Chapter 10Fiscal Planning and Health-Care Reimbursement

Question 1

Fiscal Planning:

What kind of skill is it?

Answer 1

Not intuitive, it’s a learned skill that improves with practice

Question 2

Fiscal Planning:

What is it considered?

Answer 2

It is proactive NOT reactive

Question 3

Fiscal Planning:

It is important but is often what?

Answer 3

An important but often neglected dimension of planning process of management

Question 4

Fiscal Planning:

What should it reflect?

Answer 4

Should reflect the philosophy, goals, and objectives of the organization

Question 5

Fiscal Planning:

Who is this skill increasingly critical to? Why?

Answer 5

A skill increasingly critical to nursing managers because fiscal planning requires vision, creativity, and a thorough knowledge of the political, social, and economic forces that shape health care

Question 6

Fiscal Planning:

How are subordinates involved?

Answer 6

Subordinates should be included in the process- BUT aren’t involved in the actual planning –that’s a manager’s role

Question 7

Fiscal Planning: What is it?

Answer 7

Fiscal planning is budget and money and money control.

Question 8

Fiscal Planning: What is it?

Answer 8

Fiscal planning is budget and money and money control.

Question 9

Fiscal Planning:

Why do you need to budget?

Answer 9

You need to budget to make sure resources are being used properly and are actually making a profit.

Question 10

Fiscal Planning:

What provides the majority of hospital reimbursements (80%-90%)?

Answer 10

Medicaid and Medicare.

They are the largest payer for healthcare services in the US.

Question 11

Balancing cost and quality:

What is this?

Answer 11

Cost containment and quality care

Question 12

Balancing cost and quality:

What does cost-effective mean?

Answer 12

Cost-effective means producing good results for the amount of money spent.

It is worth the cost

Question 13

Balancing cost and quality:

What items can be or not be cost-effective?

Answer 13

Expensive items can be cost-effective and inexpensive items may not.

Question 14

Balancing cost and quality:

What must cost-effectiveness take into account?

Answer 14

Cost-effectiveness then must take into account factors such as anticipated length of service, need for such a service, and availability of other alternatives.

Question 15

Balancing cost and quality:

What is cost containment?

Answer 15

Refers to the effective and efficient delivery of services while generating needed revenues for operations

Question 16

Balancing cost and quality:

Who is cost containment the responsibility of?
What does the viability of most healthcare organizations depend on?

Answer 16

Is the responsibility of every health care provider, and the viability of most health care organizations today depends on their ability to use their fiscal resources wisely

Question 17

Responsibility Accounting

What does this mean?

Answer 17

Each of an organization’s revenues, expenses, assets, and liabilities is someone’s responsibility.

Question 18

Responsibility Accounting

Who is held accountable?

Answer 18

As a corollary, the person with the most direct control or influence on any of these financial elements should be held accountable for them, usually the leader-manager.

Question 19

Responsibility Accounting

Who is responsible for the way that resources are used on the unit?

Answer 19

The manager is accountable for the way that resources on used on the unit.

Question 20

Budget: What is it?

Answer 20

A plan that uses numerical data to predict the activities of an organization over a period of time.

Question 21

Budget

The budget value is directly related to what?

Answer 21

The budget value is directly related to its accuracy.

Question 22

Budget

What is the manager’s responsibility when it comes to budgetting?

Answer 22

The manager’s responsibility is to monitor and evaluate all aspects of the unit’s budget in the unit under their leadership.

Question 23

Budget

Who is primarily responsible for budgeting?

Answer 23

However primary responsibility for budgeting, which usually lies with a chief financial officer for the hospital.

Question 24

Budget:

The more accurate a budget, what will happen?

Answer 24

The more accurate a budget, the more they can plan for the most efficient use of its resources.

Question 25

Budgeting Methods include

Answer 25

Incremental budgeting
Zero-based budgeting
Flexible budgeting
Performance budgeting

Question 26

Budgeting Methods:

Incremental budgeting

Answer 26

This approach involves making adjustments to the previous year’s budget based on incremental changes

Question 27

Budgeting Methods:

Incremental budgeting: This approach involves making adjustments to the previous year’s budget based on incremental changes.

What are examples of incremental changes?

Answer 27

as inflation

salary increases

minor modifications

Question 28

Budgeting Methods:

Zero-Based Budgeting: What does it require?

Answer 28

Unlike incremental budgeting, zero-based budgeting requires a complete re-evaluation of all expenses and activities.

Question 28

Budgeting Methods:

Incremental budgeting: What assumption is made when using this budgeting method?

Answer 28

It assumes that the previous year’s budget was appropriate and focuses on making small adjustments rather than starting from scratch.

Question 29

Budgeting Methods:

Zero-Based Budgeting: How does each budget cycle begin?

Answer 29

Each budget cycle begins from a “zero base,” meaning that every item must be justified for inclusion in the budget.

Question 30

Budgeting Methods:

Zero-Based Budgeting: Each budget cycle begins from a “zero base,” what does this method encourage?

Answer 30

This method encourages a thorough review of all costs and prioritization of resources based on the organization’s needs and goals.

Question 31

Budgeting Methods:

Flexible Budgeting: What does it allow for?

Answer 31

Flexible Budgeting: Flexible budgeting allows for adjustments in expenses based on changes in activity levels or volume

Question 32

Budgeting Methods:

Flexible Budgeting: What does it take into account?

Answer 32

It takes into account the variability in workload or patient volume and adjusts the budget accordingly.

Question 33

Budgeting Methods:

Flexible Budgeting: What does this approach help do?

Answer 33

This approach helps maintain financial stability by aligning expenses with the level of activity, ensuring that resources are allocated appropriately.

Question 34

Budgeting Methods:

Performance Budgeting: What does it focus on?

Answer 34

Performance budgeting focuses on outcomes and results.

Question 35

Budgeting Methods:

Performance Budgeting: What does this kind of budget do?

Answer 35

It links the budget to specific goals and objectives and measures the performance and effectiveness of various activities and programs.

Question 36

Budgeting Methods:

Performance Budgeting: What does this approach emphasize?

Answer 36

This approach emphasizes accountability and encourages decision-making based on the expected outcomes and the cost-effectiveness of interventions.

Question 37

Budgeting Methods:

What do the four methods of budgeting offer?

Answer 37

These four budgeting types offer different approaches to financial planning and resource allocation within healthcare organizations.