6216 - Assessment 4_ Preparing and Managing a Capital Budget (1)

Preparing and Managing a Capital Budget

Capital acquisition

NURS FPX 6216 – Assessment 4 Preparing and Managing a Capital Budget

Creating and managing a capital budget by acquiring capital to expand a health care organization and its units or department is critical in positive growth. The process includes acquiring finances, analyzing assets, and creating a strategic plan to acquire resources and assets (Kengatharan, 2018). The purpose of this paper is to create a capital acquisition budget for renovating a nurses’ lounge in a 50-bed, step-down unit to reduce turnover rate and increase nurse satisfaction. The scope of renovation includes better opportunities for health care to retain employees, reduce burnout and stress, increase comfort, aesthetics, capacity, and amenities to increase quality care and patient satisfaction (Salmela et al., 2020). 

Look of renovated lounge

It is important to place and expand the lounge near the restroom, clear routing passages, and critical units to increase quick access (San Martin et al., 2020). The lounge will include a cafeteria, game room, aroma and other therapy room, power nap rooms with sound and light control, comfortable sofas and chairs, pleasing to eye wall scenery, television, and food station (Salmela et al., 2020). 

Timeline for the project, accuracy and complete description of the renovation

The process will not cross a six months deadline as it includes 3 months for expansion and construction of lounge, one month for interior designing, and one month for acquiring different materials including beds, chairs, and equipment, and 15 days to install, arrange, and redesign the place aesthetics if necessary. The budget will be followed to accurately implement the design including visual, aural, and other positive simulation designs (Nejati et al., 2016). The lounge should look as it is planned where the renovation should not affect the normal operations of other units (Salmela et al., 2020). For time-being different restroom and lounge area was created.    

NURS FPX 6216 – Assessment 4 Preparing and Managing a Capital Budget

Assumptions, knowledge gap, and areas of uncertainty 

    The renovation is based on three assumptions. The first assumption is renovation will not increase health care cost significantly. The second assumption is it will benefit both patients and nurses. The third assumption will not affect the normal operations of health care (Nejati et al., 2018). 

Justifying the need for the capital acquisition

The relationship between lounge renovation and organization’s goals and mission

There are six reasons to justify the need for capital acquisition. The first reason is varying and fixed costs of renovation can affect the timely lounge renovation process (Dal Mas et al., 2020). The second reason is failing to acquire capital results in increased turnover rate, lower nurse satisfaction, and increased burnout leading to errors. This will further increase errors leading to increased health care cost (Hardeman & Kahn, 2020). The third reason is capital acquisition helps in better design and renovation, which is critical in the successful allocation of budget to different aspects (Dal Mas et al., 2020). The fourth reason is related to analyzing the benefits of the lounge on an organization’s mission and values to achieve a better outcome. The fifth reason is capital acquisition reduces the burden on health care finances (Hardeman & Kahn, 2020). The sixth reason is capital acquisition highlights the need for improvement and provides cost-benefit analysis for decision-making and innovation (Huang et al., 2020). 

Lounge Renovation Cost in USD
Furniture 
Sofas $12,000
Chairs$3500
Coffee tables$5000
Stackable Side Chairs$2000
Carrels with facilities$15000
Side Table$6000
Conference Table$12000
Task Chair w/ Arms$9500
Zero Gravity Chairs$3500
Equipment 
Desktop Computers$10000
TV wall mounted$3000
Refrigerator, full-size$1500
Coffeemaker w/ Hot Water$1000
Microwave$1000
Charging stations$300
Food and drink dispenser units (contract companies)$0
Units 
Power-napping rooms with built-in Murphy beds and sound and light control$45000
Game room$90000
Therapy room$45000
Miscellaneous equipment$26500
Indirect expenses$5000
Construction cost including labor and equipment$100,000
Total $3,96,800

NURS FPX 6216 – Assessment 4 Preparing and Managing a Capital Budget

Pros and cons of alternative perspectives

The pros of the lounge renovation process are it creates a sense of protection and care among nurses and health care professionals, which is essential in increasing job satisfaction and productivity (Nejati et al., 2018). Further, the lounge helps reduce stress among nurses as it includes a power nap room, game room, and other relaxing facilities (Nejati et al., 2016). Brief time-off from the work is essential in increasing throughput and reducing work-related burnout (Salmela et al., 2020). Restroom and serenity rooms were found to be beneficial in improving cognitive and psychomotor abilities (San Martin et al., 2020). The cons of the lounge renovation include disturbance during the renovation process (Siddiqui et al., 2015), unnecessary visits to the lounge room, the possibility of increased activities and increased stay in the lounge room (Nejati et al., 2018), and conflict between employees to use the same services (Siddiqui et al., 2015). 

NURS FPX 6216 – Assessment 4 Preparing and Managing a Capital Budget

Prepared capital budget

Assumptions, knowledge gap, and areas of uncertainty

The budget has included $50000 to cover contingency and indirect expenses, which makes the total minimum budget of $4,46,800. The plan is based on assumptions that the cost will not vary significantly, there will be no hazards, contingencies and indirect expenses do not cross the limit, and strict adherence to renovation deadline (Dal Mas et al., 2020). Availability of data related to the cost of renovation of nurses’ lounges in other health care facilities, and units would have aided in understanding the better budget analysis and acquisition. 

Process for calculating cost, cost control methods, and collaboration to calculate the cost

Cash flow analysis, cash flow budget, and capital budget processes were used to calculate the cost (Dal Mas et al., 2020). The cost included for each budget item was considered as a unit and current market cost was considered. For example, cost 6 chairs were considered as a unit and the total cost was calculated per unit. Cost controlling methods used were supply chain consolidation, purchasing from primary sources by collaborating with them and stakeholders (Ageron et al., 2018), cost and benefit-based decision-making, appraisal of the predetermined target, performance-based wages for construction, project change control, and tracking the outcome (Oyegoke et al., 2021).  

NURS FPX 6216 – Assessment 4 Preparing and Managing a Capital Budget

Questionable data and effects of discrepancies on calculations

Two data or information seemed to be questionable. The first information is the effectiveness of wages where construction and design agencies try to complete or drag the work till the deadline to get more credit. The second data is related to the use of therapies by nurses as they might not get enough time for it (Nejati et al., 2018). Further, very small discrepancies in calculation can increase the cost by a significant amount (Huang et al., 2020). 

Plan for budget management, collaboration to manage budget and budget variances

For better management, a project team will be created, which includes representatives from different stakeholders including suppliers, nurses, administration, data analyst (Tabari et al., 2019), finance management, nurse leader, and nurse manager (Nejati et al., 2016). A shared decision-making model will be adopted to increase collaboration, communication, project analysis, fiscal success, and process tracking to find any variances and implement strategic plans to mitigate them (Siddiqui et al., 2015). Further, communication between financial and administration staff will be increased by setting up meetings to discuss and manage the project (Nejati et al., 2016). 

NURS FPX 6216 – Assessment 4 Preparing and Managing a Capital Budget

Effects of renovation on the financial health of the organization

The nurses’ lounge renovation process will increase the sense of care in nurses as different studies highlight that organization’s that have serenity rooms, nurses’ lounge, and better restrooms (Salmela et al., 2020; San Martin et al., 2020; Siddiqui et al., 2015). Further, game rooms, therapy rooms, and cafeteria help the nurses to regain strength, cognitive abilities, and resilience, which is critical in reducing health care errors, increasing quality care, and managing work-life balance (Nejati et al., 2016). As a result, patient satisfaction also increases. This will result in reduced burnout and turnover rate (Nejati et al., 2018). As the organization considered nurses’ interest, job satisfaction and nurse’s trust in the organization increases (Siddiqui et al., 2015). The effects can be visible in productivity as well and administrators should consider depreciating values of the equipment and facilities to manage the lounge periodically.   

NURS FPX 6216 – Assessment 4 Preparing and Managing a Capital Budget

Assumptions, knowledge gap, and areas of uncertainty

Two of the important knowledge gaps that can help in improving the positive effects of the budget, renovation, and management are knowledge related to nurse’s behaviour and sense of responsibility to make use of resources effectively and managing schedule and resources in health care (Nejati et al., 2018).  

References

Ageron, B., Benzidia, S., & Bourlakis, M. (2018). Healthcare logistics and supply chain – issues and future challenges. Supply Chain Forum: An International Journal19(1), 1-3. https://doi.org/10.1080/16258312.2018.1433353

Dal Mas, F., Piccolo, D., Edvinsson, L., Skrap, M., & D’Auria, S. (2020). Strategy innovation, intellectual capital management, and the future of healthcare: the case of Kiron by Nucleode. Contributions To Management Science, 119-131. https://doi.org/10.1007/978-3-030-40390-4_9

Hardeman, A., & Kahn, M. (2020). Technological innovation in healthcare: disrupting old systems to create more value for African American Patients in Academic medical centers. Journal Of The National Medical Association112(3), 289-293. https://doi.org/10.1016/j.jnma.2020.03.003

Huang, H., Leone, D., Caporuscio, A., & Kraus, S. (2020). Managing intellectual capital in healthcare organizations. A conceptual proposal to promote innovation. Journal Of Intellectual Capital22(2), 290-310. https://doi.org/10.1108/jic-02-2020-0063

Kengatharan, L. (2018). Capital Budgeting Theory and Practice: A review and agenda for future research. American Journal Of Economics And Business Management1(1), 20-53. https://doi.org/10.31150/ajebm.v1i1.5

Nejati, A., Rodiek, S., & Shepley, M. (2018). Using visual simulation to evaluate restorative qualities of access to nature in hospital staff break areas. Landscape And Urban Planning148, 132-138. https://doi.org/10.1016/j.landurbplan.2015.12.012

Nejati, A., Shepley, M., Rodiek, S., Lee, C., & Varni, J. (2016). Restorative design features for hospital staff break areas. HERD: Health Environments Research & Design Journal9(2), 16-35. https://doi.org/10.1177/1937586715592632

Oyegoke, A., Powell, R., Ajayi, S., Godawatte, G., & Akenroye, T. (2021). Factors affecting the selection of effective cost control techniques in the UK construction industry. Journal Of Financial Management Of Property And Constructionahead-of-print(ahead-of-print). https://doi.org/10.1108/jfmpc-07-2020-0050

Salmela, L., Woehrle, T., Marleau, E., & Kitch, L. (2020). Implementation of a “serenity room”. Nursing50(10), 58-63. https://doi.org/10.1097/01.nurse.0000697160.77297.06

San Martin, L., Walsh, H., Santerre, M., Fortkiewicz, J., & Nicholson, L. (2020). Creation of a “patient” hospital escape room experience to reduce harm and improve quality of care. Journal Of Nursing Care Quality36(1), 38-42. https://doi.org/10.1097/ncq.0000000000000485

Siddiqui, Z., Zuccarelli, R., Durkin, N., Wu, A., & Brotman, D. (2015). Changes in patient satisfaction related to hospital renovation: Experience with a new clinical building. Journal Of Hospital Medicine10(3), 165-171. https://doi.org/10.1002/jhm.2297

Tabari, M., Memariani, A., & Ebadati E., O. (2019). Developing a decision support system for big data analysis and cost allocation in national healthcare. Healthcare Data Analytics And Management, 89-109. https://doi.org/10.1016/b978-0-12-815368-0.00003-8

NURS FPX 6216 – Assessment 4 Preparing and Managing a Capital Budget