N487 Leadership in Nursing: Fiscal Planning and Responsibility
Define a personnel budget
(most expensive) Accounts for the majority of health-care organization's expense this is why understaffing or overstaffing is looked at so often throughout the day
Explain Zero based budgeting
(used the most) Start over "at zero" and re-justify your programs or unit needs each year Pro: budget is current Con: Takes a lot of time
What are the Budgeting Principals for the nurse manager
Fixed Expenses Variable Expenses Controllable Non-controllable
Define fixed, variable, controllable, and non-controllable expenses
Fixed Expenses-do not vary with volume Variable Expenses- vary weekly, hourly Controllable- can be controlled by the manager Non-controllable - cannot be controlled by the manager
What are the two types of managed care
Health Management Organization (HMO) - covers many services, but must remain in network and focus on preventative medicine Preferred Provider Organization (PPO) - must see doctor in network (gets discounts for doing so) or pay a higher co pay, has more independence for the patient
Explain productivity
In staffing models, you are using the appropriate number of staff
What are 4 types of budgeting methods
Incremental budget Zero based budgeting Performance Budget Flexible budget
What is a Chargemaster
Used to bill items to patients. Used to negotiate payments from private insurance companies Not regulated (markup items) average markup is 432%
explain the steps in the standard staffing model (will be on FINAL EXAM)
1. add up all of the work hours (total for all staff) 2. divide by the census at midnight
what is the FTE staffing model
1.0 FTE = 40 hours 0.9 FTE = 36 hours 0.8 FTE = 32 hours
What is a budget?
A plan that uses numerical data to predict the activities of an organization over a period of time (yearly)
using the FTE model, how does a manager determine how many FTE RN's they need
Add total number of RNs estimate to need each shift based on last years counts. Average shift showed need as ...
Value is determined by what two things
Cost and Quality
What is meant by cost effectiveness
Cost-effective means producing good results for the amount of money spent
What is the goal of a budget? A. To predict an organization's activities B. To maximize the use of resources C. To help with planning and control D. All of the above
D. All of the above
What are 4 methods everyone can use to reduce cost and improve quality
Education: Preventative care, proper discharge teaching Understanding: How much do our services/supplies cost? Feedback: What do nurses & patients/family find value added Processes: Walk the process
Explain Performance Budget
Emphasis placed on outcomes to justify continued funding. If outcomes aren't met, you will have to re-justify your budget and come up with another plan. Goal focused Pro: makes manager focus on outcomes Con: fiscal impacts can effect care
Explain the nurse/patient (ratio) staffing model
Example: 1 nurse to 4 patients in emergency rooms 1 to 2 in ICUs ...
What is an operating budget
Expenses needed to provide health care services (Electricity, supplies, maintenance, repairs)
What (6) things are needed for fiscal planning and controlling cost
Need to be aware of type of budgets used on unit Need to be able to forecast fiscal needs Need to be cost effective when possible Need to look for ways to decrease costs in both the short term and long term Need to be flexible, creative and provide vision But most of all needs to make sure that cost containment does not jeopardize patient safety
Explain the standard staffing model
Nursing Care Hours (NCH) per patient-day (PPD) Average given "budget" to an inpatient manager is 6 NCH/PPD
What are the types of budgets
Personnel Operating Capital
What is a capital budget
Plans for the purchase of buildings or major equipment
What does cost containment refer to?
Refers to effective and efficient delivery of services while generating needed revenues
Explain value based purchasing
Requires transparency in hospitals and open declaration of the cost of a surgery Forces hospitals to perform better b/c patients will shop for the better deal
Explain incremental budgeting
Simplest method for budgeting Multiply current year expenses by inflation (1.3 - 1.5%) Pro: more money each year Con: gets less reimbursement from the gov
Explain patient acuity staffing model
Take into consideration patient acuity. Still somewhat based off of the "average patient" to nurse ratio. Uses a points system (more points, more acuity) example: PCU assigns 8 points to a nurse, based on the score of a patient, the nurse could have 8 level one patients, or 2 level 4 patients
Why do nurses make a beter CFO in healthcare organizations?
They have that "front line view"; they know what is needed for care
Explain flexible budget
Works well for difficult to predict census areas (ER) Continually changes throughout the year based on census, calculated at time budget for staff, supplies. Justifies staff needs based on "now" vs historical data
What are 3 cost effective strategies
anticipated length of service need for such a service availability of other alternatives
Cost containment is who's responsibility
every health-care professional
What was the overall goal of the affordable care act
healthcare for all
Explain a prospective payment system
hospitals paid for a specific amount of days based upon the care/surgery required makes hospitals focus care and discharge
What is the desired outcome of budgeting
maximal use of resources to meet organizational short- and long-term needs
Explain a bundled payment system
similar to prospective payment system, but gives a lump amount for a patient's care out to 90 days Hospitals can acquire a lot of money if they don't spend the entire lump sum
fiscal planning includes what (5)
staff patients budget types budget methods government decisions
What is the second most significant component to a hospital's budget
supplies
ANAs posistion on healthcare reform
supportive of reform and ACA
