week 1

Question 1

principles of economics in healthcare

Answer 1

• macroeconomics
• microeconomics
• law of supply and demand

Question 2

macroeconomics

Answer 2

examines national output and the way a country allocates its resources of land, labor and capitol to maximize production levels and promote trade and growth

Question 3

microeconomics

Answer 3

examines output at the individual level (persons, companies) within the economy “the parts that make up the whole company”

shows how ind. and firms respond to changes in price and why they demand what they do at particular price levels

Question 4

supply and demand

Answer 4

supply: the quanitity of the product/service the market will offer at a certain price

demand: the quantity of a product/service desired by consumers at a given place

the price of a product/service, therefore, is a reflection of the supply and demand

Question 5

difference between:

• market-based pricing
• cost-plus pricing

Answer 5

-** market-based pricing**: prices are set by what others are charging

• cost-plus pricing: costs + profit = price

Question 6

accounting

Answer 6

“the art of recording, classifying, and summarizing in a signifcant manner and in terms of money, transactions, and events which are in part of least, of financial character, and interpreting the results thereof”

produces info about the operations of a business

reports comprised of financial declaration that demonstrate the financial position of a business

Question 7

accounting terms:

• revenue
• expenses
• receivables
• payables
• gross
• net

Answer 7

• revenue: fees earned over period of time; accrued + counting right now
• expenses:
• receivables: asset not yet received
• payables: bills not yet paid; still owed
• gross: all revenues earned but not taking out expenses
• net : all revenues - expenses

Question 8

assets =

equation and definitions

Answer 8

assets = liabilities + owners equity

assets: economic resources of the company (ex: cash/land)

liabiliites: amounts owed to others; an ‘exsisting” (ex: business loans); obligation to pay or perform some duty

equity: the owners “interest” in the business

Question 9

types of accounting statements

Answer 9

• balance sheet: a snapshot of a company’s assets, liabilities, and owners equity at one point in time
• **income statement **: shows how profitable a componay was during a states time interval
• cash flow statement: the amount of cash coming inot a business via revenue versus the amount that is leaving in the form of payments during a specific period of time

Question 10

bottom line equation:

Answer 10

profit = revenue > expenses

Question 11

equity vs debt financing

Answer 11

equity: think shark tank

debt financing: bank; any type of loan

Question 12

opportunity costs

Answer 12

the value of what is foregone in order to have something else

PT business model

Question 13

budgeting process

Answer 13

• typically completed on an anuual cycle
• involves looking at revenue v expenses and projecting for next yr
• often use historical data for projections
• why would a busine/department need one?

Question 14

paying a staff PT to meet with a new physcian in the area for marketing purposes, instead of devoting their time to treating pts is an example of

Answer 14

an opportunity cost

Question 15

importance of revenue and cost per visit

Answer 15

can provide a good metric for budgeting

revenue per visit: revenues = copays/coinsurance + insurance reimbursment
(to calculate: revenues / # of visits per yr)

cost per visit: total expenses / # of visits per yr

Question 16

give examples of each:

• start up costs
• capital expenditures
• fixed costs
• variable costs

Answer 16

-** start up costs: costs associated with starting business (high low tables, computers)
- capital expenditures: large equipment expenditures (replacing old furniture)
- fixed costs**: expenses that dont vary with pt volumes (rent, light bill)
- variable costs: fluctuate directly with business volume (theraband, massage cream)

Question 17

break even analysis

Answer 17

used to determine when your business/program will be able to cover all its expenses and begin to make profit

must first identify startup costs and determine revenue needed to pay onoing business expenses in addition

Question 18

return on investments, ROI

Answer 18

the profit generated by the money a busiess owner puts into the project/business

ROI= income or profit / original or current investment

doesnt account for time

Question 19

net operating income

Answer 19

at a basic level, this is making money after all the bills are paid(does not include start-up costs) as the business is operating

assessed monthly, anually as per the statement

timeframe must be considered for this to have power

Question 20

productivity

Answer 20

balancing the task and people

staffing too high = increased costs and decreased productivity

staffing too low = increased stress on staff, can strain referral relationships and cause decreased service standards

pt census is at the center of the equation

Question 21

comparing the revenues gained from new pts after a one time marketing even to the expense of hosting the event would be considered which measures of success

Answer 21

return on investment

Question 22

marketing

Answer 22

promoting interests in and generating demand for products/services and positioning them within the market

Question 23

sales

Answer 23

finding likely buyers and obtaining their agreement to buy a business product/service

Question 24

public relations

Answer 24

the professional maintainence of a favorable public image by a company or other organization

ex: free health screens; AT on sidelines

Question 25

costumer value triad

Answer 25

quaity service price

Question 26

what is a: needs satisfaction selling, NSS

Answer 26

2 step process: - determine what your costumer needs/wants - match how your product/service meets those needs

Question 27

market position: market differentiation: branding, brand identity:

Answer 27

**market position:**: image,identity; what you think of the company (walmart=lowest prices) **market differentiation:**: company advantage against others (disney being the happiestplace on earth, therefore, they are clean and maintain higher standards) **branding, brand identity**: logos

Question 28

marketing plan

Answer 28

- part of business plan - defines target market and competition - defines goals and objectives - provides a measurment tool - provides a roadmap to reach goals

Question 29

what are elements of marketing plan

Answer 29

- situational analysis (SWOT) - market assesment - competition analysis - objectice/goals - action plain - metrics

Question 30

difference between internal and external costumers

Answer 30

internal: rehab team; other heathcare providers; organizational depts; department employees external: pts, families, referral sources; payors; non-referral

Question 31

anti-kickback statute

Answer 31

its a criminal offense to knowingly and willfully solicit, receive, offer,or pay ant reumeration to induce referral of items or services covered by medicare or medicaid or other federally funded program

Question 32

considerations of the managers rolle in quality care

Answer 32

pt or employee safety, effective care, equitable care (value), efficient and timely care, pt centered care

Question 33

underuse: overuse: misuse:

Answer 33

**underuse:** not using EBP **overuse**: overutilization of diagnostic tests and interventions when not indicated **misuse**:failing to execute clinical care process

Question 34

for profit business

Answer 34

- Profits raised by the organization can be distributed to the owners - Do not qualify for tax exemptions - Assets belong to the owners, and if the company is dissolved, they are distributed according to ownership interest - Raise capital by selling shares of ownership in the company or investors can donate land/property/assets in exchange for ownership

Question 35

non profit business

Answer 35

- Profits raised by the organization must be recirculated back into the organization so it is able to fulfill its mission § May qualify for state and federal tax exemptions § Assets belong to the organization, and if the organization is dissolved, they are donated to another NP organization § Raise capital by soliciting personal and business donations and through grants

Question 36

feasibility studies

Answer 36

An analysis and evaluation of a proposed project to determine if it (1) is technically feasible, (2) is feasible within the estimated cost, and (3) will be profitable. Feasibility studies are almost always conducted where large sums are at stake. Also called feasibility analysis. Provides the Who? What? Where? Why? How? § Makes every effort to be objective in financial analysis § Justifies the use of resources for program o rbusiness These are a lot of work!!! Do you need it? 52.4% of small businesses fail in 5 years

Question 37

what does SWOT include

Answer 37

strengths weakness threats opportunities

Question 38

SWOT strengths

Answer 38

- advanatges the co holds - unique resources does the business possess - what does the business do better than anyone else - what do costumers see as co sttengths

Question 39

SWOT weakness

Answer 39

- where does it need improvements - what do costumers identify as weakness - where should the co consider "cutting its losses"

Question 40

SWOT opportunities

Answer 40

- Are there niches in the market that are not being met? - What are others doing that you could replicate or improve on? - What are the trends in the industry?

Question 41

SWOT threats

Answer 41

* What obstacles does the company face? * What is the competition doing? * Is reimbursement changing? * Does the company have current financial problems? * Could weaknesses identified threaten the business/program?

Question 42

grantt charts

Answer 42

* A horizontalbarchartthat provides a graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project. * Horizontalbarsofvarying lengths represent the sequences, timing, and time span for each task & may overlap * Verticallinesnotereporting dates * Whiletheygiveapictureof project status, they don't indicate task dependencies

Question 43

pert charts | program evaluation and review technique

Answer 43

* A scheduling tool commonly used in project management to illustrate the dependencies and flow of project events and milestones. * Used to plan & track projects * Also called a **Network Diagram**