Finance chapter 1 & 2

Question 1

Substitutability

Answer 1

• resources can be dedicated to many uses
• what is the value of a alternate resource?

Question 2

Heterogeneous preferences

Answer 2

• ones persons pleasure is another persons poison

Question 3

Marginal cost=

Answer 3

Change in cost for one-unit increase in quantity

Question 4

Marginal utility=

Answer 4

Change in utility for one-unit increase in quantity
(utility is sometimes called benefit)

Question 5

to increase production you might have to increase ___

Answer 5

marginal cost of production

Question 6

Demand Curve

Answer 6

• quantity demanded at alternative prices
• if price changes you move along the curve

Question 7

What causes changes in the demand curve?

Answer 7

• income (insurance reimbursement increase)
• Price of related goods (LPN/LVN wages)
• preferences (CNO preferes RN)

Question 8

What does the demand curve measure?

Answer 8

marginal benefit- which is what you would be willing to pay for something

Question 9

what is the supply curve?

Answer 9

• quantity supplied at alternative prices
• if prices change you move along the curve
• measures marginal curve for workers

Question 10

What cause a shift in the supply curve?

Answer 10

• size of workforce
• input prices

Question 11

What does the affordable care act do?

Answer 11

• quality and value improvement
• center for medicare and medicaid innovation
  - integrated health systems (accountable care organizations)
• value based purchasing program
• bundled payment program for medicare
• review of insurance plan rate increases
• independent payment advisory board aimed to extend life of medicare trust fund
• 85% of insurance premiums must be used for care

Question 12

what is included in the federal regulatory cost containment

Answer 12

• Value based purchasing (accelerated by ACA)
• Accountable care organizations
• Medicare accès and CHIP reauthorizaiton act (MACRA)

Question 13

how does the value based purchasing effect federal regulatory cost containment?

Answer 13

establishment of center for medicare and medicaid innovation

Question 14

how does accountable care organization effect federal regulatory cost containment?

Answer 14

organizations of healthcare provider that are accountable for the quality, cost, and overall care of patients

Question 15

how does medicare access and chip reauthorization act (MACRA) effect federal regulatory cost containment?

Answer 15

changed how medicare pays providers and created two payment tracks within the quality payment program

Question 16

State regulation

Answer 16

• more extensive than federal regulation due to licensing of individual providers (MD, RN, etc) and certified the need laws require permission fro the state to add services
• state tort liability
  - medical malpractice lawsuits indirectly regulate healthcare

Question 17

What has led to the biggest changes in health care reimbursement since 1960s with the introduction of medicare and medicaid

Answer 17

Affordable care act

Question 18

Health insurance

Answer 18

• prepayment for health services

Question 19

what are the main sources for health insurance

Answer 19

• federal (medicare, medicaid, TRICARE (military) and veterans affairs (VA)
• state (medicaid)
• commercial insurers
• self-insurance

Question 20

Reimbursement

Answer 20

• how entities get paid for providing a health service
• service is often paid by a third party for health services received

Question 21

Domain 7: based practice

Answer 21

• pertains to organizational and systems leadership for quality improvement
• knowledge of business and finance principles including those related to health insurance and reimbursement are critical for DNP especially working in managerial and leadership roles.
• knowledge of payers, documentation, billing and coding processes and the prospective payment systems (PPS) complement the clinical and scientific knowledge base the DNP has developed

Question 22

what is a health insurance policy?

Answer 22

agreement between a person (payer) and an insurance company that providers certain medial benefits per the policy

Question 23

who is the individual?

Answer 23

(and or employer as often is the case) pays a premium

Question 24

what is the role of the insurance company?

Answer 24

agrees to provide certain services typically with co-pays and deductibles

Question 25

why does healthcare occur in a imperfect market?

Answer 25

- uncertainty - asymmetry of information (providers and patients have different levels of information) - non marketability of risks inherent in medial practice

Question 26

About what percentage of Americans are uninsured?

Answer 26

10.9%

Question 27

What are the three groups of the uninsured?

Answer 27

- foreign (born residents who are not US citizens) - young adults (19-25) - low-income families with an annual household income of less than 25,000

Question 28

what is the especially vulnerable group of uninsured citizens?

Answer 28

children under 18 (CHIP- medicaid program for children/youth)

Question 29

Medicare

Answer 29

- coverage for individual 65+ - also those with disabilities or ESRD - often the largest payer source for hospitals

Question 30

Medicare (hospital insurance) Part A

Answer 30

- hospital care - limited care in a skilled nursing facility (SNF) - funds mostly from social security taxes

Question 31

Supplementary medical insurance (Part B)

Answer 31

- physician and certain other health care professional services - hospital outpatient care and certain other services - funded form general revenues and enrollee premium payments

Question 32

Medicare + Choice (part C)

Answer 32

- services funded b a managed care organization

Question 33

Medicare prescription drug coverage (pard D)

Answer 33

- funded primarily though individual premiums

Question 34

Facts about Health care reimbursement

Answer 34

- 18% of gross domestic product - majority of spending - 31% for hospitals - 20% for physicians - 10 % for prescription drugs - 75% provides care for individuals with chronic conditions

Question 35

what are the five basic types of payments to providers

Answer 35

- cost/cost plus - fee for service - fixed price - capitation - value

Question 36

diagnosis related group (DRG) based reimbursement

Answer 36

- prospective payment system (PPS) operated based on DRGs - recent history this has been the most prominent payment model in health care

Question 37

what are the three value based reimbursement options?

Answer 37

- hospital value based purchasing (HVBP) program for reimbursement - hospital readmissions reduction program - hospital acquired conditions program

Question 38

what are some other value based payment models ? (7)

Answer 38

- bundled payment - accountable care organizations - shared savings - shared risk - provider sponsored health plans (PSHPs) - alternative payment model - merit-based incentive program

Question 39

Health insurance and reimbursement in non acute settings?

Answer 39

- long term care (skilled nursing, intermediate care and subacute services. assisted living) - community service agencies - dialysis - rehab - physician offices (primary care, specialty care, owned/managed care. self operated care) - home health - behavioral health - hospice care - social service agencies (adult day care) - dental, optometry - schools - correctional facilities

Question 40

APRN reimbursement

Answer 40

- depends on if the APRN is allowed by applicable state and federal regulations practice and bill independently and is able to obtain direct reimbursement for those independently delivered services

Question 41

DNP roles related to reimbursement

Answer 41

- safe - timely - effective - efficient - equitable - patient centered

Question 42

DNP role related to reimbursement and cost reduction

Answer 42

- reduce variation - remove unnecessary care - use lowest cost settling possible - reduce overall need for hospital services

Question 43

In 2011, a surplus of registered nurses was reported in many parts of California (Bates et al., 2011). Identify possible explana tions of the emergence of a surplus. What might have changed in the labor market? How can you depict this in a chart? What changes would switch the labor market to reflect a nursing shortage in the future?

Question 44

Medicare rules pay NPs 85% of the fee paid to physicians for ambulatory care. NP professional organizations are lobbying for equal reimbursement. What implications would that have? How might such a change affect the quality of care? Access? Costs?

Question 45

A growing share of health insurance plans have high deductibles, so that an individual must spend up to $6,450 before insurance begins to pay for services. What problem(s) are these insurance plans trying to solve? Answer this question using economic terminology related to health insurance. For what reasons might these plans be successful? In what ways might these plans backfire?

Question 46

The fundamental problem of health policy is presented in Figure 1.13. Countries that have single-payer or other universal health insurance systems, such as Canada and Germany, face this problem, as does the United States. How might health policy try to address the fundamental problem in the context of universal health insurance? Identify specific programs or strategies that might be used, and consider their potential benefits and drawbacks.

Question 47

List three ways the DNP provides leadership in helping a healthcare entity optimize reimbursement from insurers.

Question 48

Choose two preferred financial and patient care outcomes from the following list and describe two ways to achieve each of them: a. Reduce overall hospital admissions. b. Reduce average length of stay. c. Reduce avoidable hospital readmissions. d. Reduce high-tech imaging services. e. Reduce amount CMS pays per beneficiary.

Question 49

Discuss three of the CMS's major value-based programs. Define the programs and the criteria that are needed for each of these programs to be successful.

Question 50

Can the kind of care proposed in an IDS be provided in a system that has a primary focus on either provider or corporate incomes and profit accumulation?

Question 51

Why is it financially important for hospitals to institute effective discharge- planning programs?

Question 52

Partnerships between acute care and community-based settings improve continuity of care. How do these partnerships influence reimbursement for health systems?