four most common budgeting methods
- incremental
- zero based
- flexible
- performance
zero-based budgeting
- must rejustify their needs every budgeting cycle
- start at 0 each year
- no expense would be assumed to be absolutely necessary
key components of decision packages in zero-based budgeting
- listing of all current and proposed objectives or activities in the dept
- alternate plans for carrying out these activities
- costs for each alternate
- adv and disdain of continuing or discontinuing an activity
flexible budget
- automatically calculates what the expenses should be, given the volume
- works well in most healthcare organizations
- goes up and down depending of the volume
performance budget
- emphasizes outcomes and results instead of activities or outputs
- mgr would budget as needed to achieve a specific outcome and would evaluate the budgetary success
clinical pathway
- predetermined courses of pt progress after admission for a specific dx or surgery
- standardized predictions of pt progress
- standardizes care according to evidenced based practice
advantages of clinical pathway
- leads to improved pt outcomes
- provides some means of standardizing care
disadvantages of clinical pathway
difficulties accounting for and accepting what are often justifiable differentiations between unique puts who have deviated
fee for service (FFS)
- type of reimbursement
- based on costs incurred to provide the service plus profit
- no ceiling placed on the total ant that could be charged
Medicare
- for 65+
- those with catastrophic or chronic illness
Medicaid
low income children and adults
Medicare part A
hospital insurance
Medicare part B
outpatient care
Medicare part C
- medicare advantage
- allows more choices for participating in managed care plans
Medicare part D
prescription drugs
DRGs
predetermined payment schedules that reflected historical costs for tx of specific pt conditions
why do hospitals use the ICD
to comply with HIPPA
outlier
the extra cost of providing care for the pt can be justified
responsibility of the nurse leader
- to recognize when cost containment is impinging on pt safety and to take appropriate action
- to guarantee at least a minimum standard of care
Balanced Budget Act (BBA)
-contains numerous cost containment measures
two ways the BBA provided savings
- limiting the growth rates for hospital and physician payments
- restructuring the payment methods for rehab hospitals, HHA, SNF, and outpt services
managed care
- a system that attempts to integrate efficiency of care, access and cost of care
- PCPs are “gate keepers” with a focus on prevention
utilization review
process used by insurance companies/hospitals
- to assess the need for medicare care
- to assure that payment will be provided for the care
capitation
- when providers receive a fixed monthly payment regardless of services used by the pt during the month
- cost of care is less than the amt = provider profits
