Read Chapter on Davis Plus: Finance
1-Mention the types of budgets that you know and give examples of then?
2- What is budgeting?
3- What is directed and indirect cost?
4- Give examples of productive and non-productive hours?
5- What does HMO, PPO, POS means?
A) Mention one example of each of then in your city, or state?
6- What is DRGs.?
7- Give some examples of strategies for Cost-conscious nursing practice that your Nursing unit use to lower medical care cost?
Expert Solution Preview
Introduction: In this content, we will discuss various topics related to finance in the healthcare industry. These topics include different types of budgets, the concept of budgeting, directed and indirect costs, productive and non-productive hours, HMO, PPO, POS, DRGs, and strategies for cost-conscious nursing practice.
1) Types of budgets that I know and examples of them:
– Operating Budget: This budget includes the projected revenues and expenses for a specific period, usually one year. An example of an operating budget is a hospital’s budget for the upcoming fiscal year, outlining anticipated costs for staff, supplies, equipment, and other operational expenses.
– Capital Budget: This budget focuses on major investments in long-term assets such as buildings, equipment, and technology. For instance, a medical college may develop a capital budget to plan for the construction of a new research facility or purchase advanced medical equipment.
– Cash Budget: A cash budget outlines the projected inflows and outflows of cash in an organization. For example, a healthcare clinic may create a cash budget to track cash inflows from patient payments and cash outflows for rent, utilities, and salaries.
2) Budgeting is the process of developing a plan for managing and allocating financial resources within an organization. It involves estimating income, predicting expenses, and setting financial goals. Budgeting helps organizations monitor their financial performance, make informed decisions, and ensure that limited resources are allocated effectively.
3) Directed costs refer to expenses that directly contribute to the production of goods or services. These costs can be easily traced to a specific cost object. Indirect costs, on the other hand, are expenses that cannot be directly attributed to a particular cost object and need to be allocated or apportioned. For example, in a hospital setting, the salary of a surgeon would be a directed cost for a specific surgery, while the utility costs for the entire hospital would be an indirect cost.
4) Productive hours are the hours during which healthcare providers actively engage in patient care or perform tasks related to patient care. Examples of productive hours include time spent in direct patient care, surgeries, diagnostic procedures, or consultations. Non-productive hours, on the other hand, are hours spent on administrative tasks, meetings, trainings, or breaks.
5) HMO stands for Health Maintenance Organization, PPO stands for Preferred Provider Organization, and POS stands for Point of Service. These are different types of health insurance plans with varying levels of flexibility and costs for healthcare consumers.
– An example of an HMO in my city is XYZ Health Plan, which offers a network of primary care physicians and specialists for its members.
– ABC Insurance Company provides PPO plans that allow their members to choose healthcare providers outside of the network if desired.
– In our state, DEF Health Services offers a POS plan that provides coverage both within and outside of their network, depending on the member’s choice.
6) DRGs stands for Diagnosis Related Groups. It is a system used for classifying inpatient hospital cases into groups based on similar diagnoses and treatments. The purpose of DRGs is to standardize hospital payment and facilitate the comparison of healthcare data. Each DRG has a predetermined payment rate, which allows for efficient reimbursement and resource allocation.
7) Some examples of strategies for cost-conscious nursing practice to lower medical care costs may include:
– Implementing evidence-based practice guidelines to reduce unnecessary tests and procedures.
– Optimizing the use of resources, such as medications and supplies, to minimize waste.
– Promoting preventative care and patient education to prevent costly complications or readmissions.
– Collaborating with interdisciplinary teams to streamline processes and reduce redundancies.
– Implementing telehealth services to provide cost-effective remote patient monitoring or consultations.
– Participating in quality improvement initiatives to identify and address inefficiencies in care delivery.
These strategies aim to maximize resources, minimize expenses, and ensure the delivery of high-quality, cost-effective healthcare.
