From the staff development bookshelf: The 15-year capital budget plan

Staff Development Weekly: Insight on Evidence-Based Practice in Education, December 16, 2011

Even if your organization does not require a 15-year capital budget plan, it is the best way to ensure you are adequately forecasting your department’s needs for capital equipment. You might say, “Fifteen years!” Yes, the 15-year plan is difficult to develop, but it will make budgeting easier and more accurate in the years to come. How can you predict needs and pricing 15 years in advance? Any plan, especially a 15-year plan, is just an educated guess. Most predictions beyond five years are based on predicted replacements. The 15-year plan is especially valuable in departments that have equipment with an extended useful life.

 Let’s take patient beds, for example. The beds are purchased and have a predicted useful life of 15 years. The beds work great for several years and therefore do not get put on the five-year replacement budget when their useful life is getting close to completion. All of a sudden, the beds begin to fail and a large expense has not been planned for adequately. If, however, when the beds were purchased, their replacement was predicted and put on the 15-year plan, the nurse leader would see each year that the beds were aging and anticipate the large expenditure. The 15-year plan also allows the nurse leader to ensure that large purchases do not fall on the same year. It is important to the facility for the department’s budgeted totals per year to be somewhat level. Although narrowing it down to an exact amount is not necessary, evening out expenses helps the facility to maintain control of dollars spent. Using a computerized spreadsheet to map out your plan helps ensure that you’re predicting replacement items correctly.

Source: Book excerpt adapted from The Nurse Leader's Guide to Business Skills: Strategies for Optimizing Financial Performance by Pamela Hunt, BS, MSN, RN, and Deborah Laughon, RN, BSN, MS, DBA, CCRN.

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