TOPIC 3: Financial Management

Question 1

-Planning, organizing, directing, and controlling the financial activities of an organization.
-Efficient and effective management of money (funds) to achieve the goals of the organization.

Answer 1

Financial Management

Question 2

-Lack of funds.
-Mal-distribution of resources.
-Rising cost of medical care.
-Wastage of resources.
-Inefficiency in spending.
-Lack of coordination.

Answer 2

Health Financing Problems

Question 3

-Helps businesses achieve short- and long-term financial goals.
-Aims for high ROI (return on investment) for stakeholders.
-Develops long-term strategies to guide organizational health and success.

Answer 3

Strategic Planning

Question 4

Develops long-term strategies to guide organizational health and success

Answer 4

Strategic Planning

Question 5

Determines how to fund strategic goals; provides operational frameworks for future scenarios

Answer 5

Financial Planning

Question 6

refers to the department responsible for managing personnel and ensuring their productivity and satisfaction within an organization

Answer 6

Human Resource (HR)

Question 7

Key HR Functions in Laboratory Management: Collaborates with lab managers to hire skilled personnel.

Answer 7

Recruitment and Selection

Question 8

Key HR Functions in Laboratory Management: Organizes and tracks training programs for lab techniques, equipment, and safety standards.

Answer 8

Training and Development

Question 9

Key HR Functions in Laboratory Management: Sets metrics, conducts evaluations, and provides feedback to improve staff performance.

Answer 9

Performance Management

Question 10

Key HR Functions in Laboratory Management: Ensures safety training, risk assessments, and emergency drills to prevent hazards.

Answer 10

Health and Safety Compliance

Question 11

Key HR Functions in Laboratory Management: Promotes a positive work environment and provides well-being resources to address stress.

Answer 11

Employee Relations and Well-being

Question 12

Employees or teams managing HR within the organization that manage HR functions and support the workforce.

Answer 12

Internal Human Resources

Question 13

individuals or organizations outside the company that provide specialized services, support, or expertise related to human resource management

Answer 13

External Human Resources

Question 14

-provide the basis for preparing budgets. This section involves analyzing the various expenses associated with healthcare operations.

Answer 14

Costs

Question 15

Types of Costs: Expenses directly linked to producing a product or service.

Answer 15

Direct Costs

Question 16

Types of Costs: Expenses not directly related to making a product or service.

Answer 16

Indirect Costs

Question 17

Types of Costs: Costs that remain unchanged with changes in goods or services volume.

Answer 17

Fixed Costs

Question 18

Types of Costs: Costs that fluctuate with patient volume (e.g., overtime labor, medical consumables)

Answer 18

Variable Costs

Question 19

Approaches to Cost Management: Evaluate financial and patient outcome benefits versus costs.

Answer 19

Cost-Benefit Analysis

Question 20

Approaches to Cost Management: Standardizing supplies.
Outsourcing non-core services (e.g., IT, laundry).

Answer 20

Cost-Control Mechanisms

Question 21

Approaches to Cost Management: Tracks costs by healthcare service, enabling better pricing and cost-cutting.

Answer 21

Activity-Based Costing (ABC)

Question 22

A plan describing authorized expenses for a specified period.

Answer 22

Budgeting

Question 23

Types of Budgets: Covers ongoing day-to-day costs (supplies, personnel).

Answer 23

Operating Budget

Question 24

Types of Budgets: Focuses on long-term investments (facilities, equipment).

Answer 24

Capital Budget

Question 25

Types of Budgets: Fixed allowance for specific purposes.

Answer 25

Static Budget

Question 26

Types of Budgets: Adjusts to patient numbers or demand fluctuations.

Answer 26

Flexible Budget

Question 27

Types of Budgets: Supports project-based initiatives.

Answer 27

Development Budget

Question 28

Approaches to Budgeting: Starts with last year’s budget and adjusts by adding or subtracting percentages.

Answer 28

Incremental Budgeting

Question 29

Approaches to Budgeting: Assumes a baseline of zero and justifies all expenses anew. This rigorous approach helps cut unnecessary spending but requires detailed justification, making it time-intensive.

Answer 29

Zero-Based Budgeting (ZBB)

Question 30

Approaches to Budgeting: Allocates funds based on activities and services.

Answer 30

Activity-Based Budgeting (ABB)

Question 31

Approaches to Budgeting: Links budgets to specific outcomes, such as reducing patient wait times or improving patient satisfaction scores, aligning spending with quality and performance goals.

Answer 31

Performance-Based Budgeting

Question 32

involves evaluating options, assessing risk, and aligning choices with long-term goals. It is essential for achieving financial success in both personal finance and business profitability.

Answer 32

Financial Decision-Making

Question 33

Strategies in Financial Decision-Making: The process of creating a detailed financial plan that allocates funds to various laboratory activities, ensuring resources are available for equipment, supplies, and personnel.

Answer 33

Budgeting

Question 34

Strategies in Financial Decision-Making: Analyzing costs related to laboratory operations to pinpoint efficiency improvements and potential savings while upholding quality standards without exceeding budget limits.

Answer 34

Cost Analysis

Question 35

Strategies in Financial Decision-Making: Focus on strategically managing materials and finances to prioritize tools and technology that enhance research effectiveness and laboratory productivity.

Answer 35

Resource Allocation

Question 36

Strategies in Financial Decision-Making: Seeking external financial support, like grants and partnerships, to fund research and enhance lab facilities while assessing the financial impact of each opportunity.

Answer 36

Funding

Question 37

Strategies in Financial Decision-Making: The identification and assessment of financial risks related to laboratory operations, with the implementation of strategies to mitigate potential impacts on financial stability.

Answer 37

Risk Management

Question 38

The method by which a company promotes and sells a product or service to generate an income.

Answer 38

Generation of Revenue

Question 39

-Also known as sales or turnover.
-the amount of money a company brings in through its operations, measured over a set amount of time.
-refers to the total income generated from selling goods or services during a specific period.

Answer 39

Revenue

Question 40

-is the amount left after subtracting all costs and expenses from revenue.
-is also known as the “bottom line” because it appears at the bottom of the income statement.

Answer 40

Profit

Question 41

Types of Revenue: Primary income from core laboratory services, such as routine blood testing, clinical chemistry, microbiology, and pathology.

Answer 41

Operating Revenue

Question 42

Types of Revenue: Regular, predictable revenue from repeat services or long-term contracts.

Answer 42

Recurring Revenue

Question 43

Types of Revenue: One-time income from individual services provided as needed.

Answer 43

Transaction-Based Revenue

Question 44

Types of Revenue: Revenue from all types of lab services, covering testing, consulting, and specialized diagnostic work.

Answer 44

Service Revenue

Question 45

Strategies in Generation of Revenue: A set of initiatives or actions taken to improve the sales process based on past successes, failures, or processes. This includes refining messaging, tailoring pitches, and strengthening follow-up practices to directly enhance the ability to close deals.

Answer 45

Sales Optimization

Question 46

Strategies in Generation of Revenue: Implementing competitive and dynamic pricing models to boost revenue. This includes discounts, bundling, and tiered pricing to appeal to various customer segments.

Answer 46

Pricing Strategies

Question 47

Strategies in Generation of Revenue: Developing additional products or services to attract a broader customer base and increase revenue streams. This involves market research and innovation to ensure new offerings align with customer needs.

Answer 47

Product and Service Diversification

Question 48

Strategies in Generation of Revenue: Adding new, in-demand tests (e.g., molecular diagnostics, allergy panels, genetic testing) to attract a wider audience and meet specialized demands.

Answer 48

Expanding Test Offerings

Question 49

Strategies in Generation of Revenue: Adopting an advanced Laboratory Information System (LIS) to streamline workflows, automate billing, and reduce errors in coding and claims. Automation also optimizes sample tracking, quality control, and billing, minimizing manual errors and administrative time.

Answer 49

Leverage Technology and Automation