1. Barter, Marjorie EdD, RN

Article Content

Health Care Financial Management for Nurse Managers: Merging the Heart With the Dollar"1 gives an overview of essential financial principles and concepts, whereas the complementary text, "Health Care Financial Management for Nurse Managers: Applications in Hospitals, Long-term Care, Home Care and Ambulatory Care,"2 provides a ready reference with detailed information on issues related to administrative practice in different healthcare settings. These texts, coauthored from the perspective of a chief nurse executive and chief financial officer, were intended for graduate students in nursing administration programs but will be a very useful addition to the library of nursing managers and executives in all healthcare settings. Together, the texts not only provide a focus on budgeting but also include comprehensive discussions on the interrelationship of economics, staffing, productivity, information systems, and financial management of complex healthcare systems. This review discusses each text in turn, beginning with "Merging the Heart With the Dollar."1


The first 5 chapters serve as supplemental material covering leadership-management content found in textbooks that are currently available for undergraduate or graduate courses. They provide a reference for organizational and leadership issues and help orient the reader to trends that influence our view of healthcare delivery and our role in financial management.


Healthcare and the Economy

The next section, devoted to healthcare and the economy, provides a very good overview of the evolution of the American healthcare system. This historical perspective, beginning in the colonial period and emphasizing legislative and economic trends, is a "must read" for administrators who are leading organizations into the 21st century. A section devoted to the evolving relationship of employer-driven insurance coverage and healthcare economics provides context to the modern healthcare system. The balance of technology and politics and the effect on healthcare expenditures is described with a perspective on managed care. Breakout boxes and well- constructed tables help the reader make sense of the various federal regulations. The author also provides a ready reference for details relating to private insurance models of payment, as contrasted with Medicare, Medicaid, and Health Maintenance Organization models. Definitions of insurance terms are included for readers who are unfamiliar with industry definitions. This section of the text will be particularly useful to graduate students and younger nursing managers who are entering administrative practice.


Information Systems

The section on information systems gives an overview of the integration of informatics with clinical and administrative practice. Graduate students who do not have an informatics course will appreciate this summary of information technology and data management. Many practicing administrators completed a program of study before informatics content was widely integrated into graduate study, so the introductory content and the discussion of databases such as CINAHL, PubMed, and Cochrane will be useful. The chapter, written by healthcare librarians, clearly and concisely explains how to access the sources of information for evidence-based practice and differentiates the usefulness of various types of studies. A section on information vendors with Web sites and descriptions for major online databases of books and journals will assist the readers to better utilize scarce resources. Readers who want a more comprehensive discussion will want to add an informatics text or current journals to their library.


Budgeting Principles

Principles of budgeting, variance calculation and analysis, and the relationship of cost to reimbursement are comprehensively discussed with careful definitions and examples of budgeting terms so that the readers are able to access information according to their needs. The novice manager will want to read all the introductory information, whereas the experienced administrator will appreciate the organization of budget concepts for ready reference so that the discussions of complex and advanced principles and techniques can be reviewed readily. Analysis of variance is one of the most critical activities for an administrator, and the chapter on budget variances has a comprehensive discussion of variance calculation according to the types of variance with suggestions to determine the cause and appropriate remedy. The relationship between costs, charges, and payment is fully explored with examples of cost determination methods and a focus on the nurse manager's role in managing costs.


Three chapters are devoted to budget strategies for meeting organizational objectives in a competitive marketplace. The discussion of strategic management includes situation analysis and techniques for the formation, deployment, and evaluation of strategy. Useful techniques for collecting and displaying data are illustrated. The chapter on case management is included as an example of a strategy to manage scarce resources.


Accounting and Financial Analysis

The chapters on accounting and financial analysis provide introductory material for nurses at executive level positions. Middle managers will also find the material helpful in understanding the interface of operations and finance from the business perspective. Basic principles and techniques are discussed with definitions provided for simple accounting functions.


Three examples of financial statements illustrate their use and provide a framework for nurses to participate in financial decisions. Techniques for financial ratio analysis include five key financial ratios with clear examples to illustrate calculations and the significance of particular ratios.


The final section is devoted to a comprehensive discussion of workload management.


Chapters on patient classification systems, staffing, and productivity give a framework for evidence-based staffing. Techniques for workload measurement are compared. The section on patient classification systems includes a historical perspective and a rationale that will help managers explain to the staff why these systems are useful. Detailed information on the various methods used to quantify the work of nursing while ensuring the validity, reliability, and sensitivity of patient classifications are enhanced by tables and exhibits illustrating complex concepts. An insightful section that reviews threats to the validity of acuity systems and the limitations to the use of these systems will be most helpful to nursing administrators. An update on trends such as the California Staffing Ratios legislation and collective bargaining efforts related to workload measurement completes the comprehensive section on patient classification.


The final chapters cover staffing and productivity. Information on the use of the different levels of nursing care providers, from unlicensed personnel to advanced practice nurses in various care delivery models, will help managers design more efficient and effective staffing methods at the unit level.



The second text, Health Care Financial Management for Nurse Managers: Applications in Hospitals, Long-term Care, Home Care and Ambulatory Care,"2 is an essential reference for managers in those settings or for executives who have responsibility across the continuum of care.


The first section is devoted to issues common to acute hospital. Introductory material on the classification of hospitals and resulting implications of particular classifications provides context for the financial strategies used by modern hospitals. Efforts to manage utilization and quality by methods such as case management, critical pathways, and root cause analysis are documented with sufficient detail, with well-designed tables and exhibits, to assist the novice reader in understanding unfamiliar material.


The first 3 chapters are designed to provide the inpatient unit manager with specific details and tools for constructing a budget and a comprehensive staffing plan. Detailed worksheets and exhibits illustrate how to use basic historical data to project labor budgets. Acuity-based flexible budget calculation is featured in a comprehensive chapter that clearly explains variable, fixed, and overhead costs. A step- by-step process for developing a budget for salaries and for other items such as supplies is included. This section complements and augments the material found in the first text, "Merging the Heart With the Dollar,"1 with some redundancy; however, because the prospect of constructing a budget is overwhelming for new managers, the redundancy may be a welcome feature for these readers. Experienced administrators can use the text to help coach and mentor new managers.


Long-term Care

Most nurse managers currently work in acute care settings and are unfamiliar with the financial and regulatory issues in long-term care. Three chapters devoted to these issues will be an invaluable resource. A review of the types of facilities and the regulatory standards and procedures for accreditation provides a framework for the budgetary processes specific to long-term care management. The use of the Resident Assessment Instrument, the Minimum Data Set, and the Resource Utilization Groups is explained in sufficient detail for the unfamiliar reader and is followed by a detailed discussion of the use of these coding systems to facilitate proper reimbursement.


Home-care reimbursement and financial management issues are introduced with a historical perspective on the industry and a review of the benefit structure. A section outlining types of services and agency characteristics will help the reader to form an understanding of the issues. Construction of the budget is detailed with examples for different types of agencies. Sections on budget defense and variance analysis are brief and serve to augment information found in "Merging the Heart With the Dollar."1


Ambulatory Care

The final 2 chapters are devoted to ambulatory care issues, specifically nurse practitioner reimbursement and budgeting. As with the other sections of the text, a discussion of the types of ambulatory clinics, regulatory and credentialing requirements, and contractual issues serves to orient the novice manager to this setting. This introductory information is followed by a detailed discussion of reimbursement, billing, and operational procedures to ensure financial viability. Billing forms and procedural codes are discussed with examples. Sample forms for contracts, credentialing, patient consent, billing, and charting included in the appendix will be useful to nurse practitioners and managers. The final chapter, devoted to reimbursement issues and budgeting techniques specific to clinics, has several exhibits that clearly illustrate specific clinic budgeting methods. Managers in these settings will find the information to be easily accessible and useful.



Health Care Financial Management for Nurse Managers: Merging the Heart With the Dollar1 and the accompanying text, "Health Care Financial Management for Nurse Managers: Applications in Hospitals, Long-term Care, Home Care and Ambulatory Care,2 contain essential information on budgeting, costing, accounting and financial analysis, staffing, and productivity with application examples throughout the continuum of care delivery. I would recommend these texts as a very useful addition to the library of nursing administrators and graduate students.




1. Dunham-Taylor J, Pinczuk JZ. Healthcare Financial Management for Nurse Managers: Merging the Heart With the Dollar. Boston: Jones and Bartlett Publishers; 2006. [Context Link]


2. Dunham-Taylor J, Pinczuk JZ. Healthcare Financial Management for Nurse Managers: Applications in Hospitals, Long-term Care, Home Care and Ambulatory Care. Boston: Jones and Bartlett Publishers; 2006. [Context Link]