Healthcare Management Exam 3 Review

common healthcare sources of revenue

operating (medicare/medicaid, private insurance), non-operating (grants or donations)

factors that cause unpredictability in revenue flow

• fluctuation in number of patients served

• variable payment practices of third party payers

• fines and penalties assessed due to billing errors

• delays in collecting copay and deductibles

• revenue never received (uninsured)

• changes in reimbursement system

cash is king

enough cash must be kept on hand to cover the amount of outgoing bills and payroll

expenses: major budget categories

• capital expenses (equipment)

• supplies (consumables)

• special expenses: equipment lease or rental, contractual services, maintenance and repairs, specialty references (books and software), software license fees, staff training and development

• personnel budget (wages, salaries, benefits)

factors in wage and salary calculations

• state/federal minimum wage laws

• union contract stipulations

• organizational wage and salary scale

• cost of living increase

• area wage and salary consideration

• merit raise or bonus pay

• special adjustments (ex: longevity employment)

budget

a plan expressed in terms of projected activity and proposed expenditures

principles of a sound budget

• sound organizational structure: clear budget responsibility

• a consistent, defined budget period

• the development of adequate statistical data

• a reporting system that reflects the organizational structure

• a uniform code of accounts, which provides a standardized way to classify expenses and other transactions

• an audit system for the timely explanation of variances is implemented

the budget as a plan

• a statement of anticipated results (ex: expected revenue)

• a basis for future or continuing plans

• a statement of intended accomplishments; more than a forecast or guess

the budget as a control tool

• provides accountability

• a basis for monitoring the use of resources

• a basis for comparison of planned vs actual performance

fiscal year

• defined, sequential period

• often the same as the calendar year, the most common cycle, with 12 accounting periods

• another possible increment includes 13 4-week periods (ex: payroll)

long range budget

associated with special projects and/or capital improvements; may cover 3-5 years (or longer)

periodic moving budget

as each period (ex: three or six months) is completed, an equal time period is added; allows the manager to use the most up-to-date projections

milestone budgeting

associated with major initiatives; budget periods are not uniform; they are tied to the projected timeframe for the major activities of the project

types of budgets

• master, composite

• departmental

• revenue and expense

• personnel and labor

• production (activity forecast)

• fixed

• variable (including the step budget)

FTE

full time equivalent, 1 FTE = 40 hours/week or 2080 hours/year (if a nurse works 39 hours in a 40 hour work week, that would be the equivalent of 0.75 FTE’s of work)

zero-based / planning-programming budgeting system (ppbs)

• planning oriented

• past dollar allocations are not the basis for new projections

• cost justification based on various aspects of project

• longer time periods (as years, for a major project)

• time consuming: all basic assumptions questioned

• potential downside of reopening old conflicts

• best use: for one-time, major project

incremental budgeting

• immediate past year(s) budget is increased by some percentage

• generally used with annual budget period

• an efficient, practical approach when no major changes anticipated

• object oriented, categories of personnel, materials, etc

• potential downside: significant changes might be overlooked

• ongoing programs, methods, practices are not challenged

budget process: initial preparation

• overall limits set by top level management

• department manager reviews and updates assumptions

• priorities and initiatives for coming year noted

• detailed projections of income and cost developed

budget process: review and approval

• budget justification review with senior officials

• compromise, bargaining

• cost containment review

• external review by public review boards, if program is subject to such analysis

budget justification

support documentation for specific requests (ex: equipment specifications, cost comparison, projected training needs, detailed calculations of dollar amounts)

budget process: implementation

• approved allocation is activated

• periodic reconciliation of planned vs actual expenses

• budget variances accounted for

• potential for budget cuts or budget “freeze”; contingency plan made

• periodic internal and external audit

budget cut

• reduce or eliminate specific expenditures

• tie to budget justification information

• identify categories of desired vs essential expenditures

• identify categories that cannot be cut (ex: a contracted sign on bonus)

variance analysis

the primary purpose is to obtain information with which to improve financial planning and to correct practices that affect expenditures

the general audit

• audit trail: track each expenditure from its approved budget entry through its actual expenditure

• ex 1: trace employee payment by employment record, job title, hours worked, paycheck issued and processed

• ex 2: trace equipment purchase by purchase requisition, installation date, the actual location at time of audit, and entry of appropriate information in master inventory of equipment

training for quality and motivation

• training and development programs have a huge role in molding the behavior of individuals to meet organizational needs

  • fosters a culture of excellence

  • help employees advance in their professional goals

  • stay up to date with latest trends

  • helps staff be more productive and satisfied in their work

  • inadequate orientation and training can result in an increase of short-term turnover

employee development

• required as part of licensure and accreditation

• sometimes included as a labor contract stipulation

• part of continuity operations and succession planning

• important aspect in promoting employee satisfaction

general orientation

• brief history of the organization and its mission

• identification of departments and services

• employee policies

departmental orientation

• department mission and goals

• organization chart of department

• policies and procedures

• productivity and quality improvement monitors

standards of conduct and behavior

• conflict of interest (financial interests, gifts and perks, employment relationships, etc)

• use of organizational assets and information

• referral practices

• employee privacy

• patient confidentiality

• employee relationships

components of an effective training program

1. identify training needs

2. establish training objectives

3. select appropriate methods and techniques

4. implement the program

5. evaluate the training outcomes

identification of training needs

• comparison of job requirements with current or new employee skill set

• analysis of performance ratings

• analysis of personnel records (ex: tardiness, absenteeism, safety)

• analysis of short and long term plans

• analysis of current trends, laws, and standards

• “just in time” training

components of training objectives

• statement of focus

• level of mastery or acceptable performance

• any conditions associated with the work tasks

• a time frame or performance standard for each stage of the training program

training methods and techniques

• job rotation

• formal lecture presentation

• seminars and conferences

• role playing

• committee assignments

• case studies

• mentoring and peer pals

• coaching

implement the program

• monitor the physical and psychological environment

• provide the best possible educational impact while maintaining work output

• control the pace and timing of the training to help maintain engagement

evaluation of outcomes

• direct before and after comparison

• fact tests

• performance tests, based on the usual work content

• evaluation in stages: practice activity; real work activity with continuous supervision; real work activity with decreasing supervision

clinical affiliation programs and contract

• clinical affiliation is often used because it fulfills the mission of many healthcare organizations: research and education

• organizational leadership will need to determine the overarching policies for receiving students and management will prepare the department and staff for receiving them

• receiving students not only helps fulfill and organizational mission, but it allows sites to see potentially good future employees; conversely students can help identify good potential employers

clinical affiliation contract

• element of contract/agreement include:

  • importance of definition of trainee

  • liability insurance is covered by the academic institution

  • intellectual property and copyrights

fostering integration into the organization

• work rules (policies, procedures, customary practices)

• sanctions (to induce compliance)

• selection (for organizational fit)

• training (for technical readiness)

• identification with organization (enhanced)

• the work group (and its reinforcement)

theories of motivation

• the art of motivation is built on the recognition of human needs

• motivation is the degree of readiness or desire within an individual to pursue some goal

• as self-motivation increases, the need for discipline decreases

motivators

• sense of accomplishment

• acquire new knowledge

• work is challenging and interesting

• work is meaningful

• can staff assume responsibility?

• are staff involved in determining how the work is done?

dissatisfiers

• salary administration is not perceived as fair

• there is no potential for promotion or growth

• personnel policies do not seem fair to the individual and/or relative to other employees

• working conditions don’t seem to promote well-being relative to what is expected

• communication in all its forms is lacking: responsiveness, regular feedback, confidentiality, organizational plans

motivational strategies

• performance appraisal

• job rotation, enrichment, and/or enlargement

• delegation

• awards and honors

• career ladders and parallel-path progression system

appreciative inquiry

• an approach to organizational change, development, and assessment

• identify what is what is working well by actively recalling successes

• affirm the best of the individual and group experiences

• build on positive outcomes to envision continued improvement

model for analyzing organizational conflict

• the basic conflict:

  • overt; hidden agenda

  • source of conflict

• the participants: immediate, secondary, audience

• provision of arena

• development of rules

• strategies for dealing with the conflict

sources of conflict

• the nature of the organization

• the organizational climate and/or structure

• individual vs organizational needs

• solutions to previous conflicts

the conflict model

progressive discipline

• counseling

• oral warning

• written warning

• before suspension

• suspension and discharge

• discipline maintains order and ensures consistent performance

  • progressive discipline involves escalating consequences—verbal warnings, written warnings, suspension, and termination— allowing employees opportunities to correct their behavior

collective bargaining agreement

the typical collective bargaining agreement (“union contract”) will address all or most of the elements listed in the model agreement. in many instances, contractual conditions will limit decision-making flexibility, essentially providing “pre-made” decisions

communication definitions

• the exchange of ideas, thoughts, or emotions between or among two or more people

• the transfer of meaning and the development of mutual understanding

• the process of exchanging information in such a way that mutual understanding is achieved between two or more people

• includes: verbal (spoken) communication, nonverbal (intentional and spontaneous body language). these are inseparable and both critical

• communication is a commonly overlooked skill

a manager’s day to day communications

face to face communication

• involved parties hear the words, perceive vocal tones, observe facial expressions and body language, and have the opportunity for immediate feedback and response (includes hallway conversations and meetings)

• strongest means of communication, however, there may be no record

communication via telephone

• involved parties hear the words, perceive vocal tones, and have the opportunity for immediate feedback and response

• using traditional tools, parties lack exposure to facial expressions and body language

• video calls improve the ability to receive nonverbal communication

• provides the opportunity for immediate feedback and response

• there may be a record that it took place, but there may be no record of content, unless it was recorded