Many of you follow a budget for your household expenses. Most financial experts will tell you one of the most important things you can do to live within your means is to set a budget and stick to it.
The same is true of a hospital. We are working on our Fiscal Year 2013 budget at GVMH. Our fiscal year begins April 1 and we are heavy into the budget process. Department Directors are meeting with their respective Administrative Team member and Finance over the next week to examine projected volume for the department, FTE needs, departmental operating expenses and capital expenditures.
This first step provides our foundation and the final budget rarely resembles what happens during this first stage. The difficult aspect of the budget begins after this first step ends. The difficult aspect of budgeting is determining what we can actually afford versus what we “want” to afford.
There are guiding principles that help set our course for what does and does not make the final budget. First our Mission is considered. If an expenditure or service does not fit within our Mission it is eliminated. Second, our strategic plan guides us. If our strategic plan identifies a specific action or service critical to our success or necessary to the needs of the community we serve it will make it to the final draft. Third, the opportunity to grow or expand existing services that provide benefit to the organization and community receives strong consideration. Finally, do we have the resources to do what we want to do as opposed to what we have to do. Something may be meaningful and may provide benefit to the organization but isn’t core to what we do. An item like this will only make the final cut if, and only if, we have met our basic needs as an organization.
In the end it’s a lot like your budget at home. If you budget $200 per month for food you can buy enough groceries to feed you for a month or you can eat out at a fancy restaurant once. Sometimes the choices are easy!