Factors Impacting the Nursing Budgeting Process


The establishment of a budget is a critical process for modern companies because it helps to understand and evaluate revenues and expenses for a certain period. In nursing, budget development is characterized by several issues like financial goals, patients’ needs, and available human resources. The balance between nursing incomes and outflows cannot be ignored, and this paper aims at identifying internal and external factors that could influence a budgeting process, including reforms, personal needs, and even education.

Internal and External Forces in Budget Development

A well-developed budget provides nurses with an opportunity to plan their activities and apply available resources properly. According to Bilinski et al. (2017), political, social, and cultural factors play a serious role in formulating a budget, and cost-effective analysis is used to maximize revenues and minimize losses. Internal factors exist inside an organization and include the number of people, workload, care hours, and interpersonal relationships, or communication (Walsh, 2016). External factors determine the nursing marketplace by promoting competition and introducing current technological achievements. When healthcare organizations are involved in local or international competitions, their administrators try to find enough financial support, buy proper equipment, and improve their services. The number of people and the identification of patients’ needs also influence the budget and explain changes in nursing practice.

Impact on Nursing Budget

The impact of internal and external factors on the nursing budget may be both positive and negative. On the one hand, the analysis of possible costs and expectations from a particular nursing practice shows what a hospital or a care facility has at the moment and what needs to be obtained. On the other hand, budget development requires additional time and sources, which makes nurses get distracted from their primary goals like care provision. If there is a specially trained and prepared nurse to create a budget, positive impact usually prevails over negative outcomes.

Factors in Nursing Budget

Present Healthcare and Nursing Needs

As one of the influential factors in nursing practice, healthcare needs should be recognized during a financial analysis. When nurses develop their budgets, they pay attention to general health and demographic data in the region to learn what has to be offered to a particular community (Butler & Diaz, 2017). The increase in the aging population, technological shifts, and access to the national budget must be evaluated to learn what nurses should change and if their work is effective.

Healthcare Reforms

The impact of healthcare reforms on the nursing budget is unpredictable. Planning usually means enough time to clarify what the company and its people may need and expect in the future. The healthcare sector depends on the approved payment models, and new reforms change integrated budgets and raise the necessity to create new appropriate financial systems (Butler & Diaz, 2017). Some organizations are not ready for such spending, and budget cuts are possible.

Accreditation Agencies

The force of accreditation agencies is observed through the establishment of quality standards and improving healthcare services by educating and training nurses. Professional organizations define standards of care and make sure all facilities follow the same rules and obligations. Walsh (2016) underlines the importance of healthcare professional education to be implemented while developing a budget. Therefore, the connection between accreditation agency, budget, and education has to be recognized at an early stage of planning.

Consumer Groups

Consumer groups in nursing practice may vary, but, in most cases, they include patients, their families, and local communities. The choice of a budget defines a financial burden on patients and other organizations that could consume nursing services (Bilinski et al., 2017). When consumer groups see that nursing budget conditions influence their care opportunities, they demonstrate their concerns and approval, which has a certain impact on budget planning for nurses.

Nursing Education

Many nursing schools expect financial support from professional organizations or the government. The nursing budget must be planned by the needs associated with education and other activities that improve nurses’ level of knowledge. Walsh (2016) explains the importance of monitoring adherence to the planned budget and analyzing over- and under-spending. In the majority of cases, these costs are connected with nursing research, education, and certification.

Hospital Organizational Culture

An organizational culture of hospitals defines the conditions under which patients receive treatment and nurses have to work. According to Butler and Diaz (2017), professional barriers may be rooted in organizational culture rather than in regulatory services. Some hospitals may allow meeting additional (usually unpredictable) expenses, and some administrators do not have enough money for emergency services and changes. Therefore, hospital culture should be analyzed to plan a nursing budget properly.

Nursing Organizational Culture

Finally, building an organizational culture in nursing requires special skills and experience. Butler and Diaz (2017) introduce nurses as the most important intermediaries who provide skilled care services and establish trustful relationships with patients, families, and doctors. An understanding of nursing culture, obligations, and resources influences the budget in a variety of ways because this factor includes both internal and external characteristics, and its impact is hard to predict.


Although today’s nurses are better equipped with knowledge about quality improvement and medical services, the impact of internal and external factors remains evident. There are many reforms, policies, and standards that set external boundaries in terms of which nurses must work. Personal interests, preferences, and needs are internal issues that may also cause changes in budget planning. Therefore, all these aspects need to be addressed by nursing leaders and administrators to avoid unnecessary financial challenges.


Bilinski, A., Neumann, P., Cohen, J., Thorat, T., McDaniel, K., & Salomon, J. A. (2017). PLOS Medicine, 14(10). Web.

Butler, S., & Diaz, C. (2017). Brookings. Web.

Walsh, K. (2016). Managing a budget in healthcare professional education. Annals of Medical & Health Sciences Research, 6(2), 71-73. Web.

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