Ask the payment expert ... about administrative financial knowledge
Patricia Boyer, MSN, NHA, RN
How important is it for department managers to understand financial information?
Sometimes we see administrators who want to keep financial information to themselves and then wonder why they are not successful. It is essential to your facility's success that all department managers know enough financial information to assist them in doing their job.
One important tool is the Income Statement, also called the Profit and Loss Statement (P&L).
Any revenues or expenses that you expect a manager to help with successfully needs to be shared monthly. Best practice breaks down this information in total dollars, and dollars per patient day (PPD).
If that tool also reflects monthly and year to date (YTD) data, the manager becomes a partner in financial success. You also need to teach them how to calculate PPDs.
Don't forget labor data reports. Department managers should get labor reports each payroll period. With this tool, they can monitor whether they are meeting their operational goals for cost as well as hours. In addition, this allows the manager to monitor which employees are receiving overtime, especially those receiving overtime on a consistent basis.
They can use this information to investigate why the overtime is occurring. It may be that the employee who consistently receives overtime has become dependent on it. That type of behavior needs to be changed. It's also possible the workload needs to be evaluated.
Monitoring staffing on a daily basis can decrease overtime. Too often we have expectations of our managers but fail to give them the right tools. Teach them how to assist in your success and then hold them accountable.