4 major payment methods in Healthcare

1. Charges: Cost of providing service plus markup for profit

• Third party payers put limiations on what they will pay by establishing usual and customary charges
• “Usual and customary” is a term that means third-party payers have surveyed providers in the area to establish what the payer will pay.
• So, a hospital could tack on a markup and not necessarily receive it because it far exceeds the “usual and customary” charge.

2. Cost-based (retrospective): All allowable costs

• calculates all allowable costs and then uses that as the basis for payment. Each payer determines what the allowable costs are. Both of these approaches have been largely replaced by payer fee schedules

3. Flat-rate (prospective): Rate decided in advance

• based on the payer deciding in advance what the payment will be. If costs are greater, the provider absorbs the costs. If costs are less, the provider benefits.

4. Capitated: Rate based on designated services over disegnated time

• Providers paid a per person per year (or month) fee
• If services are more cost than the payment, the provider absorbs the loss. If services cost less than the payment, provider makes a profit.

a health plan that brings together the delivery and financing function into one entity

• Goal is to decrease unecessary services, thereby decreasing costs
• Capitation is the mode of payment characteristic of health maintenance organizations (HMO's) and other managed care systems
• Physician determines the services that the patient uses

• operating budget
• Capital Expenditure Budget
• Cash Budget

• Budgeting is done annually and in relation to the organization's fiscal year
• Major steps in the budgeting process include gathering info and planning, developing unit budgets, developing the cash budget, negotiating and revising, and using feedback to control budget results and improve future plans

• An operating budget is a combination of known expenses, expected future costs, and forecasted income over the course of a year.

• Operating budgets are completed in advance of the accounting period, which is why they require estimated expenses and revenues.

• Operating budgets are focused on facilitating income.

• The first and perhaps most crucial component of the operating budget is the sales and collections budget.

• This is followed by the projected cost of goods sold budget, the inventory and purchasing budget, and the budget for operating expenses

• The capital expenditures budget identifies the amount of cash a company will invest in projects and long‐term assets (eqipment and physical plants)

• Although funds for expenditures may be identified and approved in total during the budget process, most companies have a separate process for approving funds for the specific items included in a capital expenditures budget.

• The process includes a financial evaluation to determine whether the company's return on investment targets are met and, once the targets are known to be met, a qualitative review by a top management team.

• Many companies include long‐term assets, such as joint ventures, purchases of other companies, and purchases or leases of fixed assets, as well as new products, new markets, research and development, significant marketing programs, and information technology items in their capital expenditures budgets.
• Capital expenses kept separate from operating budget

• One of the major functions of corporate finance is to anticipate the need for funds in the company.

• Cash flows through a company like water flows through a pipe.  A cash budget essentially maps out these cash flows and indicates the period in which they will occur. 

• Cash budgeting, at its core, is a very simple procedure that simulates cash flowing through a company.  If we can accurate estimate (1) the amounts and (2) the timing of these cash flows, then we can also estimate whether the company will experience a shortage of cash (or an excess of cash) during any given month.

• The primary cash inflows for a company consist of (1) cash sales and (2) collection of accounts receivable.  An accurate sales forecast is a necessity if we are to construct an accurate cash budget.  If we then know the terms that we sell on (2/10, net 30, for example) and the past payment experience of our customers, we can estimate the amount and timing of these collections.

• The primary cash outflows are generally (1) payments on purchases, (2) labor costs, and (3) capital purchases (i.e., fixed assets).  Other large payments may include rent, taxes, and These and other cash outflows must be estimated as to the amount and timing of the payments.

1. Gathering Information and Planning: Provides nurse managers with data essential for devleoping their individual budgets; environmental assessment

2. Developing Unit Budgets: operating budgets and capital budgets

3. Developing the Cash Budget

4. Negotiating and Revising: complex process because changes in one budget usually require changes in others

5. Using Feedback to control budget results and improve future plans; variance analysis is the major control process used (measures the difference between a projected budget and the actual performance for a particular account)

• Magnet hospitals are hospitals that have the ability to attract and retain professional nurses
• Magnet Reconition program is designed for hospitals to achieve recognition of excellent nursing care through a self-nominating, self-appraisal process to achieve.
• petitioning organization must assess its ability to meet the program standards and typically works for 2 years or more in the development of the application
• When application process is successful, Magnet status is awarded for 4 years

• Remember the steps in the budgeting process
• Cash budget is developed after unit and department operating and capital budgets

• nurse managers are responsible for meeting the fiscal goals related to the personnel and the supply and expense part of the operations budget
• Monthly reports of operations are sent to nurse managers who investigate and explain the underlying cause of variances greater than 5%
• The nurse manager then takes steps to prevent the variances from occurring in the future
• Managers monitor the productivity of units (the ratio of outputs to inputs)

• Total healthcare costs are a function of the prices and utilization rates of healthcare services (Cost=price x utilization)
• Price is the rate that healthcare providers set for the services they deliver, such as the hospital rate or physician fee
• Utilization refers to the quanityt or volume ofservices provided, such as diagnostic tests provided or number of patient visits
• Price inflation and administrative inefficiency are leading contributors to increasing prices for health services.
  
• Examples of factors that stimulate price inflation are physician incomes that rise faster than average worker earnings and the high price of prescription drugs
• Administrative inefficiency or waste is primarily a result of the large number of clerical personell whom organizations use to porcess reimbursement forms from multiple payers
• Increased utilization: unnecessary care, consumer attitudes, healthcare financing, pharmaceutical usage, and changing population demographics and disease patterns
• Inappropriate or inefective medical procedures
• Chronic health problems increase with age and the number of older adults in America is rising
  

• Data Gatherer
• Information user
• Knowledge User
• Knowledge builder

• Nursing Minimu Data Set (NMDS)
• Nursing Management Minimum Data Sets (NMMDS)
• Nursing Database of nursing quality indicators (NDNQI)

• Establish comparability of nursing data across clinical populations, settings, geographic areas and time

• Describe nursing care of individuals, families and communities in a variety of settings

• Demonstrate or project trends regarding nursing care provided and allocation of nursing resources to patients or clients according tot heir health problems or nursing diagnoses

• Stimulate nursing research

• Provide data and information about nursing care to influence practice, administrative and health policy decision making

• essential data elements to be collected on all patients
• Four elements unique to nursing: nursing dagnosis, nursing intervention, nursing outcome, and intensity of nursing care
• We lack unified structured nursing terminology which makes it difficult to collect some NMDS elements such as interventions and outcomes
• Nursing terminology leaders recognize the importance to computerize nursing terminologies and make them interoperable with one another
  

• Nursing Care elements:nursing diagnosis, intervention, outcome and intensity of nursing care
• patient or client demographic elements: personal identification, sex, date of birth, race or ethnicity, or residence
• Service elements: expected payer, hospital identification number, admission date, discharge date, disposition of the client, unique facility number

-expand nursing knowledge in factors that influence quality of patient care

-national comparison of nursing care to patient outcomes

-managed by the University of Kansas Medical Center School of Nursing

-Indicators include:

Nursing Hours per patient day
Patient falls
Patient falls with injury
Pediatric pain assessment
Pediatric peripheral intravenous infiltration rate
Pressure ulcer prevalence
Psychiatric physical/sexual assault rate
Restraint prevalence
RN education/certification

North American Nursing Diagnosis Association (NANDA)
Nursing Intervention Classification (NIC)
Nursing Outcome Classification (NOC)
Clinical Care Classification (CCC) [formerly Home Health Care Classification (HHCC)]
Omaha System
Patient Care Data Set (PCDS)
PeriOperative Nursing Data Set (PNDS)
ABC Codes

    A variable patient, community, or family caregiver state, condition, or perception that is responsive to intervention.

• label, definition, indicators and measurement scale
• Measurement:  A five-point Likert type scale that quantifies a patient outcome or indicator status on a continuum from least to most desirable and provides a rating at a point in time.
  1 = Least Desirable State
  5 = Most Desirable State

-Care Planning
-Competency Based Orientation
-Manual Documentation System
-Clinical Guidelines Manual

• Systemized Nomenclature of Medicine Reference Terminology (SNOMED CT)

• Health Level -7 (HL-7)

• Unified Medical Language System (UMLS)

• International Classification for Nursing Practice (ICNP)

Nursing Informatics

the application of computer technology to all fields of nursing-nursing services, nurse education, and nursing research

-the clinical computer system, computer application, or process that helps health professionals make clinical decisions to enhance patient care

-one of the most common forms of CDS includes drug-dosing calculators-computer based programs that calculate appropriate doses of meds after a clinician inputs key data

-especially useful in managing the administration of meds with a narrow therapeutic index

-other examples: allergy alerts, dose range checking, drug-drug interaction, and duplicate order checking

• interactive computer programs designed to assist health professionals with decision-making tasks by mimicking the inductive or deductive reasoning of a human expert
• components include both a knowledge base and an inferencing mechanism

Electronic Health Record (EHR)

Electronic Medical Record (EMR)

• refers to an individual patient's medical record in digital format

• provide access to patient information and provide clinical decision support to help reduce errors
• generates alerts, reminders or suggestions
• Reminders to perform required care
• EBP integrated so that providers can select the most appropriate course of action
• eliminates the problem of illegible handwriting

• the use of modern telecommunications and information technologies for the providsion of health care to individuals at a distance and the transmission of information to provide that care
• Accomplished using a two-way interactive videoconferencing and high speed telephone lines, fiberoptic cable, and satellite transmissions
• patients in rural areas and prisons especially benefit from this
• the use of the internet (make sure it's good quality)
• electronic email

• refers to the philosphy that defines a healthcare culture emphasizine customer satisfaction, innovation, and employee involvement

• Refers to an ongoing process of innovation, prevention of error, and staff development that is used by institutions that adopt the quality management philosophy

1. Involvement: Leaders, managers and followers must be committed to QI

2. Improve the system, not assign blame.-Nurse managers must clearly articulate the organization's mission and goals. Communication.

3. Customers: Successful organizations must focus their energies on enhancing quality of customer satisfaction; involves customer input

4. Focus: QI focuses on outcomes. Patient outcomes are statements that describe the results of health care.

5. Decisions: based on data; the use of statistical tools. Quality information must be gathered and analyzed without bias bfore improvement suggestions are made.

• Continual analysis and evaluation of products and services to prevent errors and achieve customer satisfaction

• a systematic approach to clinical decision making to provide the most consistent and best possible care to patients
• integrates current research findings that define best practices, clincal expertise, and patient values to optimize patient outcomes as well as their quality of life
• Based on 5 key essential elements: 1. Ask a clinical question. 2. Acquire the evidence. 3. Appraise the evidence. 4. Apply the evidence. 6. Assess the outcomes-informatics plays an important role

Patient Teaching-web based

• Telecommunication supports distance learning
• Online or virtual classrooms
• internet fosters communication, collaboration, resource sharing and information access.

• involves the use of equipment in the clinical setting
• Used for:

-physiologic monitoring

-diagnostic testing

-intravenous fluid and medication dispensing and administration

-therapeutic treatments