Test 2 Flashcards
(112 cards)
1
Q
Community services
A
MTM, chronic condition management, med rec, med adherence
2
Q
Hospital services
A
ICU, UED, ID, nutritional support, polypharmacy
3
Q
Long term care services
A
Drug regimen review, preventative care, immunizations, fall risk
4
Q
Managed care services
A
Anticoagulant, MTM, chronic condition management
5
Q
Needs assessment
A
Collection of data to assess the need for a particular service or product within a defined population - to determine if a market exists for a service
6
Q
Approaching steps to need assessments
A
What does the pt need or problem that needs to be addressed? How large is the problem?
What are the trends?
How well are the patients that need to be addressed?
7
Q
Primary research
A
Survey, interviews, pt records, more insight with location
8
Q
Secondary research
A
Research conducted for another purpose and publicly available and easier to obtain, stated, literature review
9
Q
identify pt care services
A
Use primary and secondary research - needs assessment
10
Q
Justify pt care services
A
Financial, swot, gaining preliminary approval
11
Q
Plan pt care services
A
Service planning, payment
12
Q
SWOT ananlysis
A
Strength, weakness, opportunity, threat
13
Q
Key components of pt care service plan
A
Clear service plan, mission and vision statement, defined well goals, organization structure (program/reporting), policies and procedure, staffing, documentation, program evaluation
14
Q
Collaborative practice agreement
A
Written between prescriber that says can do things under their authority
15
Q
Service driven models
A
Medicare part B
AMA billing codes for pharmacists
Private insurance
16
Q
Patient centered medical home
A
Idk
17
Q
Accountable care org
A
Primary care providers
Manage full continuum of care for a defined pt population
Acct for overall costs and quality
Referred to as the medical neighborhood
18
Q
Clinical pharmacy services
A
Evidence from the literature supports supports the value of clinical pharmacy services. Development of such services may depend on institutions pharmacy practice model
19
Q
Hiring
A
Managers should take a strategic approach to recruitment and hiring. Determine if hiring team/ search committee should be used. Develop good job description. Develop screening and evaluation process. Make job offer to desirable candidate.
20
Q
Retention
A
Engage in value proposition:
- affiliation
- work content
- career
- benefits
- compensation
- factors that motivate employees shouldn’t be in rewards and opportunities
21
Q
Comprehensive model
A
Generalist/specialist : mixed of clinical and distribution activities - require high degree of organization independency
22
Q
Patient centered/ decentral model
A
Clinical pharmacist and staff pharmacist - good for promotion of complete care - less attractive to specialized care pharmacists
23
Q
Budgeting - planning
A
The budgeting process helps identify areas where operations can be improved by eliminating inefficiencies
Ex: not receiving profit from OTC
24
Q
Budgeting- directing
A
Budgeting aids in coordinating managements decisions and actions to achieve the companies budgeted goals
EX: make a decision to make more of a profit
25
Budgeting- controlling
Involves the process comparing actual performance against the budgeted goals
Ex: reaches budget after putting it into place - make sure budget meets goal
26
Budgeting
Used in managing the operations of many pharmacy organizations - establishes specific goals, executing plans to achieve those goals, periodically comparing actual results with the goals - budget translates they pharmacy’s objectives and functional plans into monetary terms
27
List the 5 types of budgeting
1. Operating budget
2. Sales budget
3. Operating expense budget
4. Cash budget
5. Capital budget
Size and goal of the organization will determine which budget
28
Operating budget
Shows the pharmacy’s anticipated revenues and expenses for the coming 6 to 12 months - used for short term planning and financial control - master budget - based upon assumptions - expected sales and expenses - like income statement
29
Community pharmacy operating budget
Sales of goods
30
Hospital pharmacy operating budget
More personal, supplies, more detailed
31
Sales budget
Number of prescriptions expected to be dispensed for the budget period - expected prescriptions count x average prescription price (historical price)
32
Operating expense budget
Payroll, rent, supplies, advertising, and taxes
33
Controllable costs
Marketing budgets and labor costs
34
Non-controllable costs
Rent and insurance, out of control of the manager
35
Cash budget
Anticipating cash flows from 9-12 months - derived from operating budget - needed to know for inventory purchases and other operating expenses, upper level management
36
Capital budget
Pharmacies planned investment in fixed assets. Common in large orgs. Ex: installation of computer system, purchase of robotic system, major renovation of the pharmacy itself
37
Proper budgeting depends on two processes
1. Demand forecasting
| 2. Planning
38
Forecasting for existing pharmacy
Demand forecasts based on the trend of demand over the past several years. This assumption is often untrue in pharmacy due to changes in competition, regulation, economic conditions, new gov’t regulations. Must be supplemented with manager judgement - like sale % increase prediction
39
External factors - forecasting for an existing pharmacy
Those over which manager has no control (inflation, new regulations, changes in competition)
40
Internal factors - forecasting for existing pharmacy
Those which manager has some control (promotions, services, availability, marketing)
41
Three forecasts pharmacy managers develop
1. Optimistic estimates
2. Pessimistic estimates
3. What managers believe most likely will occur (normal)
42
Forecasting for a new pharmacy
More difficult, manager develop market potential (total demand in the pharmacies market area of goods and services, developed from census records and trend reports), must try to determine the area demand - depends on marketing and competition
43
Fixed budget
Based on a single level of forecasted demand, the manager develops the best possible forecast demand and base revenue and expense projections on this forecast
44
Flexible budget
Allows budget variables expenses to change in response to changes in demands. Variable expenses- increase or decrease in direct proportion to changes in demand (COGS, prescription labels and vials), preferable for pharmacies that typically experience wide or unexpected variations in demand
45
Two analyses can be made from the performance report of what budget variances occurred
1. Manager determines which variances are large enough to merit further investigation
2. For the significant variances, the manager must determine why the variance occurred
46
Pharmacy performance report has 3 columns
1. Actual revenues and expenses
2. Budgeted revenues and expenses
3. Difference between actual and budgeted revenues and expenses — budget variance
47
How to find the variance percentage
Variance (actual-budget) / budget
48
If revenue or expense > budgeted amount
Positive variance
49
Revenue or expense > budgeted amount
Negative variance
50
Favorable variance
Variance increases net income, such as a positive revenue variance or a negative expense variance (abbreviated F)
51
Unfavorable variance
Variance decreases net income, such as a negative revenue variance or positive expense variance
52
Factors that affect variance
1. Volume
2. Price
3. Mix effects/mix differences
53
Factors that affect unfavorable salary variance due to
Employees working more hours than budgeted (volume), being paid higher than budged salaries (price), using more pharmacists and less technicians (mix)
54
Favorable revenue variance for prescription sales due to:
More than budgeted number of prescriptions dispensed (volume), higher budgeted prices (price), dispensing higher than budged number of more expensive products (mix)
55
Balance sheet
Statement of financial position, snapshot at a particular time, “date of”, amounts are generally historic costs of items and not current value
56
Assets
Economic resources with potential to provide future economic benefits to a firm - cash, accounts receivable, inventories, buildings
57
Liabilities
Creditors claim, accounts payable, unearned income, notes payable
58
Shareholders equity
Owners funds provided by buying shares or by reinvesting the net assets generated by earnings - common stock, contributed capital, retrained earnings
59
What are 3 things not on a balance sheet
Cash paid for rent, COGS, depreciation
60
Income statement
Statement of operations, records companies revenues and expenses for a specific period “for the period ended” of a specific date
61
Revenues
Measure the inflows of assets from selling goods and providing services to customers
62
Expenses
Measure the outflow of assets incurred in generating revenues
63
Net income
Amount earned after recording after recording all expenses necessary to generate the sales recorded - when total expenses exceed total revenues, a net loss is incurred
64
COGS
Largest expense on income statement, used to find gross profit
65
What needs to be deducted on the income statement to get the net income
Interest and expense
66
What is not on the income statement
Assets, inventory, common stock
67
What is on the income statment
COGS, gross profit, operating expenses (salaries, insurance, rent), operating profit, interests and tax expense
68
Statement of cash flows
Reports information about cash receipts (inflows) and cash payments (outflows) during a period “for the date ended”- used as an analytical tool to assess short-term viability of a company
69
Cash flows organized into 3 major categories
1. Cash flows from operating
2. Cash flow from investing
3. Cash flows from financing
70
Operating activities- cash flows
Revenue-generating activities of a business (fines, sales, commissions, payroll, invoices)
71
Investing activities - cash flows
Payment made to acquire a long-term asset as well as cash received from their sale (purchase of fixed as and purchase of ale of securities issued by other entities)
72
Financing activities - cash flows
These constitute activities that will alter the equity or borrowings of a business (the sale of company stores, the repurchase of shares, and dividend payments)
73
What are 3 things not on statement of cash flows
Income tax expense, sales prescription, net income
74
Statement of shareholder’s equity
Displays component shareholder equity, “for the period ended” major transactions recorded on this statement - net income and the payment of dividends, re earnings, common shares
75
Vertical financial analysis
Compares single companies over time, relating current result historical performance and future performance
76
Horizontal financial analysis
Compares financial results of one company’s ratio to ratios of other similar companies, as well as to standard average industrial ratios and the internal deviation of these ratios
77
What can distort a ratio
Seasonal factors - short-term calculations
78
Four types of ratios
Profitability, liquidity, solvency, turnover
79
Profitability ratios
Gross profit margin, net profit margin, measures overall success of the company
80
Two things that influence gross profit margin
Drug prices and reimbursement formulas in third party contracts
81
Net profit margin
Determines how well the org manages operating expenses, compares performance of two or more pharmacies
82
Liquidity ratio
Current ratio, quick ratio, ability to meet its short-term financial organization
83
Current ratio
1.5 to 3 for healthy businesses, values greater than 5 are considered by some to be too high. A low current ratio < 2 indicates that the organization has low current assets (cash) relative to its current liabilities
84
Quick or acid-test ratio
Should be between 1.1 to 2. Quick ratio of less than 1.0 means that the cash that the organization on hand would not be sufficient to pay all its current liabilities. Higher than 1.0 means the organization has more quick assets than current liabilities
85
Solvency ratios
Debt ratio, debt to equity ratio, interest coverage ratio, satisfy long-term debt obligations and viability of the business to continue future operations
86
Debt ratio
Liquidity and reliance on credit
87
Debt to equity ratio
Owner’s reliance on credit
88
Interest coverage ratio
Ability to pay interest on total outstanding debt
89
Turnover ratio
Inventory turnover, receivable turnover, efficiency with which a business uses its assets
90
Inventory turnover
Low - 6 or below, org inventory too large for its operations and cash could be better spent elsewhere
High- able to sell and replace inventory with high efficacy and therefore generate higher revues and profits
6- inventory turns over every 2 mon
3- inventory turnover every 3 months
12- turns over 1/ month
91
Accounting
Encompasses all of the processes necessary to record, report, and analyze the financial activities of a company
92
Reporting
Reporting occurs with the financial statements, which represent the summarized financial activities of a business and conform to standardized formats. By adhering to standard reporting formats
93
External users
Investors, creditors, consumer, regulatory agencies, tax authorizes
94
Financial accounting
Associated with preparing reports for external users of a business, external, summarized reports quarterly reports, focus on the past, help with investment and credit decisions
95
Managerial accounting
Used to guide management in making financing, investing, and operations decisions for the company, internal (companies managers), internal reports, detailed reports on a weekly or daily basis, concern about how reports affect employee behavior, focus on the future
96
Financial statements useful for
Business to generate cash, derive financial ratios from the statements that can indicate the condition of the business, investigate the details of certain business transactions
97
Generally Accepted Accounting Principles (GAAP)
Relevant, reliable, comparable information
98
Financial accounting standards boards
Private group that sets both broad and specific principles for america companies
99
Securities and exchange commission
Government group that establishes reporting requirements for companies that issue stock to the public
100
Going concern
Any given company plans to remain in existence for the foreseeable future
101
Objectivity
Accounting entries will be recorded on the basis of objective evidence
102
Conservatism
Accounting estimates, evaluations and opinions should neither overstate nor understate the business activities of the company
103
Conservatism
Accounting estimates, evaluations, and opinions should neither overstate nor understand the business activities of the company
104
Consistency
Similar measurement concepts and procedures for related items within financial statements are applied for entire accounting period
105
Matching
Expenses match with revenues in the same period on income statment
106
Materiality
Acknowledge significance of various decisions and their ultimate effects on the financial statements given the magnitude of a company’s operations
107
Sarbanes-oxley
Help curb financial abuses at companies that issue their stock to the public. Internal control: procedures and processes used by a company. More transparency.
108
Money measurement concept
Stipulates that all business transactions must be expressed in monetary terms
109
Cash basis accounting
Recording revenue and expenses in the period they are received or expended in cash. Not considered with GAAP-Does not appropriately reflect matching principle, very small companies
110
Accrual basis accounting
Revenue and expenses are recorded n the period in which they are earned incurred regardless of whether cash is received or disbursed - conforms with GAAP
111
current ratio formula
current assests / current liabilities
< 2 - low current assets
> 5 company is acting too conservatively
112
quick ratio
current assets - inventories - prepaid expenses / current liabilities
want between 1.1 and 2, if too low, org doesnt have enough cash on hand to pay all of current liabilities
