Budgeting in the ICU

Whereas cost accounting systems record past costs and revenues of the ICU, a budget predicts the financial consequences of future activities. Therefore it is an essential instrument for controlling the use of resources in the unit. A budget is not and should not be a mere forecast of future costs and revenues, such as a weather forecast, but the consequence of strategic decision-making at both the hospital and ICU level. When used properly, it makes a substantial contribution to the rational use of resources, converging to explicitly stated objectives for the hospital and the ICU. In principle, a budget can be produced for any future time period, but in practice budgets are mostly drawn up for 1 year.

An ICU budget should include at least the following components: current wages, other current expenses, and investments. It should be constructed on either a cash-flow or an accrual basis. In practice, these two approaches are frequently mixed in the same budget, leading to confusion and misleading information for ICU managers.

There are three fundamental budgeting procedures: bottom-up, top-down, and just-top. In a bottom-up system the budgeting procedure is initiated by ICU management, and refined and coordinated at the hospital level. In a top-down design, hospital management makes the first budget proposal, which is discussed and possibly changed by unit managers. In a just-top procedure, a given authority (the director, a board, or a council) decides on the ICU budget without any participation by ICU members. This procedure is sometimes disguised as an 'objective' rule, for example last year's budget with some allowance for inflation or a fixed percentage of the hospital budget. Reflection of the hospital and ICU strategy can easily be avoided in such a system. Therefore we believe that it is inadequate for rational resource management.

A budget's usefulness is substantially increased when there is a budget control system. In such a system, previously established budgets are compared with the real situation. When important differences are observed, immediate action may be necessary to preserve the ICU strategy. Without such a system, those differences will go unnoticed for a long time.

Healthy Fat Loss For A Longer Life

Healthy Fat Loss For A Longer Life

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