A budget is a detailed plan, expressed in quantitative terms, that specifies how resources will be acquired and used during a specific time period. Budgeting systems have five primary purposes: planning; facilitating communication and coordination; allocating resources; controlling profit and operations; and evaluating performance and providing incentives. In addition to other types of planning, budget planning will help assure that a business will be able to acquire the resources needed to create and sustain a new service and even make sure that existing operations within the business remain viable. Any person in their everyday lives should and likely does at least some amount of budgeting in preparation for a purchase desire (like a vacation) or to meet anticipated and unanticipated financial challenges that lie ahead (eg, job loss or transition, medical expenses, large repairs). Likewise, the pharmacist manager must budget for these purchase desires and/or anticipated financial challenges.
Lecher et al conducted a cost analysis of a new technology; specifically, point-of-care human immunodeficiency virus (HIV) rapid testing in community pharmacies.1 The total cost was calculated to include costs of the test kits, control kits, shipping, test supplies, training, reporting, program administration, and advertising. The six sites in this pilot trained 22 staff to implement HIV testing. A total of 939 HIV rapid tests were conducted over 12 months. The median pretest counseling time was 2 minutes, and the median posttest counseling time was 2 minutes for clients with a nonreactive test and 10 minutes for clients with a reactive test. The average cost per person tested was an estimated $47.21. When considering only recurrent costs, the average cost per person tested was $32.17. This budget analysis demonstrated that providing this point of care HIV testing required only a modest amount of staff time and incurred costs that were comparable to other services.
Pharmacy managers and leaders in pharmacy should be aware of budgets and the budget planning process. Piloting a potential program/service might offer a better idea of its feasibility. The manager must take into account other potential sources of revenue, unforeseen contingencies, and all aspects of costs for various alternatives when creating a budget and planning ahead.
Additional information about Budgeting can be found in Pharmacy Management: Essentials for All Practice Settings, 4e. If you or your institution subscribes to AccessPharmacy, use or create your MyAccess Profile to sign-in to Pharmacy Management: Essentials for All Practice Settings, 4e. If your institution does not provide access, ask your medical librarian about subscribing.
1Lecher SL, Shrestha RK, Botts LW, Alvarez J, et al. Cost analysis of a novel HIV testing strategy in community pharmacy and retail clinics. J Am Pharm Assoc. 2015;55:488-492.