Common Misconceptions About PBMA

Even though PBMA has been around longer than smart phones, DVDs and the World Wide Web, there remains some uncertainty about its purpose and how it works to help manage an organization’s budget. So, to set the record straight, we’ve compiled and responded to the most common misconceptions about PBMA in a quick and easy listing that will provide you with more information on this highly effective decision-making tool.

Misconception #1: “PBMA is a cost saving process”

PBMA is a tool designed to guide all resource allocation decisions. PBMA is associated with deficit situations because it is used most often in this context, at least since the fiscal crisis of 2008. This is not because PBMA is a cost cutting process per se but because in a budget deficit environment, resource allocation decisions are more difficult, and certainly more scrutinized, which often leads decision-makers to seek a more formal process than what is already in place. In fact, PBMA can help with resource allocation decisions irrespective of the financial situation. Ideally, PBMA is used on an on-going basis regardless of the specific fiscal situation in order to move an organization closer to its stated objectives.

Misconception #2: “PBMA is a tool designed to help with one-time challenges”

PBMA can help with one-time challenges such as an immediate financial challenge or a change to the organization objectives. PBMA is often used to help with such challenges because one-time challenges typically heighten the focus on resource allocation decisions (i.e., what funding changes will be made to balance the budget or to address the new objectives). In fact, the features of PBMA that make it a desirable tool in times of emergency also make it a desirable tool at any time. Ideally, organizations will rely on the same tool, and the same decision criteria, when looking for short term solutions to a budget gap as well as longer term solutions for re-allocating resources to meet the most need or achieve the greatest health gain.

In essence, what PMBA helps an organization achieve, year-over-year, is a balanced budget that reflects its strategic goals and objectives.

Misconception #3: “PBMA is extremely time-consuming and doesn’t work without all relevant data.”

PBMA facilitates evidence-based decision-making. This does not mean that the process can be implemented only when all information is available and therefore involves enormous demands for data. In fact, in any organization, resource allocation decisions are being made continuously with the information that is at hand. PBMA can be implemented with this same information and further, it will improve the rigor and transparency in how decisions are being made. Ideally, decision-makers will draw on the best data available but will not be hampered when presented with imperfect information. PBMA provides a straightforward approach for decision-making regardless of data constraints.

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