Chapter 10Fiscal Planning and Health-Care Reimbursement Flashcards
Exam 2
Fiscal Planning:
What kind of skill is it?
Not intuitive, it’s a learned skill that improves with practice
Fiscal Planning:
What is it considered?
It is proactive NOT reactive
Fiscal Planning:
It is important but is often what?
An important but often neglected dimension of planning process of management
Fiscal Planning:
What should it reflect?
Should reflect the philosophy, goals, and objectives of the organization
Fiscal Planning:
Who is this skill increasingly critical to? Why?
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
Fiscal Planning:
How are subordinates involved?
Subordinates should be included in the process- BUT aren’t involved in the actual planning –that’s a manager’s role
Fiscal Planning: What is it?
Fiscal planning is budget and money and money control.
Fiscal Planning: What is it?
Fiscal planning is budget and money and money control.
Fiscal Planning:
Why do you need to budget?
You need to budget to make sure resources are being used properly and are actually making a profit.
Fiscal Planning:
What provides the majority of hospital reimbursements (80%-90%)?
Medicaid and Medicare.
They are the largest payer for healthcare services in the US.
Balancing cost and quality:
What is this?
Cost containment and quality care
Balancing cost and quality:
What does cost-effective mean?
Cost-effective means producing good results for the amount of money spent.
It is worth the cost
Balancing cost and quality:
What items can be or not be cost-effective?
Expensive items can be cost-effective and inexpensive items may not.
Balancing cost and quality:
What must cost-effectiveness take into account?
Cost-effectiveness then must take into account factors such as anticipated length of service, need for such a service, and availability of other alternatives.
Balancing cost and quality:
What is cost containment?
Refers to the effective and efficient delivery of services while generating needed revenues for operations
Balancing cost and quality:
Who is cost containment the responsibility of?
What does the viability of most healthcare organizations depend on?
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
Responsibility Accounting
What does this mean?
Each of an organization’s revenues, expenses, assets, and liabilities is someone’s responsibility.
Responsibility Accounting
Who is held accountable?
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.
Responsibility Accounting
Who is responsible for the way that resources are used on the unit?
The manager is accountable for the way that resources on used on the unit.
Budget: What is it?
A plan that uses numerical data to predict the activities of an organization over a period of time.
Budget
The budget value is directly related to what?
The budget value is directly related to its accuracy.
Budget
What is the manager’s responsibility when it comes to budgetting?
The manager’s responsibility is to monitor and evaluate all aspects of the unit’s budget in the unit under their leadership.
Budget
Who is primarily responsible for budgeting?
However primary responsibility for budgeting, which usually lies with a chief financial officer for the hospital.
Budget:
The more accurate a budget, what will happen?
The more accurate a budget, the more they can plan for the most efficient use of its resources.
Budgeting Methods include
Incremental budgeting
Zero-based budgeting
Flexible budgeting
Performance budgeting
Budgeting Methods:
Incremental budgeting
This approach involves making adjustments to the previous year’s budget based on incremental changes
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?
as inflation
salary increases
minor modifications
Budgeting Methods:
Zero-Based Budgeting: What does it require?
Unlike incremental budgeting, zero-based budgeting requires a complete re-evaluation of all expenses and activities.
Budgeting Methods:
Incremental budgeting: What assumption is made when using this budgeting method?
It assumes that the previous year’s budget was appropriate and focuses on making small adjustments rather than starting from scratch.
Budgeting Methods:
Zero-Based Budgeting: How does each budget cycle begin?
Each budget cycle begins from a “zero base,” meaning that every item must be justified for inclusion in the budget.
Budgeting Methods:
Zero-Based Budgeting: Each budget cycle begins from a “zero base,” what does this method encourage?
This method encourages a thorough review of all costs and prioritization of resources based on the organization’s needs and goals.
Budgeting Methods:
Flexible Budgeting: What does it allow for?
Flexible Budgeting: Flexible budgeting allows for adjustments in expenses based on changes in activity levels or volume
Budgeting Methods:
Flexible Budgeting: What does it take into account?
It takes into account the variability in workload or patient volume and adjusts the budget accordingly.
Budgeting Methods:
Flexible Budgeting: What does this approach help do?
This approach helps maintain financial stability by aligning expenses with the level of activity, ensuring that resources are allocated appropriately.
Budgeting Methods:
Performance Budgeting: What does it focus on?
Performance budgeting focuses on outcomes and results.
Budgeting Methods:
Performance Budgeting: What does this kind of budget do?
It links the budget to specific goals and objectives and measures the performance and effectiveness of various activities and programs.
Budgeting Methods:
Performance Budgeting: What does this approach emphasize?
This approach emphasizes accountability and encourages decision-making based on the expected outcomes and the cost-effectiveness of interventions.
Budgeting Methods:
What do the four methods of budgeting offer?
These four budgeting types offer different approaches to financial planning and resource allocation within healthcare organizations.
Personnel Workforce Budget:
Healthcare is what?
Health care is labor-intensive.
Personnel Workforce Budget:
What accounts for the majority of most healthcare organization’s expenses?
The personnel budget accounts for the majority of most health-care organization’s expenses.
Personnel Workforce Budget:
What is the cost of a new nurse?
Salary + 35% = cost of a new nurse.
35% = health benefits, sick time, holiday time.
Personnel Workforce Budget:
What are the expenses of having a new nurse?
As a new nurse, its not just your salary.
This includes your onboarding process- to train, have HR people to deal with your paperwork, which takes time and money.
Preceptor- training a new nurse.
Operating Budget:
What is an operating budget?
The operating budget reflects expenses that flex up or down in a predetermined manner to reflect variation in volume of service provided.
What is the second most significant component in the hospital budget?
The Operating budget; Next to personnel costs, supplies are the second most significant component in the hospital budget
Capital Budget
What do capital budgets plan for?
Capital budgets plan for the purchase of buildings or major equipment.
This includes equipment that has a long life (usually greater than 5 years), is not used daily, and is more expensive than operating supplies.
Capital Budget
What kind of equipment does capital budget include?
This includes equipment that has a long life (usually greater than 5 years), is not used daily, and is more expensive than operating supplies.
