NURS 834 Week 5 Practice Initiative Project Part III Business Case Analysis and Budget Reflective Evaluation Example

What the Executives Asked and What Our Budget Missed: An Analysis of the Glycemic Team Business Case and a Reflective Evaluation of Its Year-One Budget

Introduction

In Part II, our group presented a business case asking our hospital's executive leadership to fund our glucose team for $382,000 in its first year, projecting about $640,000 in benefit and a 68% return. To test the case, we presented it to a simulated executive committee made up of our hospital's finance director, the chief nursing officer and a hospitalist, who agreed to play the roles candidly. They asked three questions we could not fully answer: Where are the indirect costs? What happens to the service when one nurse practitioner is on vacation? And why would the savings begin on the first day? This paper analyzes the business case in light of those questions, evaluates and revises the budget and reflects on what the process taught us.

Analysis of the Business Case

Problem Statement and Evidence

The problem statement was the strongest part of the case. It used the hospital's own data, a 40% rise in severe hypoglycemia, eleven rapid response calls a month and a 1.2-day excess length of stay for patients with diabetes, and it tied each to a cause the team could address. The evidence was consistent and current: a review linking inpatient diabetes management services to shorter stays, fewer readmissions, less hypoglycemia and cost savings (Haque et al., 2021), a large study tying early diabetes consults to discharge about a day and a half sooner (Sheahan et al., 2021), and evidence that a remote glucose management service reduced the proportion of patients with hyperglycemia (Mendelsohn Curanaj et al., 2026). The committee accepted the problem and the evidence without challenge. One weakness was that the length of stay study found no effect on readmissions or complications, which we had not mentioned; transparency about what the evidence does not show would have strengthened our credibility.

Strategic Alignment

Waxman (2018) presents strategic alignment as a test any nursing business plan must pass. Our case passed it clearly, since reducing hypoglycemia and avoidable bed-days were both organizational priorities for the year. The committee noted, however, that we had not mentioned the hospital's value-based purchasing performance or its participation in a quality reporting program, where glycemic outcomes may affect payment. Connecting the initiative to those programs would have added a revenue argument we left unused.

Savings and Revenue Assumptions

Each line of projected benefit deserved more scrutiny than we gave it. The length of stay saving of half a day for 1,200 patients at $600 per day assumed that every day saved is a variable cost avoided; the finance director pointed out that a shorter stay saves money mainly when the bed is filled by another patient, which at our 87% occupancy is likely on medical units but not guaranteed. The avoided hypoglycemia cost of $1,200 per event was an estimate we had not verified with our own cost accounting. The consult revenue of $148,000 assumed collection rates from the hospitalist group, but consult billing by nurse practitioners may be reimbursed at a different rate by some payers. None of these assumptions was unreasonable, but each was stated with more confidence than our data supported. A business case is only as strong as the assumption the finance director would question first.

Sensitivity Analysis

Our sensitivity analysis was a strength the committee praised, because it showed that the case depended mainly on length of stay. It also showed honestly that if length of stay did not fall, the program would cost more than it returned in year one. A better version would have changed two assumptions together, for example a smaller length of stay effect combined with lower consult revenue, since assumptions that are optimistic tend to be optimistic together.

Reflective Evaluation of the Budget

What the Budget Missed

The committee's questions exposed three omissions. First, indirect costs: the hospital allocates overhead, such as office space, information technology support, human resources and administration, to new services, typically as a percentage of direct cost. Second, leave coverage: two nurse practitioners covering seven days cannot also cover their own vacation, sick days and continuing education without either gaps in service or premium pay. Third, ramp-up: with hiring, order set development and a two-unit pilot, the service would not reach full volume until about month six, so year-one benefits would be well below our full-year projection.

Revised Budget and Return

The revised case is weaker but more credible. A 35% first-year return with break-even near month nine still justifies the investment, and year two, without one-time costs and with a full year at volume, should approach the original projection. We would rather present a modest return we can deliver than a large one we cannot, and the committee members said the revised version was the one they would be willing to approve.

What the Process Taught Us

We learned that clinicians tend to build budgets the way we build care plans, around what should happen. Finance leaders build them around what usually happens, including delays, vacancies and overhead. Our optimism was not dishonesty, but it would have cost us credibility if the board had found the omissions first. We also learned the value of asking finance colleagues early; one meeting with the finance director produced more improvement than a week of our own revisions. As a group, the covenant we wrote in Part I helped. When we disagreed about whether to lower our projection, our decision rule, consensus or the section owner decides, let us resolve it in one meeting, and the member who had argued for the original figures wrote the revised table.

Stewardship

Jesus told of servants entrusted with their master's money and judged by how faithfully they used it (English Standard Version Bible, 2001/2016, Matthew 25:14-29). A budget request is a request to be entrusted with resources that could have gone elsewhere, to another unit, another program or the hospital's charity care. Faithful stewardship means asking for what is needed, projecting honestly and reporting results even when they disappoint. Revising our own projection downward was, in that sense, an act of stewardship rather than a retreat.

Group Process

Working as a group of three also shaped the budget. Each of us had built a different part of the projection, and no one had looked at the whole until the committee did. In future projects we will assign one member, outside the section that produced each number, to audit every figure against its source before submission. That simple check would have caught the missing leave coverage, which the member who built the staffing line had assumed someone else had included.

Recommendations

Before the case goes to the board, we will make four changes. We will obtain the hospital's actual cost per hypoglycemic event and its overhead rate from finance. We will add a two-variable sensitivity analysis. We will add the value-based purchasing connection to the strategic alignment slide. And we will commit in writing to report actual length of stay and hypoglycemia results at months six and twelve, including if they fall short. If at month six length of stay has not moved, we will present that finding to leadership with an analysis of why, rather than waiting for the year-end report, so that the hospital can decide early whether to adjust the service or reduce its scope.

Conclusion

Our business case for an NP-led inpatient glycemic team rested on a strong problem statement, current evidence and clear strategic alignment, but its budget omitted indirect costs, leave coverage and ramp-up time, and its savings assumptions were stated more confidently than the data allowed. The revised budget lowers the first-year return from 68% to 35% and moves break-even to about month nine, a projection that is less impressive and more trustworthy. The exercise taught us to build budgets around what usually happens, to involve finance early and to treat honest projection as part of stewardship.

References

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Haque, W. Z., Demidowich, A. P., Sidhaye, A., Golden, S. H., & Zilbermint, M. (2021). The financial impact of an inpatient diabetes management service. Current Diabetes Reports, 21(2), Article 5. https://doi.org/10.1007/s11892-020-01374-0

Mendelsohn Curanaj, F. A., Rajan, M., Snead, J., McCullough, P., & Lee, J. I. (2026). Delivery of guideline directed care for inpatient glycemic management: Quality improvement implementation. Journal of Diabetes Science and Technology. Advance online publication. https://doi.org/10.1177/19322968261417369

Sheahan, K. H., Atherly, A., Dayman, C., & Schnure, J. (2021). The impact of diabetology consultations on length of stay in hospitalized patients with diabetes. Endocrinology, Diabetes & Metabolism, 4(1), Article e00199. https://doi.org/10.1002/edm2.199

Waxman, K. T. (2018). Financial and business management for the doctor of nursing practice (2nd ed.). Springer Publishing.