Every business plan includes a budget. A nursing home budget should cover a myriad of income and expenses that cover operations, staffing, medical equipment, housing and all the furnishings, insurance, licenses and marketing. The Agency for Healthcare Research and Quality, a division of the U.S. Health and Human Services department, recommends that nursing homes include plans for various projects and activity programs in their budget plans as well. Available technology, in-house staffing capabilities and funding sources also need to be taken into consideration when planning programs, budgets and nursing home parameters.
Nursing home owners and administrators must include detailed projections in their budgets to cover maintenance of the facilities in addition to mortgage and insurance payments. Typically 25 percent of a nursing home's budget is utilized for buildings and the systems that run them. Include regular maintenance, such as utilities and upkeep, as well as upgrades and repairs in as much as you can predict those events. To remain viable and continue to provide a safe environment for the residents, a nursing home must pay close attention to facility management. Look at maintenance projections that will be necessary in the current budget as well as estimates for five and 10 years out to get a clear picture of your requirements. An analysis of your existing facilities and their current condition includes build-out plans and upgrades that will be needed for growth and accommodating new programs.
Start-up nursing home owners should consider investing in technology that will enable them to participate in the electronic records revolution that has enveloped the healthcare industry. Rather than working with older systems and trying to integrate new models, spend the money upfront to see the saving in the long run. About $20,000 in the budget will provide for a completely web-based electronic medical reporting system from companies such as Keane. An integrated software design also will help you track maintenance schedules, keep payroll, billing and vendor accounts.
Federal regulations mandate the number of hours each resident must be cared for by professional healthcare staff. Studies performed by various watchdog groups indicate that the higher staffing ratio of resident to staff, the higher quality of care. Minimum standards set forth by the Department of Health and Human Services require nearly four hours of care for each resident per day by a healthcare professional. In that time, a nursing assistant can provide two of the hours of care, while a registered or licensed nurse must provide at least one hour of care. To maintain licensing, these minimum staffing levels must be included your staffing budget, which may require as much as 40 or 50 percent of your total expenditures.
Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."