Session 2 - Financial Management Flashcards
(62 cards)
Acuity
severity of illness
Assets
the financial resources an organization has/receives.
Average Length of Stay (ALOS)
average length of time patients are staying in the hospital.
ADC (Average Daily Census)
The average number of patients on an in-patient unit at a certain point in time for a set period of time (week, month, year), almost always collected at midnight.
Bad Debt
Losses due to uninsured or not collected.
Break-even
the point at which cost is covered by revenue. This concept is often used during decision making process for equipment purchasing and program development.
Capital Budget
long range planning tool for organizations; also refers to items that cost over a certain amount of money $500, $1000, $5000.
Capitation
payment arrangement where providers are paid a pre-arranged amount for each person/ member assigned to them over a certain period of time often whether they use it or not.
Charitable Care
healthcare provided for free or at reduced prices to low income patients.
- CMI- Case Mix Index (CMI)
the average relative DRG weight of a hospital’s inpatient discharges, calculated by summing the Medicare Severity Diagnosis Related Group (MS-DRG) weight for each discharge and dividing the total by the number of discharges. The CMI reflects the diversity, clinical complexity, and resource needs of all the patients in the hospital. A higher CMI indicates a more complex and resource intensive case load. Although the MS-DRG weights, provided by the Centers for Medicare & Medicaid Services (CMS), were designed for the Medicare population, they are applied here to all discharges regardless of payer. Note: It is not meaningful to add the CMI values together. *
Contribution Margin
The profit that is contributed by a cost center without the indirect costs.
Cost-Benefit Ratio
a way for an organization or department to weigh/analyze the cost of an item/project/program with the benefit. Analysis may include non-monetary value such as charity care and community benefit.
Depreciation
amount written off annually on a piece of equipment and buildings.
Direct Costs
costs that can be attributed to a specific item or cost in a department’s or projects budget. Examples include salaries, admission kits etc.
Diagnosis Related Groups (DRGs)
categories of diagnoses defined by Medicare for payment purposes.
Fiscal year
The period of time or cycle that a 12-month budget addresses. Most common cycles include calendar year January 1st-Dec 31st or academic year September 1-August 31st.
Fixed Expenses
Remain the same regardless of the number of patients such as mortgage or loan payments.
Forecasting
The process by which a department or organization translates future needs of a new program or budget into resource needs and financial terms.
Full Time Equivalent (FTE)
2080 hours in a year for a 40-hour work week (may be different for other types of shifts).
Gross Revenue
(AKA Gross Patient Revenue)
total amount of hospital charges.
Hours per Patient Day (HPPD)
of hours worked/# of patient days
Indirect Costs/Expenses
cost not directly chargeable to one cost center or activity such as housekeeping and office supplies.
Liabilities
financial obligations of an organization i.e. bills to pay.
Margin
Difference between what is actually collected from payers and total expenses. Usually reflected in %.
