Bottom-up capital fund allocations.

Abstract

Departments at Silver Cross Hospital in Joliet, IL, had requested over $10 million dollars worth of equipment or renovations. The capital budget committee, made up of senior-level managers, determined that only $4 million was available. It was apparent that the capital process needed to allocate some level of funding to all the different constituencies to meet a variety of demands. Thus, seven special fund allocation categories that were created. Once a dollar limit was set for each category, it was no longer necessary or appropriate for the committee to determine which item or departments had greater needs or merit. The selection process was based upon continuous quality improvement principles in order to improve the decision-making process and push the decision down to the lowest practical level. A procedure called "choice analysis" was used to make the process as impartial as possible. The result was greater staff understanding and acceptance of the decisions that were made.