Financial Management Flashcards
What population do for Profit Organizations serve?
lower income
Most important note of for-profit organization?
Can lawfully release a patient that cannot pay.
Most important factor of nonprofit organizations?
Must treat all conditions/people regardless of insurance or ability to pay.
Medicare is for what individuals?
65 and over; any age End stage renal failure; any age w/ medical disabilities.
What are the 4 parts of Medicare?
- Part A: Hospital Insurance
- Part B: Medical Insurance
- Part C: Medicare Advantage plan
- Part D: Prescription drug coverage
Which Medicare part involves insurance for hospital care?
Part A
T or F: Medicare has no monthly premium for Part A
True
T or F: Medicare has no monthly premium for Part B
False–monthly premium for Part B
(and Part D)
What does part B of Medicare cover?
doctors visits and outpatient care (PT etc.)
What is Part C of Medicare?
Combined Part A (hospital care) and Part B (doctor/outpatient care)
*most also include part D (drug)
What does part D of Medicare cover?
prescription drug coverage
How does Medicaid differ from Medicare?
Mandated services for low income children, pregnant women, and elderly
Who is medicaid funded by?
government at state and federal level
What is the #1 goal of the affordable care act?
make health insurance affordable/available to all people (expand medicaid program)
Difference between self pay and charity payor systems?
Self: individual pays
charity: healthcare system receives no reimbursement for services
Which payor system is focused on preventative care?
HMO: Health Maintenance Organization
Which payor system has a predetermined set of services provided, paid as set fee?
HMO
Which payor system has an option to use in network providers at a discounted rate?
PPO: Preferred Provider Organization
Which payor system has a fixed payment for a service based on diagnosis, age, and treatment?
DRG (Diagnosis related groups)
Which payor system has reimbursement based on average cost if services?
DRGs
What is a payment made to hospital based on a DRG?
PPS Prospective payment system
Why is a PPS important?
Allows leader to form budget based on average
Which payor system is a combination of social, health, and medical services needed?
SHMO: Social Health Maintenance Organization
What payor system is defining financial incentives for hospitals to improve the quality of care provided?
P4P: Pay for Performance
What are the 4 quality measures of P4P?
- Performance
- Outcomes
- Patient satisfaction/experience
- Structures and technology (EHR)
What is included in a budget cycle?
Development, monitoring, reporting, justifying, variance analysis
What are the 4 types of budgets?
- Revenue
- Expense
- Capital
- Operating
Using the anticipated amount of income to set a budget is what type?
Revenue
Looking at fixed and variable costs is included in which budget type?
Expense
A cost that remains constant such as rental fees and contract fees is what?
Fixed cost
A cost that fluctuates based on unit activity such as census is what?
Variable cost
What type of budget does large unit items come from?
Capital
What type of lifespan does something in a capital budget have?
1 year or later
What is assigning the cost of an asset over its lifetime
amortization
What is it to expense fixed assets annually
depreciation
Which budget is based on the past years unit activity in order to predict for next fiscal year?
Operating budget
What is the number 1 expense in a budget?
Salary
How are total patient days for a year calculated?
add together daily census for 365 days
When is daily census obtained?
Midnight
What is ADC?
Average daily census
How is ADC calculated?
total patient days divided by # of calendar days
What number of calendar days do you use to get average daily census?
365
How many hours a year is a full FTE?
2080
How is FTE hours calculated?
8 hours/day X 5 days/week X 52 weeks/year
**2080 hours
2080 hours a year how many FTE
1.0 FTE
What info do you need for FTE hour calculation?
-how long shift (ex 12 hrs)
-how many shifts/week (ex 3)
-52 weeks/year
What is the HPPD
Hours per patient day
What does HPPD do?
calculates amount of nursing care necessary per patient in a 24 hr period
What is the HPPD formula?
total productive hours (divided by) total volume (ADC)
Total volume on a unit is also known as?
ADC (average daily census)
How do you calculate nonproductive time (in hours)
FTE (2080) x percentage of productive time (exam will give percentage of unproductive time)
If exam doesn’t give nonproductive percentage, what should you use?
20% nonproductive/ 80% productive
How do you determine FTE needed to staff unit? (if given ADC, nonproductive %, HPPD)
-calculate productive hours
-calculate productive hours/year
-multiply by productive time
What is bad debt?
Losses due to uninsured or not collected?
What is the amount written off annually on a piece of equipment and buildings?
Depreciation
What is a FTE workweek?
40 hours
How many hours is a full 1.0 FTE?
2080 hours
What is HPPD?
hours worked/ # of patient days
What is the difference between what is actually collected from payers and total expenses?
Margin
What is an occupancy rate?
ADC per budgeted beds
What is a profit margin?
% difference between revenue and expenses
What is a staffing mix?
Percentage of RN to other staff
Why is staffing mix important?
must use when calculating productive time
What is zero based budgeting?
budget starts at zero each year
