Finance Chapter 5

Question 1

What are unit leaders accountable for in acute care settings?

Answer 1

They are the CEOs for unit financial accountability, responsible for managing payroll dollars, labor expenses, and the expense and revenue relationship.

Question 2

What is the importance of data in managing budgets and FTEs?

Answer 2

Data allows for defending budgets, negotiating changes, and ensuring a seat at the decision-making table.

Question 3

What are the essential components of a budget?

Answer 3

Revenue and expense relationships, workload type demand, deficit demand identification, and resource management planning.

Question 4

What is flexible or variable budgeting?

Answer 4

A budgeting method that adjusts based on census-driven schedules, ensuring expenses and revenue remain relative as agreed.

Question 5

What are key performance indicators (KPIs) in budgeting?

Answer 5

Metrics used to track and benchmark organizational performance, including total worked hours, budget census, patient days, and budget FTEs.

Question 6

What are the primary workload units of service (UOS) for different units?

Answer 6

Census for inpatient units, ED visits for emergency units, and deliveries for obstetric units.

Question 7

How should workload UOS be identified for effective planning?

Answer 7

By day of the week in four ranges: peak workload, possible volume, most frequent volume, and certain or most common volume.

Question 8

What is the ADT Work Intensity Index formula?

Answer 8

(Admissions + Discharges + Transfers) / Midnight Census × 100.

Question 9

What is the impact of high ADT Work Intensity on length of stay (LOS)?

Answer 9

High ADT Work Intensity is associated with shortened LOS, while low ADT Work Intensity is associated with lengthened LOS.

Question 10

What are some business case strategies for managing ADT workloads?

Answer 10

Allocating positions for ADT nurses, negotiating productivity credits for secondary workloads, and managing supplemental staffing.

Question 11

What are the best practices for workload UOS management?

Answer 11

Defining annual financial plans, trending workload volumes by day of the week, and developing employee schedules based on most frequent volumes.

Question 12

What are the classifications of hours per unit of service (UOS)?

Answer 12

Direct care worked hours, indirect care worked hours, total worked hours, nonproductive hours, and total paid hours.

Question 13

What are the key considerations for calculating direct RN percentages?

Answer 13

Total direct RN hours per 24 hours divided by total direct hours per 24 hours.

Question 14

What is the formula for calculating the direct RN to patient ratio?

Answer 14

Average Daily Census divided by direct RN shifts per 12-hour shift.

Question 15

What are the common challenges in scheduling and staffing?

Answer 15

Shift combinations unmatched to budget FTEs, conflicts in worked and paid hour policies, and excessive use of nonproductive hours.

Question 16

What are the strategies for managing employee requests?

Answer 16

Defining requests, identifying known educational sabbaticals, anticipating LOAs, and budgeting for benefit nonproductive replacement.

Question 17

What are the key performance indicators (KPIs) for staffing decisions?

Answer 17

Direct hours per UOS, indirect hours per UOS, total worked hours per UOS, and total paid hours per UOS.

Question 18

How can peer review build skills for monthly operations review?

Answer 18

By enabling better business understanding, ensuring target interventions, and fostering collaboration and continuous learning.

Question 19

What does the annual budget in acute care settings establish?

Answer 19

The revenue and expense relationship for the organization.

Question 20

What is the primary function of a budget in healthcare?

Answer 20

To provide a financial plan for managing resources effectively.

Question 21

What is a common issue caused by improper translation of FTEs in budgeting?

Answer 21

Payroll leakage and budget discrepancies.

Question 22

What are the components of direct care worked hours?

Answer 22

Hours worked by staff providing direct patient care.

Question 23

What is the significance of indirect care worked hours?

Answer 23

They include hours worked by staff supporting patient care but not providing direct care.

Question 24

How is total worked (productive) hours calculated?

Answer 24

The sum of direct and indirect worked hours.

Question 25

What are nonproductive hours?

Answer 25

Hours paid but not worked, including benefit time like vacation, sick leave, and holidays.

Question 26

What is the importance of defining a budget year?

Answer 26

It sets the timeframe for financial planning and reporting.

Question 27

What role do key performance indicators (KPIs) play in budgeting?

Answer 27

They help track and measure organizational performance.

Question 28

What is the purpose of flexible budgeting in acute care settings?

Answer 28

To adjust staffing and expenses based on patient census and workload fluctuations.

Question 29

How do you calculate the ADT Work Intensity Index?

Answer 29

(Admissions + Discharges + Transfers) / Midnight Census × 100.

Question 30

What is the impact of high ADT Work Intensity on staffing?

Answer 30

It often requires additional RN staffing to manage increased workload.

Question 31

What are the primary workload units of service (UOS) for emergency units?

Answer 31

ED visits.

Question 32

What are peak workload volumes?

Answer 32

The highest volume consistent with the capacity of the unit.

Question 33

What are the consequences of not measuring workload and labor utilization accurately?

Answer 33

Misaligned patient needs and staff resources, overvaluation or undervaluation of services, and inaccurate resource projections.

Question 34

What is the formula for calculating direct RN shifts per 12-hour shift?

Answer 34

Total direct RN hours per 24 hours divided by 2.

Question 35

What are the strategies for managing flexible schedules?

Answer 35

Developing shifts that meet patient care needs and accommodate employee preferences without causing overtime or coverage issues.

Question 36

What is the purpose of position control in staffing?

Answer 36

To monitor all filled and vacant positions by department and ensure budget compliance.

Question 37

What are the benefits of using a variable staffing plan (VSP)?

Answer 37

It allows for adjusting staffing levels based on patient census and workload, ensuring optimal care and cost-efficiency.

Question 38

What are the key factors in developing a core staffing pattern?

Answer 38

Demand data, patient-centric budgeting, scheduling, and consistent delivery of target hours of care.

Question 39

End of Ch Q#1: Calculate the HPPDs for each of the following Telemetry unit Hours Classifica-
tions for one pay period of 14 days. The Budget Average Daily UOS is 20 and the
pay period total is 280. Required data is included in the shaded boxes.

Critical Thinking Exercise Table of Hours Classifications for HPPD Calculations
Pay Period Hours HPPDs
Budget Average Daily UOS is 20/day X 14 = 280

1. Direct RN hours: 1705.2
2. Direct NA/Tech hours (staff that flex in the VSP): 820.4
3. Total Direct hours (e.g., RN and NA/Tech hours): 2525.6
4. Total Indirect hours (e.g., manager, clerks, etc.): 400.4
5. Total Worked, or Productive hours: 2926.0
6. Total nonproductive hours: 511.38
   Benefit hours for time paid but not worked: 351.12
   EMO hours: 160.02
7. Total paid hours: 3437.38

Question 40

End of Ch Q#2:
Calculate the Direct RN to Patient Ratio for the Neuro unit using the following
information. Required data is included in the shaded boxes.
Critical Thinking Exercise Table to Calculate RN to Patient Ratios
Total direct RN hrs. per 24-hours 128
Total direct RN shifts per 24-hours
Total direct care RNs in each 12-hour shift
Average Daily Census or Workload UOS 20
Direct RN to Patient Ratio per Shift 1 RN to ____ patients

Question 41

End of Ch Q#3:
A Critical Care ICU unit with the following labor standards in HPPD and a
budgeted average daily census of 20/day will need a minimum of how many
FTEs in their total paid FTEs? Required data is included in the shaded boxes.
Critical Thinking Exercise Table of HPPD Classifications for FTE Calculations
Pay Period HPPDs FTEs

Budget Average Daily UOS is 20/day x 14 = 280
1 FTE/ Pay Period = 80 hours
1. Direct RN HPPD: 14.87
2. Direct NA/Tech HPPD (staff that flex in the VSP): 2.8
3. Total Direct HPPD: 17.67
4. Total Indirect HPPD (e.g., manager, clerks etc.): 2.03
5. Total Worked, or Productive HPPD: (Direct RN + NA/Tech) 19.70
6. Total nonproductive HPPD: 2.758
7. Total paid HPPD: 22.458

Question 42

End of Ch Q#4:
4. Please complete the calculations in the Direct Care Variable Staffing Plan table to
maintain the budget direct, RN and NA HPPD and Target direct caregiver ratios
for each level of census between 25 and 30 patients. Round your answers to 2
characters to the right of the decimal point (XX.XX).
Critical Thinking Exercise Direct Care Variable Staffing Plan for ICU
pg 153