HSC Weekly 2009-05-15
Hospitals open up budget process to employee participation
Wider participation in decision-making will be a key part of developing the capital budget for USC University Hospital and USC Norris Cancer Hospital for the new fiscal year beginning July 1.
Calling the new capital budget process a big organizational change, Jonathan Spees, hospital chief financial officer, contrasts the previous, mostly top-down process with the new process that will involve a cross section of the organization in making capital budget allocations.
In addition to being more inclusive, the process also will be more objective, Spees said, with established criteria and a rating system for ranking all capital requests.
Each department will submit its budget request for capital items that cost more than $5,000.
Department heads will collaborate with physicians and staff to create the departments request, Spees said. Its important for everyone to offer ideas and to contribute.
A new Resource Allocation Committee, chaired by Spees, will include physicians and staff leadership from key departments such as nursing. The committee will review and rank all capital requests, and develop a capital spending plan for the year.
Departmental capital requests will be rated and ranked on these criteria:
Strategic impact
Impact on safety
Measurable quality impact
Financial return
Customer impact.
The Resource Allocation Committee will use a participative process to establish the ratings, debating the relative merits of various projects.
Its a good opportunity for each of our committee members to call upon himself or herself to be objective and to make decisions to benefit the community, Spees said. Well need to challenge ourselves to be impartial in deciding whats good for the enterprise, not just defending our parochial interests.
Within the limits of available funds, requests will be funded in the order in which they are ranked. While the amount available for capital spending is substantially higher than in recent years, there are still constraints, Spees said.
One of the goals of the Resource Allocation Committee is to get people to think and make the connection between the hospitals net income and funds available for capital spending, Spees said. He predicts positive outcomes when everyone makes the connection between decisions made on the operating side and dollars available to buy equipment and invest in facilities.
The formal capital budget process will begin on July 1, and managers will make presentations supporting their budget requests during August. The approved spending plan is expected to be in place by mid-September.
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