A budget is defined as a financial statement prepared and approved in the estimation of income and expenses over a specific period of time and is re-evaluated on a periodic basis. Budget preparation and implementation are essential for the optimal development of an organization. Hospitals is a service-oriented industry hence to achieve targets best management skills, finance, and technology are required.
Types of Budgets:
Budgets are of two types. They are
- Short term budget
- Long term budget
The main objectives of the Hospital pharmacy budget are:
- Development of standards for actual performance.
- Comparison of actual results with standard results thus identifying the deviations.
- Subsequent analysis of these deviations to determine whether they can be implemented or not.
- It helps in the development of better financial planning.
- It helps to focus on hospital priorities.
- It helps in making secured financial strategies and decisions.
- It can reduce wastage and losses to the maximum extent.
- It helps in getting ensure profits in productivity.
- It provides guidance for the smooth and efficient working of the hospital department in the hospital.
Preparation of Budget:
Every budget consists of three separate parts they are:
- Revenue accounts or income accounts.
- Expense accounts.
- Capital equipment accounts.
1. Income Accounts or Revenue Accounts:
- This budget is maintained by either the pharmacy department or the financial department.
- This is maintained on a daily, weekly, or monthly basis based on the cost of the patient’s prescriptions and requisition orders.
- The other statistics include:
- Prescription volume per hour of service.
- Number of prescriptions dispensed per hour.
- Average drug cost per prescription.
- Average supply cost per requisition.
- Hours of service.
- It is also based on the patient’s ability to pay i.e. full payment, part payment, or non-payment.
2. Expense Accounts:
Expenditure accounts are divided into four categories. They are:
- Administration expenses
- Professional care expenses
- Emergency & outpatient expenses.
- Other expenses.
The contents include:
a) Administrative Accounts:
Salaries and wages: Salaries and wages are given according to permanent and academic staff. For convenience, they are categorized into:
- Administrative Staff
- Professional staff
- Non-professional staff
- Part-time staff.
Once salary is determined for each employee the overtime pay, salary hike, etc are determined.
b) Professional Care Expenses:
- Supplies and materials: Many drugs and pharmaceutical supplies are dispensed by prescriptions. Some drugs and other materials used at OP, Emergency, and OT departments should also be charged.
- Expenses on Interiors: A separate part of the total budget should be kept aside for the development of pharmacy interiors that are to be maintained according to the norms. The equipment like computers, A/C’s, Telephones, and Furniture should also be included.
c) Emergency and Patient Expenses:
This is mainly based on services provided by the hospital. At times during emergencies, all supplies cannot be charged because of the conditions. Hence a separate budget should be maintained.
d) Other Expenses:
These expenses should be included in the prescriptions purchased from outside pharmacies. Expenses on other materials include glassware, stationary, narcotics, alcohol permit fees, printers, books, repairs, etc.
3. Capital Account Expenses:
A separate budget should be prepared for this in the hospital. If the department is to be involved in any expansion program of service i.e. opening of a new wing, renovation, etc. then the cost of materials and supplies should be kept in a separate paper and is included in capital accounts expenses.
The cost of purchase of new equipment should also be included in it.
The implementation of the budget is mainly based on:
- Utilization of budget on individual activity.
- Utilization of budget on group activity.
- Department-wise utilization of the budget.
- Emergency-based utilization of the budget.
- Budget based on need.
Make sure you also check our other amazing Article on: Pharmacy and Therapeutic Committee