Sxu finance 2017
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This document discusses several key concepts in healthcare finance including budgets, costs, financial statements, and payor sources. It explains that nurses should recognize the financial impact of daily decisions and be aware of concepts like staffing costs, supplies, budgets, revenue sources, and payor mix. The document provides examples of operating budgets, capital budgets, variance analysis, and break-even analysis. It also outlines major sources of healthcare payment including Medicare, Medicaid, managed care, and fee for service.
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1. Responsibility accounting in modern health care organization is a type of management accounting which collects and reports both planned and actual accounting information in terms of responsibility centers about the inputs and outputs of responsibility accounting.
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Introduction
This chapter describes methods for assessing the financial health of hospitals and safety net institutions. The examples used are drawn principally from hospitals, but the principles and approaches apply to clinics and other safety net providers. The chapter discusses:
What is meant by financial health of institutions.
Alternative approaches and measures available to assess hospital financial health.
How these approaches and measures can be implemented using alternative data.
Issues and complications in interpreting this data.
The goal of this chapter is to enable the reader to identify potential measures, data sources for implementing these measures, and conceptual and accounting issues in implementing and interpreting these measures. It is not intended to be a primer on accounting or financial management, although accounting and financial management concepts are discussed (Lane, Longstreth, and Nixon, 2001).
Return to Contents
Measuring the Financial Health of Safety Net Hospitals
One definition of the financial health of an institution is its ability to continue to operate as a going concern. There are three dimensions to this ability:
1. Revenues and expenses must be in balance.
2. Adequate resources (that is, capital) must be available to deliver services and finance operations both in the short and long term.
3. The institution must be able to replenish or renew itself.
The first two dimensions are explicitly captured in a variety of measures; the third, ability to renew, is generally inferred from a range of data.
Revenues and Expenses
The first dimension of financial health is that revenues and expenses be in balance. More generally, we should expect that revenues at least match expenses ("break even"), and most financial analysts would expect an institution's revenues to exceed expenses, so as to finance increases in working capital and build funds as a cushion for a financial downturn and for renewal or expansion. The standard measure of profitability is margin:
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(Total revenues from all sources - Total expenses) Total .
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DISUSSION BOARD DUE WEDNESDAY 250 WORDSBuying expensive item.docx
DISUSSION BOARD DUE WEDNESDAY 250 WORDS
Buying expensive items is not easy for individuals with limited economic resources. Even though the budgets of most health care organizations (e.g., hospital, clinic, doctor’s office) are significantly larger than the budget of the average American family, most of these organizations operate with limited resources too. Health care managers use planning and budgeting information to make resource use decisions.
To prepare
for this Discussion, complete the readings in your Learning Resources. Think about a significant purchase you have made in the past. How did you pay for it? Did you shop around for the best deal? What was the impact on your own budget and finances?
Post
a comprehensive response to the following:
Share an example of something that you had to budget and plan to pay for. How does your personal decision-making process differ from what you learned about planning and budgeting in health care?
How do most individuals monitor and control their cash flow? Provide specific examples.
How does the monitoring of cash flow of a health organization compare to the monitoring the cash flow for individuals handling their personal finances? Explain your choice.
Be sure to support your work with specific citations from this week’s Learning Resources and/or additional scholarly sources as appropriate. Your citations must be in APA format. Refer to the Essential Guide to APA Style for Walden Students to ensure your in-text citations and reference list are correct.
_____________________________________________________________________________
ASSIGNMENT DUE SATURDAY
A financial manager's responsibilities do not cease after he or she develops a budget for execution. On the contrary, the manager's job begins with a completed budget. The manager must track the execution of the budget approved by senior leadership to meet financial goals. Since trends, costs, and other externalities can cause changes or variances in the budget, the financial manager must monitor and adjust spending when necessary to account for those variances.
Even with relatively good control, taxes, rounding effects, and unexpected price increases can negatively affect budget execution. Nickels and dimes add up quickly. If unaccounted for and not closely tracked, those nickels and dimes can derail even the most carefully considered financial plan. Overspending can pose serious threats to projects and the availability of resources for future projects. Under spending can indicate a problem in quality control. Under spending may be a good thing (due to improved efficiency) or it may also be bad (manufacturers cutting corners, which may result in inferior product). The bottom line to remember is that variance happens and health care managers must respond effectively.
To prepare
for this Application Assignment, review the Northeast Health System 2011 Annual Report. As you review, analyze the concept of variance. Consider what fa ...
How to Save Money on Group Health Insurance
This document summarizes a tool called SuperAgent that helps users compare health insurance plans. SuperAgent allows users to quickly submit employee information, allocate budgets, compare over 400 plans based on cost and quality, and enroll in plans online. It provides transparent comparisons that can save small businesses an average of $700-1000 per employee per year by helping them select the most cost-effective plans. The document explains how SuperAgent's web-based comparisons simplify the confusing process of choosing health insurance.
Chapter4
This chapter discusses the economics of healthcare and the transition from traditional to contemporary perspectives on healthcare costs. It covers key concepts like scarcity, choice, preference, and the differences between healthcare and typical markets. It also analyzes factors like direct and indirect costs, fixed and variable costs, budgets, high-low cost analysis, regression analysis, break-even analysis, and approaches to measuring quality.
PSA 1 Break-Even Analysis FINAL
This document discusses break-even analysis as a method for managers to evaluate the relationship between costs and revenue. It provides an example of how break-even analysis was used by the Urban League of Philadelphia to determine the costs and fees for a new after-school program. The document outlines the fixed and variable costs for the program. It then shows the break-even calculation of total costs divided by the number of students to determine the fee per student needed to break even. The committee decided to charge a slightly higher fee to allow for potential losses. This analysis allowed the committee to set affordable fees for parents using the program.
Ac Os Bundled Payments
The document discusses opportunities around accountable care organizations (ACOs) and bundled payments under healthcare reform legislation. It outlines proposed ACO pilots that would test payment models to reduce costs and improve outcomes. It also discusses proposals for bundled payment pilots for post-acute care services beginning in 2011. Key questions are raised around which providers can participate in ACOs, what organizational structures and partnerships may look like, and how providers can position themselves for these new models.
Health economics
This document defines key concepts in health economics. It discusses definitions of health, economics, and health economics. It explains the laws of supply and demand, and how they relate to price and quantity. Factors that can influence supply and demand are described. The document also outlines different types of economic analysis used in health care, including cost-benefit analysis, cost-effectiveness analysis, and cost-utility analysis. Reasons for rising health care costs and influences on health care demand and supply are provided. The concepts of cost control and family budgeting for health care are defined.
HE_JF 07_Feature 1_jad ghostwrite
This document discusses factors to consider when setting healthcare prices, including desired net income, competitive position, and market structure. It recommends conducting a pricing study using hospital claims data and charge description master to identify opportunities for selective price increases in areas with higher recovery rates. This approach is usually more effective for increasing profits than across-the-board price hikes. The study should also account for costs, competitors' prices, contracts, and the goal of having defensible prices that do not appear excessive.
Research several types of reimbursement methods for healthcare for.docx
This document provides an outline for a paper comparing different methods of healthcare reimbursement in Saudi Arabia. It includes sections on introducing reimbursement, elements of reimbursement like coverage and coding, types of reimbursement like fee-for-service and capitation, comparing advantages and disadvantages of different methods, impacts on healthcare facilities, and trends in healthcare reimbursement. Sample text is provided for several sections, including definitions and examples of fee-for-service reimbursement methods, capitation, and value-based purchasing. The document aims to serve as a starting point for a thorough comparison of reimbursement methods in the Saudi healthcare system.
Keeping Costs Under Control.docx
This document discusses two perspectives on healthcare costs and quality - value-driven healthcare and measuring care for traditional fee-for-service. It provides an assignment for students to analyze one of these perspectives by identifying an organization implementing a relevant initiative, summarizing the initiative and how it impacts costs and quality. Students are asked to discuss how risk should factor into cost control decisions. The document also provides an assignment for students to analyze financial documents (balance sheets, income statements, cash flow statements, ratio analysis) from the perspective of a healthcare manager and how these would be used to manage costs, quality and efficiency.
The Need to Embrace Profit Cycle Management in Healthcare - Whitepaper
Executive Overview
Healthcare organizations have been operating under a fee-for-service
model for many years. As such, financial leaders have become well
versed in implementing revenue cycle management systems and
processes that primarily focus on the money that comes into an
organization. Today, a new need is emerging. Healthcare reform
and other system changes are moving the industry toward hybrid
payment models such as bundled payments, shared savings, and
capitation. To thrive in this new environment, financial leaders need
to move toward profit cycle management – an emerging model
that matches the revenues from new payment models with an
improved understanding of the true costs to deliver patient care.
The result: Positive financial performance – even in the face of
declining payments – that can be reinvested in the mission to
provide better care.
The foundation of any business or household is profit, defined as
revenue net of expenses (and applicable as such even to not-for-profit
organizations). Regardless of whether you are start-up, a Fortune 500
company, or a family of four, you need to ensure that you are bringing
in more money than you are spending. In many businesses, the
formula to determine your “profitability” is fairly straightforward.
In healthcare, however, the situation is significantly more complex,
as existing and new payment models make it difficult to determine
exactly how much revenue is going to come in the door. On the cost
side, the move to accountable care and value-based payment has
shifted the management of risk and cost onto the providers and
delivery networks, yet most providers lack the tools that would
provide a detailed understanding of the costs required to deliver
quality care, especially when that care is delivered in multiple
locations. A new model of software tools is required – representing
the next generation of revenue cycle management tools and an
emerging class of healthcare cost accounting tools. The end goal?
A solution for profit cycle management that will help organizations
generate a positive financial performance and can be reinvested
in the mission to provide better care.
This change will not happen overnight. Rather, it will be an evolution
over the next five years, as integrated delivery networks update
their revenue cycle solutions to accommodate the new payment
models, and as they deploy new activity-based costing solutions.
Health care cost
The document discusses various concepts related to costs in health economics. It defines costs as the value of resources used for the production of good health. There are different types of costs including accounting costs, economic costs, opportunity costs, direct costs, indirect costs, average costs, and marginal costs. Accounting costs focus on past expenditures while economic costs also include opportunity costs. Direct costs are those directly related to an intervention while indirect costs are related to productivity losses. Understanding different types of costs is important for economic evaluation, priority setting, and making efficient management decisions in health care.
CBO's Cost Estimates
Presentation by Peter Fontaine, CBO's Assistant Director for Budget Analysis, to a Global Network of Parliamentary Budget Offices Community Meeting Sponsored by the World Bank Institute
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Sxu finance 2017
- 1. Health Care Finance Issues SXU 2017 Diann Martin, PhD, RN
- 2. Major Concepts in FINANCE Budget ; operating budget, annual budget, capital budget COSTS: fixed, variable Variance Analysis Financial Statements Cost/Benefit Analysis Break Even Analysis
- 3. Nursing Responsibilities Recognize financial impact of daily decisions Staffing, salaries, scheduling, case-mix Supplies and services Cost vs Quality Decisions Avoiding rework, waste and duplication of expenses Awareness of financial plan and financial well being of facility Payor mix and revenue cycle
- 4. Budgets in Healthcare Operating Budget: annual financial plan for the facility matches revenue (by source) with expenses Capital budget: generally funds large asset purchases for equipment, facilities and programs –can be depreciated overtime and listed as a resource on the balance sheet of the facility Variance analysis: periodic (monthly) matching of revenue with expenses to track net income or revenue as a snap shot of financial health of the entity Contractual allowance: difference between gross charges and revenue paid by a billng source – similar to a discount-often negotiated by 3rd party payors Payor mix: the % of income from various payors –each is likely to be different and many are less than charges
- 5. Payor Sources Governmental Medicare: pays based on DRGs via prospective payment that is diagnostic specific and adjusted for age, complications and comorbidities Now pay for performance adjusted ie, readmission within 30 days with same diagnosis, complications Medicaid: state funded, usually a per diem rate that varies by state –some are below cost and some are at cost, state has final rate setting responsibility and coverage criteria Managed care: generally negotiates a daily or per case rate Fee for service: based on cost of care or a % of cost
- 6. Budget Process Determine payor mix, expected service delivery by unit or service line Adjust total revenue for contractual allowances and discounts Calculate gross revenue and income from non patient care services Determine expenses : labor and supplies are largest components Fixed Variable Capital budget to fund large projects and services >10,000/year Approval by governing body
- 7. Break Even Analysis A break-even analysis is an analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point. This is the amount that revenues can fall while still staying above the break-even point. Read more: Break-Even Analysis Definition | Investopedia http://www.investopedia.com/terms/b/breakevenanalysis.asp#ixzz4Enl8csTS Follow us: Investopedia on Facebook
- 8. Break Even Example : TENS UNITS Break-even analysis is a supply-side analysis; that is, it only analyzes the costs of the sales. It does not analyze how demand may be affected at different price levels. For example, if it costs $50 to produce a TENS Unit , and there are fixed costs of $1,000, the break- even point for selling the widgets would be: If selling for $100: 20 TENS UNITS(Calculated as 1000/(100-50)=20) If selling for $200: 7 TENS UNITS (Calculated as 1000/(200-50)=6.7) In this example, if someone sells the product for a higher price, the break-even point will come faster. What the analysis does not show is that it may be easier to sell 20 TENS Units at $100 each than 7 TENS UNITS at $200 each. A demand-side analysis would give the seller that information. Read more: Break-Even Analysis Definition | Investopedia http://www.investopedia.com/terms/b/breakevenanalysis.asp#ixzz4Enluf3iS Follow us: Investopedia on Facebook