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The Financial Role of the Nurse Manager

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Nurse managers play a critical role in hospital operations. Nurses provide the majority of inpatient care and are responsible for patient safety and well-being. That means nurse managers have to ensure their units live up to their very big responsibilities. At the same time, hospitals are business entities and have fiscal concerns. Nurse managers have a fiduciary duty to their organizations and play a key part in ensuring hospitals make budget.


Nursing labor is one of the largest patient-care costs in a hospital. Unlike certain medical services such as rehabilitation therapy, nursing services don't generate revenue — nursing is considered a cost center. Therefore, hospitals strive to maintain enough nurses on duty for proper care and safety while not incurring excessive costs. Nurse managers are charged with figuring out how to responsibly and cost effectively staff their departments through weekly, biweekly and monthly schedules.


Although certain hospitals use computer systems that monitor employee activity, nurse managers often have to submit payroll for their departments. Even in facilities with advanced timekeeping systems, nurse managers have to review and validate payroll reports and coordinate with human resource departments about employee leaves, vacations and illnesses. This is important for managing labor costs.


Nurses have relatively unhampered access to medical supplies. However, every syringe, IV bag and tongue depressor costs money. Hospitals rely on nurses' discretion when using supplies. Nurse managers are tasked with keeping an eye on supplies, encouraging their responsible use and, when necessary, allocating or rationing them carefully. Nurse managers need to make sure nurses have what they need to do their jobs while at the same time encouraging fiscal responsibility.

Insurance Utilization

Hospitals have to be mindful of what patients' medical insurance plans allow. When providing services and making patient care decisions, nurse managers have to consider which interventions are covered and which may cost a patient or the facility substantial sums. Among other things, nurse managers review patient cases with nurse case managers and floor nurses to ensure that care delivered lines up as best as possible with hospital and patient financial considerations.


Eric Feigenbaum started his career in print journalism, becoming editor-in-chief of "The Daily" of the University of Washington during college and afterward working at two major newspapers. He later did many print and Web projects including re-brandings for major companies and catalog production.

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