ch 20 managing costs and budgets

Question 1

3 major sources that pay for healthcare

Answer 1

-government (medicare and medicaid)
-private health insurance
-out of pocket

Question 2

part of medicaid: insurance plan for hospital, hospice, home health, and skilled nursing care
-paid for through Social Security taxes

Answer 2

part A

Question 3

part of medicaid: optional insurance that covers physician services, medical equipment, and diagnostic tests
-paid for by federal taxes and monthly premiums

Answer 3

part B

Question 4

part of medicaid: allows private health insurance companies to provide Medicare benefits
-“medicare advantage plans”

Answer 4

part C

Question 5

part of medicaid: provides outpatient drug prescription

Answer 5

part D

Question 6

system: cost of providing a service plus a markup for a profit

Answer 6

cost-based system

Question 7

all allowable costs are calculated and used as the basis for payment

Answer 7

cost-based reimbursement

Question 8

reimbursed cost that is less than the full charge for a service

Answer 8

contractual allowance

Question 9

system: third-party payer decides in advance what will be paid for a service or episode of care

Answer 9

prospective payment system

Question 10

classification system that groups patients into categories based on the average number of days of hospitalization for specific medical diagnoses, considering factors such as the patient’s age, complications, and other illnesses

Answer 10

diagnosis related group

Question 11

term that brings together the delivery and financing function into one entity, in an attempt to control the cost, utilization, and quality

Answer 11

manged care/cost

Question 12

costs that do not change as the volume of patients changes

Answer 12

fixed costs

Question 13

costs that vary in direct proportion to patient volume or acuity

Answer 13

variable costs

Question 14

example of fixed costs

Answer 14

-rent
-utilities
-loan payments
-salaries for min amount of staff

Question 15

examples of variable costs

Answer 15

-nursing personnel
-supplies
-medications

Question 16

financial plan for the day-to-day activities of the organization

Answer 16

operating budget

Question 17

largest part of operating budgets

Answer 17

personnel budget

Question 18

expenses related to the purchase of major capital items such as equipment and the physical plant.

Answer 18

capital expenditure budget

Question 19

operating plan for monthly cash receipts and disbursements.

Answer 19

cash budget

Question 20

difference between the projected budget and the actual performance for a particular account

Answer 20

variance