Chapter 12: Managing Costs and Budgets

Chapter 12: Managing Costs and Budgets

 

Complete Chapter Questions With Answers

 

Sample Questions Are Posted Below

 

MULTIPLE CHOICE

 

1. The chief nursing office of a Magnet™ hospital has conducted a study of ways to improve healthcare services. Healthcare services that add value for clients:

a.	Accomplish healthcare goals.
b.	Minimize costs.
c.	Decrease the number of services used.
d.	Use high-technology treatments.

 

ANS:   B

Models of reimbursement affect which services and approaches (e.g., decreasing the number of services used) might be financially viable and add value for clients. Nurses need to become aware of business models in healthcare organizations and of fundamental concepts of economics; this leads to a general guideline of minimizing costs regardless of the model of reimbursement in use.

 

REF:    Page 234         TOP:    AONE competency: Business Skills and Principles

 

2. The difference between a nurse practitioner’s charge of $45 for an office visit and the insurance company’s payment of $34 is:

a.	A contractual allowance.
b.	A profit.
c.	A flat rate.
d.	Revenue.

 

ANS:   A

Because the amount that is allowed for an office visit is less than the amount that the NP charges, this is known as a contractual allowance or discount. If the amount allowed was more than what the NP charges, then a profit would be realized. All of the answers represent sources of revenue.

 

REF:    Pages 232, 233

TOP:    AONE competency: Business Skills and Principles

 

3. The chief nursing office continues to seek ways to improve healthcare services to clients and to save the hospital money. However, with the federal guidelines of paying agencies based on capitation, the chief nursing office faces a challenge. Capitation provides incentives for healthcare providers to control costs by:

a.	Providing fewer services to fewer clients.
b.	Using fewer services per client.
c.	Using high-technology treatments.
d.	Requiring second opinions.

 

ANS:   B

In a capitated environment, a single fee is paid for all services provided. To be financially viable under this reimbursement model, organizations would be interested in decreasing the volume of services used and increasing the volume of patients. High-technology treatments and second opinions may increase the number of services used.

 

REF:    Page 233

TOP:    AONE competency: Knowledge of the Healthcare Environment

 

4. In a nurse managers’ meeting, the chief nursing officer encourages the managers to brainstorm ways to reduce costs. Nurse managers have the greatest impact on reducing costs by managing:

a.	Supplies.
b.	Staffing.
c.	Fixed costs.
d.	Medication costs.

 

ANS:   B

Because staffing constitutes the largest portion of any healthcare budget, managing the mix and numbers of staff required for patient care to meet identified outcomes will have the largest impact on budgets.

 

REF:    Pages 237, 238

TOP:    AONE competency: Business Skills and Principles

 

5. The chief nursing officer works with her nurse managers by helping them understand how to develop and implement a budget. A nurse manager can best describe a budget as a:

a.	Day-to-day plan for operations.
b.	Unit of service.
c.	Statement of revenues and services.
d.	Financial plan.

 

ANS:   D

The budget is an overall financial plan that reflects organizational assumptions, objectives, and standards, and various types of budget planning, including operational and capital budgets, which, in turn, reflect revenues and costs.

 

REF:    Page 239         TOP:    AONE competency: Business Skills and Principles