Finance Flashcards
Accounts payable
Amounts an organization owes to suppliers and other trade creditors for merchandise and services purchased from them, but for which the organization has not yet paid.
Accounts receivable
Amounts due to an organization from patients and insurers for services the organization has already provided. The concept of accounts receivable is often now called revenue cycle, a multidisciplinary approach to reducing the amount in accounts receivable by effectively managing the production and payment cycles.
Accrued expenses payable
Liabilities for expenses that have been incurred by the hospital but for which the hospital has not yet paid, such as compensation to employees.
Any-willing-provider statutes
Patient protection laws that allow patients to receive care from providers outside a network.
Asset efficiency ratios
Ratios that measure efficiency by comparing revenue to assets.
Balance sheet
A statement that shows an organization’s financial position at a specific point in time
Break-even analysis
An analysis to determine the volume point at which a project will cover its costs; can be helpful to organizations considering new projects, developing a business plan, or formulating a pricing strategy.
Budgeting
The process of converting the operating plan into monetary terms.
Capital budgeting
The process of converting the operating plan into budgets for capital expenditures.
Capital structure ratios
Ratios that measure an organization’s long-term liquidity by measuring a variety of relationships to capital.
Capitated price
A fixed monthly payment to providers from a third-party payer for each person enrolled in the payer’s plan, regardless of whether any given individual receives care. Also known as capitation, this payment model incentivizes a healthcare organization to keep its population from using more healthcare services than necessary because it profits only if the total cost of treating the population is less than the total capitated price.
Charges
The amount patients are expected to pay for services; also called prices or rates.
Comprehensive budgeting
Integration of all budgets into one document.
Continuous budgets
Budgets that are updated continuously so that year end never occurs.
Current assets
Resources that an organization expects to consume within one year.
Current liabilities
Economic obligations, or debts, that are due within one year.
Current Procedural Terminology
A set of medical codes used to report medical, surgical, and diagnostic procedures and services.
Deferred revenue
Money received by the hospital but not yet earned, such as registration fees for an educational program not yet provided.
Diagnosis-related group
A grouping of similar healthcare cases that should require similar resource consumption; Medicare uses diagnosis-related groups to calculate prospective payments.
Differential costing
A method of assembling costs (and sometimes revenues) to alternative decisions; also known as incremental costing or relevant costing.
Direct contracting
The practice of an employer making a contractual agreement directly with an integrated delivery system to deliver health services to employees.
Discrete budgets
Budgets that apply to a fixed period of time, usually a year.
Excess of revenues over expenses
Operating income plus nonoperating income minus total expenses.
Fixed budgets
Budgets that assume volumes, related revenues, and variable expenses remain constant during the year.
Flexible budgets
Budgets that take into account fluctuations in volumes, at least within ranges expressed as probabilities, and adjust variable expenses accordingly.
Four ways to finance capital expenditures
Funded depreciation, philanthropy, operating surpluses, and debt.
