MHR 849 Lecture Notes - Lecture 2: Information Overload, Human Resource Management, Human Capital

HOME CARE Scenario Type of care provided Scenario Question 1 Question 2 Care in this capacity can range from a short-term to long-term based upon the changing needs of the patient. Patient age can range from pediatric to elderly. Care can be provided in the patient’s private home, group home, or assisted living setting. Medical homes fall into this category and are a new focus of Accountable Care Organizations through the Affordable Care Act of 2010. Review your current budget. Taking this information into account, what are some strategies you would use to identify resources to focus on improving efficiency and meeting customer expectations during this time? What do you see as the biggest financial issues of your organization? Hint: You are a nonprofit organization—so look at your means of funding and the relationship this has on your ability to treat patients and hire new staff. How will you address this financial issue? In home care, a patient is visited at home by a nurse or nursing assistants with activities of daily living (ADL), wound care, IV therapy, etc. These organizations can be nonprofit or for-profit. A physician supervises the care with the assistance of RNs or LPNs and certified nursing assistants (CNAs). You are a new administrator for a home health agency that is a national nonprofit organization that serves the surrounding Phoenix community. The agency has been recognized for the delivery of on-time quality services for a number of years. It is known to employ only the top staff within the community, but in recent months staffing numbers have dropped dramatically and you, as the agency’s administrator, have found yourself in a position where your facility is short staffed. You are unable to admit any additional patients unless you are able to have your staff work over time. Budget Considerations Operational Budget – This budget focuses on a broader view of the total operations of the organization in which all departments are reviewed for both their income potential and the costs associated with the work activities used to generate projected revenues. Each department will have its own budget for the managers to follow and on which to base the activities of the department in order to meet its contribution to the total revenues and the associated costs of the organization. Dietary Services – This is a departmental budget focused on the costs and potential reimbursement for the organization. The operation is overseen by a dietitian or nutritionist who is responsible for supplying the nutritional needs of the patients within their care. This department may utilize the services of several consultants or contract this service to an outside organization. Medical Supplies – This budget is focused specifically on the requirement-based services being delivered by the hospital professional, which are often referred to as nondurable disposable items. This budget includes specific items for the surgeon or professional performing the services. These may include such things as oxygen supplies, diabetic supplies, ostomy supplies, bandages, and related supportive items. These items are generally manufactured for one-time use. They are not reused due the inability to sterilize them. The items that are reusable are classified under capital assets and have a use-time identified with the specific piece of equipment. Human Resources – This budget indicates the finances needed to support the organization’s objectives, from a personnel perspective. Full-time equivalent (FTE) calculations are used to project the personnel budget. These individuals could include nonskilled labors to professional licensed physicians and various job descriptions within the categories. In addition to listing the FTEs, the associated benefits of the FTEs would be projected within this department for each FTE within the organization. This will generally include line items for consultants and temporary positions based on the needs of the organization. Departmental Costs – This budget focuses on the specific department and its overall needs, costs, and potential revenue in relation to the overall goals of the organization’s strategic plan. The manager’s primary responsibility is to monitor the operational efficiency of the department, including all areas that directly impact and support the generating of revenue for the organization. Managers may be required to present an analysis of the weekly or monthly operational analysis to the Chief Financial Officer of the organization or a lead manager. Vendor/External Suppliers – Health service organizations have special needs and may require certain external items and/or services. Most organizations have projected budgets to include the purchase of supplies and services for outside contractors (vendors) who specialize in installation, monitoring, and the repair of specialized equipment or technology being utilized by the specific health care delivery system. Maintenance/Facility Operations – This departmental budget focuses on the overall upkeep of the building and the related equipment and machines to provide a safe and comfortable environment for both the patients and workers. This budget includes all FTEs and may also include line items for consultants and outside sources based on needs of the facility.

Revenue 2011 2012 2013

Donations 50,000 55,000 75,200

Grants and Foundations 100,000 80,500 125,780

Government Grants 947,280 878,000 695,120

Interest Expense 6,050 8,000 10,000

Total 1,103,330 1,021,500 906,100

Expenses 2011 2012 2013

Health Center 2,482,845 2,558,265 2,668,951

Administrative Staff 100,000 110,000 125,000

Professional Staff 80,000 100,000 150,000

Family/Youth Services 214,888 210,987 230,985

General Management/Admin140,000 152,000 159,000

Total 3,017,733 3,131,252 3,333,936

Budget Spreadsheet

Type of care provided

Care in this capacity can range from a short-term to long-termbased upon the changing needs of the patient. Patient age can rangefrom pediatric to elderly. Care can be provided in the patient’sprivate home, group home, or assisted living setting. Medical homesfall into this category and are a new focus of Accountable CareOrganizations through the Affordable Care Act of 2010.

Scenario

In home care, a patient is visited at home by a nurse or nursingassistants with activities of daily living (ADL), wound care, IVtherapy, etc. These organizations can be nonprofit or for-profit. Aphysician super- vises the care with the assistance of RNs or LPNsand certified nursing assistants (CNAs).

You are a new administrator for a home health agency that is anational nonprofit organization that serves the surrounding Phoenixcommunity. The agency has been recognized for the delivery ofon-time qual- ity services for a number of years. It is known toemploy only the top staff within the community, but in recentmonths staffing numbers have dropped dramatically and you, as theagency’s administrator, have found yourself in a position whereyour facility is short staffed. You are unable to admit anyadditional patients unless you are able to have your staff workover time.

Question 1

Review your current budget. Taking this information intoaccount, what are some strategies you would use to identifyresources to focus on improving efficiency and meeting customerexpectations during this time?

Question 2

What do you see as the biggest financial issues of yourorganization? Hint: You are a nonprofit organiza- tion—so look atyour means of funding and the relationship this has on your abilityto treat patients and hire new staff. How will you address thisfinancial issue?

Budget Considerations

Operational Budget – This budget focuses on a broader view ofthe total operations of the organization in which all departmentsare reviewed for both their income potential and the costsassociated with the work activities used to generate projectedrevenues. Each department will have its own budget for the managersto follow and on which to base the activities of the department inorder to meet its contribution to the total revenues and the asso-ciated costs of the organization.

Dietary Services – This is a departmental budget focused on thecosts and potential reimbursement for the organization. Theoperation is overseen by a dietitian or nutritionist who isresponsible for supplying the nutritional needs of the patientswithin their care. This department may utilize the services ofseveral consultants or contract this service to an outsideorganization.

Medical Supplies – This budget is focused specifically on therequirement-based services being delivered by the hospitalprofessional, which are often referred to as nondurable disposableitems. This budget includes specific items for the surgeon orprofessional performing the services. These may include such thingsas oxygen supplies, diabetic supplies, ostomy supplies, bandages,and related supportive items. These items are generally manu-factured for one-time use. They are not reused due the inability tosterilize them. The items that are reusable are classified undercapital assets and have a use-time identified with the specificpiece of equipment.

Human Resources – This budget indicates the finances needed tosupport the organization’s objectives, from a personnelperspective. Full-time equivalent (FTE) calculations are used toproject the personnel budget. These individuals could includenonskilled labors to professional licensed physicians and variousjob descriptions within the categories. In addition to listing theFTEs, the associated benefits of the FTEs would be projected withinthis department for each FTE within the organization. This willgenerally include line items for consultants and tempo- rarypositions based on the needs of the organization.

Maintenance/Facility Operations – This departmental budgetfocuses on the overall upkeep of the building and the relatedequipment and machines to provide a safe and comfortableenvironment for both the patients and workers. This budget includesall FTEs and may also include line items for consultants andoutside sources based on needs of the facility.

Vendor/External Suppliers – Health service organizations havespecial needs and may require certain exter- nal items and/orservices. Most organizations have projected budgets to include thepurchase of supplies and services for outside contractors (vendors)who specialize in installation, monitoring, and the repair ofspecialized equipment or technology being utilized by the specifichealth care delivery system.

Departmental Costs – This budget focuses on the specificdepartment and its overall needs, costs, and po- tential revenue inrelation to the overall goals of the organization’s strategic plan.The manager’s primary responsi- bility is to monitor theoperational efficiency of the department, including all areas thatdirectly impact and support the generating of revenue for theorganization. Managers may be required to present an analysis ofthe weekly or monthly operational analysis to the Chief FinancialOfficer of the organization or a lead manager.

Budget Spreadsheet

Read the Opening Case at the beginning of Chapter 5: Forecasting the Future.

Answer the two critical-thinking questions at the end of the case. Since much of this assignment will

incorporate your insights with the reading of the case, you will also be expected to demonstrate your

comprehension of the HR concepts, trends, issues, and practices that you have been learning in this

course in the way that you answer the question.

Below is a brief summary (without prominent details) of the case:

Case Summary

Information plays a vital role in all organizational activities. Marketing managers need information about

customer preferences and competitor’s products. Operations managers need information about

inventories and product demand. Financial managers need information about interest rates and cash

flows. And human resource managers need information about all of these areas so they can ensure they

have the right employees with the right skills in the right places at the right times.

Consider, for example, three recent developments related to employment in the United States. In one,

major employers in the U.S. pharmaceutical, financial services, and energy sectors cut more than

100,000 jobs in 2014 and 2015. these cuts were due to industry slowdowns and corporate

restructuring. But surprisingly, some of the cuts were also related to improvements in the economy. On

the other hand, during the last three months of 2015 and again in 2016, following an annual ritual, major

U.S. retailers and related businesses announced that they were planning to hire hundreds of thousands of

temporary workers for the holiday season. Finally, Starbucks recently announced a long-term plan of

increasing its global workforce from around 200,000 now to over 500,000

Think It Over

1) What industry sectors are most likely to add jobs during a down economy? What industry sectors

are most likely to add jobs during an improving economy? In each instance, explain your

reasoning.