Financial Management for Nurse Managers and Executives

ISBN-10: 1416033424

ISBN-13: 9781416033424

Edition: 3rd 2007 (Revised)

List price: $87.95
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Description: This resource examines the broad scope of financial management issues of interest to nurse managers, nurse executives and nurse entrepreneurs. It includes managed care and home health care as well as performance budgeting.

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Book details

List price: $87.95
Edition: 3rd
Copyright year: 2007
Publisher: Elsevier - Health Sciences Division
Publication date: 4/4/2007
Binding: Paperback
Pages: 544
Size: 7.25" wide x 10.25" long x 0.75" tall
Weight: 2.222
Language: English

A Financial Management Framework
Introduction and Overview
Chapter Goals
Introduction
A Financial Management Framework
The Health Care Environment
Financial Management and Nursing Leadership in the Health Care Organization
Key Issues in Applied Economics
Quality, Costs, and Financing
Financial Accounting
Accounting Principles
Financial Statement Analysis
Cost Analysis
Cost Management
Determining Health Care Costs and Prices
Recruiting and Retaining Staff
Planning and Control
Strategic Management
Budgeting Concepts and Budget Preparation
Controlling Operating Results and Variance Analysis
Benchmarking, Productivity, and Analysis of Costs
Managing Financial Resources
Short-Term Financial Resources
Long-Term Financial Resources
Additional Management Tools
Management Information Systems and Computers
Forecasting and Other Decision-Making Methods
Marketing
The Nurse as Entrepreneur
Nursing and Financial Management: Current Issues and Future Directions
The Health Care Environment
Chapter Goals
Introduction
The Key Participants in the Health Care System
Providers
Nurses
Physicians
Hospitals
Government
Other Providers
Suppliers
Consumers
Regulators
Payers
Individual Consumers
Insurers
Employers
Government
Financing the Health Care System
The Medicare and Medicaid Programs
The Insurance System
Moral Hazard
Coinsurance, Deductibles, and Co-Payments
Customary and Reasonable Charges
Other Sources of Financing
Alternative Payment Approaches
Paying Health Care Providers
Hospital Payment
Cost-Based Reimbursement
Charity Care
Prospective Payment Systems
Negotiated Rates
Pay-for-Performance
Nurse Payment
Physician Payment
Home Health Agency Payment
Nursing Home Payment
Methods Use to Control Payments for Care
Managed Care
Health Maintenance Organizations
Preferred Provider Organizations
Point of Service
Implications for Nurse Managers
Key Concepts
Suggested Readings
The Role of Financial Management and Nurse Leadership in Health Care Organizations
Chapter Goals
Introduction
The Role of Management
The Hierarchy of Health Care Organizations
The Top Management Team
Line vs. Staff Authority
Formal Lines of Authority
Informal Lines of Authority
Centralized vs. Decentralized Organizations
The Role of the CFO and Other Financial Managers
The Finance Function
The Financial Accounting Function
The Managerial Accounting Function
Internal Control Function
The Role of the CNE in Financial Management
The Role of Mid- and First-Level Nurse Managers in Financial Management
Transition from Staff Nurse to Nurse Manager
The Role of Staff Nurses in Financial Management
Interactions Between Fiscal and Nurse Managers
Responsibility Accounting
Responsibility Centers
Incentives and Motivation
Power and Politics
Networking
Implications for Nurse Managers
Key Concepts
Suggesting Readings
Key Issues in Applied Economics
Chapter Goals
Introduction
Fundamental Concepts of Economics
Economic Goods
Utility
Marginal Utility
Marginal Cost
Savings
Supply and Demand
Free Enterprise
An Example of Supply and Demand
Elasticity of Demand
Economies of Scale
Increasing Returns to Scale
Decreasing Returns to Scale
Economics and Incentives
Market Efficiency
Redistribution of Resources
Collective Action
Equity Improvement
Market Failure
Government Intervention
Lack of Full Information
Lack of Direct Patient Payment
Monopoly Power
Monopsony Power
Government-Induced Inefficiency
Externalities
The Market for Nurses
Implications for Nurse Managers
Key Concepts
Suggesting Readings
Quality, Costs, and Financing
Chapter Goals
Introduction
What Is Quality and How Is it Measured?
The Impetus for Integrating Quality, Cost, and Financing
Quality Reporting
Balanced Scorecards
The Magnet Movement
The Baldridge Award
Relationships Among Health Care Quality, Costs, and Financing
A Business Case for Quality
Implications for Nurse Managers
Key Concepts
Suggested Readings
Financial Accounting
Accounting Principles
Chapter Goals
Introduction
The Basic Framework of Accounting
The Key Financial Statements
The Statement of Financial Position
The Operating Statement
Accounting Terminology
Assets
Liabilities and Owners' Equity
Revenues and Expenses
The Recording and Reporting Process
Journal Entries
Ledgers
Reporting Information
Generally Accepted Accounting Principles
The Entity Concept
Going Concern
The Matching Principle and Cash vs. Accrual Accounting
The Cost Principle
Objective Evidence
Materiality
Consistency
Full Disclosure
Fund Accounting
Implications for Nurse Managers
Key Concepts
Suggested Readings
Analysis of Financial Statement Information
Chapter Goals
Introduction
The Audit
Balance Sheets and Operating Statements
The Statement of Cash Flows
Statement of Changes in Net Assets or Equity
Notes to Financial Statements
Ratio Analysis
Common Size Ratios
Liquidity Ratios
Solvency Ratios
Efficiency Ratios
Profitability Ratios
Management Reports
Implications for Nurse Managers
Key Concepts
Suggested Readings
Additional Sample Financial Statements
Cost Analysis
Cost Management
Chapter Goals
Introduction
Basic Cost Concepts
Definitions
Fixed vs. Variable Costs
Cost Graphs and the Relevant Range
The Impact of Volume on Cost per Patient
Marginal Cost Analysis
Relevant Cost Case Study
Cost Estimation Techniques
Adjusting Costs for Inflation
High-Low Cost Estimation
Regression Analysis
Mixed Costs and Regression Analysis
Multiple Regression Analysis
Break-Even Analysis
Example of Break-Even Analysis
Using Break-Even Analysis for Decision-Making
Break-Even and Capitation
Break-Even Analysis Cautions
Implications for Nurse Managers
Key Concepts
Suggested Readings
Determining Health Care Costs and Prices
Chapter Goals
Introduction
Costs for Reporting vs. Costs for Management Control
Traditional Cost-Finding Methods
The Medicare Step-Down Approach
A Detailed Look at the Cost-Finding Approach
Accumulate Direct Costs for Each Cost Center
Determine Bases for Allocation
Allocate from Cost Centers to Revenue Centers
Allocate Costs to Units of Service
Is Good-Enough Cost Finding Good Enough?
Costing Out Nursing Services
Solutions to the Costing Problem
Why Change the Costing Approach?
Should Costing Be Linked to DRGs?
Specific Approach to Costing Nursing Services
Limitations of the RVU Approach
Patient Classification vs. Other Work-Load Measurement
Indirect Nursing Costs
Staffing Mix
Product-Line Costing
Direct Care Hours
Standard Costs
Activity-Based Costing
Setting Prices
Total Financial Requirements
Rate-Setting Approaches
Cost-Based Prices
Negotiated Prices
Market Prices
Financial Reimbursement for Nursing Services
Pay-for-Performance (P4P)
Implications for Nurse Managers
Key Concepts
Suggested Readings
Costs and Other Issues Related to Recruiting and Retaining Staff
Chapter Goals
Introduction
Retaining Staff
Nurse Satisfaction
Fringe Benefits
Retention Programs
Clinical Ladders
Determining the Cost
Recruiting Staff
Marketing
Recruiting and Retaining "Older" Nurses
Use of Alternative Health Care Employees
Agency Nurses
Foreign Nurse Recruitment
Alternative Care Givers
The Use of Computers
The Nursing Shortage
Implications for Nurse Managers
Key Concepts
Suggested Readings
Planning and Control
Strategic Management
Chapter Goals
Introduction
Quality Management
Strategic Planning
The Elements of a Strategic Plan
The Mission Statement or Philosophy
Statement of Long-Term Goals
Statement of Competitive Strategy
Statement of Organizational Policies
Statement of Needed Resources
Statement of Key Assumptions
Benefits of the Strategic Planning Process
Implementing a Strategic Management Process
Long-Range Planning
Program Budgeting and Zero-Base Budgeting
Zero-Base Budgeting
ZBB Case Study: Hemodialysis
Ranking Decision Packages
Business Plans
What Is a Business Plan?
Implications for Nurse Managers
Key Concepts
Suggested Readings
Budgeting Concepts
Chapter Goals
Introduction
Types of Budgets
Operating Budget
Long-Range Budgets
Program Budgets
Capital Budgets
Generation of Capital Budget Proposals
Justification of Capital Requests
Evaluation of Capital Budget Proposals
Product-Line Budgets
Cash Budgets
Cash Budget Preparation
Cash Budget Example
Special Purpose Budgets
The Budget Process
Budget Timetable
Statement of Environmental Position
General Goals, Objectives, and Policies
Organization-Wide Assumptions
Specification of Program Priorities
Specific, Measurable Operating Objectives
Budget Preparation
Budget Negotiation and Revision
Control and Feedback
Implications for Nurse Managers
Key Concepts
Suggested Readings
Time Value of Money
Operating Budgets
Chapter Goals
Introduction
Workload Budget
Activity Report
Adjusting Units of Service
Calculating Workload
Expense Budget: Personnel Services
Average Daily Census and Occupancy Rate
Staffing Requirements and Full-Time Equivalents
Productive vs. Non-Productive Hours
Assignment of Staff by Type and Shift
Fixed Staff
Converting Staff and FTEs to Positions
Calculating FTEs by Type and Shift
Establishing Positions
Calculating Labor Cost
Straight-Time and Overtime Salaries
Differentials and Premiums
Fringe Benefits
Special Situations
Expense Budget: Other-than-Personnel Services
Budget Submission, Negotiation, and Approval
Implementing the Approved Budget
Implications for Nurse Mangers
Key Concepts
Suggested Readings
Revenue Budgeting
Chapter Goals
Introduction
The Revenue Budget
Why Aren't All Nursing Units Revenue Centers?
Why Are Nurse Managers Responsible for a Revenue Budget?
The Elements of a Revenue Budget
Prices or Rates
Volume Estimates
Environmental Scan
Revenues from Managed Care
Capitation vs. Fee-for-Service
Money Flows Under Capitation
Developing Capitated Rates
Setting a Capitation Rate: An Example
Incentive Risk Pools
Implications for Nurse Managers
Key Concepts
Suggested Readings
Performance Budgeting
Chapter Goals
Introduction
When Is Performance Budgeting Appropriate?
The Performance Budgeting Technique
Determining Key Performance Areas
Technical Steps in Performance Budgeting
Performance Budget Example
Developing Performance Area Measures
Quality of Care
Staffing
Cost Control
Increased Productivity
Patient and Staff Satisfaction
Innovation and Planning
Direct Care
Indirect Care
Other
Multiple Measures
Implications for Nurse Managers
Key Concepts
Suggesting Readings
Controlling Operating Results
Chapter Goals
Introduction
The Budget as a Tool for Motivation
Motivation and Incentives
Motivation and Unrealistic Expectations
Communication and Control
Using Budgets for Interim Evaluation
Variance Analysis
Traditional Variance Analysis
Unit and Department Variances
Line-Item Variances
Understanding Variances
Flexible or Variable Budgets
Flexible Budget Variance Analysis
The Volume Variance
The Price, or Rate, Variance
The Quantity, or Use, Variance
Determination of the Causes of Variances
The Mechanics of Flexible Budget Variance Analysis
Flexible Budget Notation
An Example of Volume, Price, and Quantity Variances
Revenue Variances
Implications for Nurse Managers
Key Concepts
Suggested Readings
Variance Analysis: Examples, Extensions, and Caveats
Chapter Goals
Introduction
Aggregation Problems
Exception Reporting
Interpretation of Variances
Rigid Staffing Patterns
Flexible Budgeting and Acuity
Fixed vs. Variable Costs
Causes of Variances
Investigation and Control of Variances
Performance Budgets and Variance Analysis
Implications for Nurse Managers
Key Concepts
Suggesting Readings
Benchmarking, Productivity, and Cost-Benefit and Cost-Effectiveness Analysis
Chapter Goals
Introduction
Benchmarking
Benefits of Benchmarking
Benchmarking Approaches
The Benchmarking Process
Requirements for Successful Benchmarking
Productivity
Productivity Standards
Unit-Costing
Unit-Costing and Productivity Standards
Productivity Improvement
Cost-Benefit and Cost-Effectiveness Analysis
Cost-Benefit Analysis
Determine Project Goals
Estimate Project Benefits
Estimate Project Costs
Discount Cost and Benefit Flows
Complete the Decision Analysis
Cost-Effectiveness Analysis
Implications for Nurse Managers
Key Concepts
Suggesting Readings
Managing Financial Resources
Short-Term Financial Resources
Chapter Goals
Introduction
Current Assets
Cash and Marketable Securities
Short-Term Cash Investment
Cash Flow vs. Revenue and Expense
Cash Budgets
Maintaining Security over Cash
Accounts Receivable
Preadmission Data Collection
Credit Policies
Ongoing Data Collection
Discharge Review and Billing
Aging of Receivables
Cash Receipt and Lock Boxes
Inventory
Perpetual Inventory
Economic Order Quantity
Current Liabilities
Accounts Payable
Payroll Payable
Short-Term Debt
Taxes Payable
Other Payables Made on Behalf of Employees
Implications for Nurse Managers
Key Concepts
Suggested Readings
Long-Term Financial Resources
Chapter Goals
Introduction
Equity Sources of Financing
Philanthropy
Corporate Stock Issuance
Government Grants
Retained Earnings
Debt Sources of Financing
Mortgages and Long-Term Notes
Leases
Bonds
Taxable vs. Tax-Free Bonds
Bond Ratings and Insurance
Zero-Coupon Bonds
Debt Refinancing
Feasibility Studies
The Future of Health Care Financing
Implications for Nurse Managers
Key Concepts
Suggested Readings
Additional Management Tools
The Use of Computers in Financial Management
Chapter Goals
Introduction
Computer Hardware and Software
Uses of Computers
General Information Management
Clinical Care
Financial Management
Financial Management Information
Special Purpose Software
Forecasting
Costing
Personnel Management
Budgeting
Acuity Systems
Performance Evaluation
The Future
Implications for Nurse Managers
Key Concepts
Suggested Readings
Forecasting and Other Methods for Decision Making
Chapter Goals
Introduction
Probability Theory: Foundation for Forecasting and Decision Making
Quantitative Methods for Forecasting
Data Collection
Appropriate Data Time Periods
What Data Should Be Collected?
Graphing Historical Data
Analysis of Graphed Data
Random Fluctuations
Seasonality
Trend
Seasonality and Trend
Forecasting Formulas
Random Fluctuations
Seasonality
Trend
Seasonality and Trend
Using Computers for Forecasting
Qualitative Methods for Forecasting
Nominal Group Technique
Delphi Technique
Other Decision-Making Tools
Expected Value
Linear Programming
Inventory Control
Planning and Tracking a Project
Gantt Chart
Critical Path Method and PERT
Implications for Nurse Managers
Key Concepts
Suggested Readings
Marketing
Chapter Goals
Introduction
The Essence of Marketing: Assessing Customer Needs
Understanding Customers
Why Is Marketing Important for Nurse Managers?
Keeping the Organization Current
Marketing the Importance of Nursing
Marketing Concepts
Understanding the Market
Market Segmentation
Customer Behavior
Market Measurement
Market Share
Market Research
Advertising
Marketing Plans
Organizational Mission/Goals
Internal-External Analysis
Strategic Marketing Plan
The BCG Matrix
Life-Cycle Analysis
Choice of Strategy
Tactics
Product
Price
Place
Promotion
Marketing Failures
The Role of Marketing in Nurse Recruitment
Implications for Nurse Managers
Key Concepts
Suggested Readings
The Nurse as Entrepreneur
Chapter Goals
Introduction
Characteristics of Nurse Entrepreneurs
Opportunities for Nurse Entrepreneurs
Starting Your Own Business
Legal and Financial Issues
Business Plan
The Steps in Developing a Business Plan
Project Proposal
Product Definition
Market Analysis
Rough Financial Plan
Detailed Operations Plan
Detailed Financial Plan
Pro Forma Financial Statements
Forecasting and Capital Budgeting
Sensitivity Analysis
Examination of Alternatives
The Elements of a Business Plan Package
Examples of Entrepreneurs
Key Concepts
Suggested Readings
The Future
Nursing and Financial Management: Current Issues and Future Directions
Chapter Goals
Introduction
Nursing Financial Management Research
Current and Future Issues in Financial Management in Nursing
The Evolving Role of the Chief Nurse Executive in Financial Management
Setting Organizational Policy
Continuing Organizational Responsibility for Nursing Expenses
Assuming Organizational Responsibility for Nursing Revenues
Assuming an Organizational Role in New Ventures
Responding to Extraorganizational Changes
Government Relations
Payer Relations
Future Role of First- and Mid-Level Nurse Managers in Financial Management
The Nurse as a Policymaker for Financing Health Care
Lobbyist
Policymaker
Implications for Nurse Managers
Key Concepts
Suggested Readings
Glossary
Index
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