With these priorities in mind, last year the organization began using quarterly rolling forecasts, doing run-rate forecasting, and making minor adjustments to the budget based on issues like cost of living. The new quarterly process uses established targets that the board approves annually, monthly monitoring of metrics to catch fluctuations early, and plans that describe what the organization intends to do to alter the forecast to attain the targets.
However, Olson says one of the biggest differences between the previous budget process and the new one is the reduction in line items. The previous budget had nearly 7,000 lines and was extremely detailed, whereas the current one focuses on a select few, significant items.
The quarterly approach is an upgrade over annual budgeting, Olson explains, because it allows the organization to be "nimble and focused." Moreover, he says, it spurs quarterly discussions and course corrections. The 20,000 annual hours used to create the original budget are now put into daily management and quarterly forecasting.
ThedaCare also improved accountability for adhering to budget by switching from a silo view to a system view so that everyone is aware of the priorities. Burmeister says this change has created "a more collaborative experience because everyone has an understanding of how everyone else is doing quarter over quarter. So if there are cost drivers, they can address it and help. For instance, if we gain or lose payers or physicians, those things can impact [the budget] quickly, and now we can address them immediately."