Deck 14: Managing Costs and Budgets

Question 1

The primary reason for calculating productive hours paid instead of simply calculating work paid per year is that productive hours enable the manager to:

A) Anticipate total costs of patient care.
B) Know how much time staff will probably be unavailable because of illness.
C) Determine when orientation needs to occur for new staff.
D) Determine the number of hours available for patient care.

Answer 1

Determine the number of hours available for patient care.

Question 2

The chief nursing officer works with her nurse managers by helping them understand how to develop and implement a budget.How would a nurse manager best describe a budget?

A) A day-to-day plan for operations.
B) A unit of service.
C) A statement of revenues and services.
D) A financial plan.

Answer 2

A financial plan.

Question 3

The chief nursing office continues to seek ways to improve health care services to patients and to save the hospital money.However,with most physicians paid on a fee-for-service contract,the chief nursing office faces a challenge.Fee-for-service can provide incentive for:

A) Offering fewer services to fewer patients.
B) Using fewer services per patient.
C) Increasing utilization of diagnostic procedures.
D) Requiring second opinions.

Answer 3

Using fewer services per patient.

Question 4

Which of the following factors is not implicated in rising health care costs?

A) Rising expectations of consumers for cure and care.
B) Method of health care funding.
C) Socioeconomic conditions.
D) Rising health care insurance costs.

Question 5

Which of the following is an example of an initiative that may reduce total health care costs?

A) Offering nurse practitioner-led clinics that educate parents about nonpharmacologic strategies for managing ear infections.
B) Educating older adults about the comparative costs of medications that are prescribed to them.
C) Lowering copayments for prescription drugs for older adults.
D) Advocating for more readily available magnetic resonance imaging (MRI)services to ensure early diagnosis.

Question 6

In preparing a budget,the nurse manager needs to anticipate the cost of benefits (e.g.,health,life insurance,pension,and retirement plans).On the basis of the usual cost of benefits,how much should a nurse manager include for a total full-time salary cost of $312,000?

A) $71,760 to $84,240
B) $62,400 to $78,000
C) $46,820 to $62,400
D) $31,200 to $46,800

Question 7

After reviewing her monthly budget report,the nurse manager sees that she has a negative variance,which prompts her to change the staffing schedule.A negative or unfavourable variance in a monthly expense report may result from:

A) Overestimation of inflation.
B) Higher than expected numbers of acutely ill patients.
C) Net revenue in excess of net expenses.
D) Not replacing staff members who called in sick.

Question 8

A nurse manager gives approval for two staff nurses to attend a national conference.When reviewing the budget,the nurse manager looks at which line item?

A) Cash budget.
B) Capital budget.
C) Operating budget.
D) Supply and expense budget.

Question 9

Physicians in a small rural hospital are reluctant to discharge older adult patients because many of the patients live more than an hour's drive from the hospital.Also,many of the patients lack the resources to travel these long distances for follow-up care.The hospital administration pressures the physicians to discharge patients sooner and to be more consistent with the number of hospitalization days specified within the diagnosis-related groups.Which of the following would most likely prompt the action of administrators?

A) The hospital is incurring a deficit related to a gap between the resource intensity weight (RIW)and the case mix groups (CMGs)in relation to costs of care.
B) Local home care services are expressing concern about the increased numbers of acutely ill patients being discharged into their care.
C) The resource-based relative scale for physicians does not account for the increased length of stay.
D) Patients who need acute care are being denied entry to the hospital because of the increased stay of patients in general.

Question 10

Of the following,which is the most effective strategy that a nurse manager could employ to reduce unnecessary costs in specific health care settings?

A) Training nurses on accurate documentation of supplies used for patient care.
B) Reducing the number of overtime hours worked by staff.
C) Reducing the number of staff on a unit.
D) Making decisions for patients about which care is important to their health.

Question 11

Choosing and purchasing new eyeglasses,Mr.Jones sends the receipt in to his private health insurance provider for which of the following?

A) Cost-based reimbursement.
B) Charges.
C) Contractual allowance.
D) Prospective reimbursement.

Question 12

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

A) Supplies.
B) Staffing.
C) Fixed costs.
D) Medication costs.

Question 13

Because of the complexity of reimbursement systems and its implications for the services available to patients,the nurse has a key role in which of the following?

A) Advocacy for patients with regard to services required and services used.
B) Increasing the volume of services and decreasing the number of patients served.
C) Accomplishing more with each visit and decreasing the volume of services used.
D) Decreasing the volume of services used and the number of return visits.

Question 14

Within a health care environment,where the gap between revenues and costs can mean the difference between sustainability and nonsustainability of an organization or services,it is critical for nurse managers to:

A) Maintain a clear vision of how to trim health care costs.
B) Balance value-added services against costs and revenues.
C) Consistently delete programs that are of high cost.
D) Implement programs that bring in additional revenues.

Question 15

In preparing her budget,a nurse manager determines that she needs to budget for six FTE registered nurse (RN)positions in the upcoming year.On the basis of a 40-hour week,this means that the nurse manager has determined that the budget will provide for what number of hours?

A) 12,480 productive.
B) 10,820 productive.
C) 12,480 paid.
D) 10,800 patient care.

Question 16

A nurse manager determines that RN 1 has 5 weeks of vacation time and 3 days of education and has averaged 3 sick days a year.RN 2 has 6 weeks of vacation time,has asked to attend a 3-day conference and a 2-day workshop,and has no history of sick time.RN 3 is new,and you anticipate 3 weeks of orientation,as well as 4 weeks of vacation time.RN 4 has 6 weeks of vacation and has an ongoing health condition,so you anticipate 2 weeks of sick time,as well as 3 days for education.RN 5 has 5 weeks of vacation,has no education plans,and averages 5 sick days per year.RN 6 has 6 weeks of vacation,has no education plans,and has been off ill for 4 weeks.How many hours of productive paid time can be anticipated for the budget?

A) 12,480
B) 11,200
C) 10,848
D) 10,688

Question 17

Mr.and Mrs.Amin,an older adult couple with limited means and are considering options after the hospitalization of Mrs.Amin with a fractured hip.Mrs.Amin is stable but requires assistance with bathing,transfer,and mobility,and this will present stress for Mr.Amin,who was hospitalized with a mild myocardial infarction last year.Considering their means and health concerns,which of the following might be the best option?

A) Hospice care.
B) Custodial nursing home care.
C) Home care.
D) Hospital care.

Question 18

The standard of care in a certain labour and delivery unit is 14 hours per patient day (HPPD),and on an average day,three patients are in labour.Analysis of the past month indicates the unit was averaging 38 hours of care.What is the productivity rating for this situation?

A) 91%
B) 101%
C) 111%
D) 271%

Question 19

A staff nurse regularly works two 12-hour shifts each week and one 8-hour shift every other week.How many full-time equivalents (FTEs)is this position?

A) 0.6
B) 0.7
C) 0.8
D) 1

Question 20

The chief nursing office of a Magnet hospital has conducted a study of ways to improve health care services.Health care services that add value for patients:

A) Accomplish health care goals.
B) Minimize costs.
C) Decrease the number of services used.
D) Involve the use of high-technology treatments.

Question 21

What would best support a request to purchase new infusion pumps for the unit?

A) Number of patient care hours anticipated for the year.
B) Cost comparisons; how much and how often infusion pumps are used; condition of existing pumps.
C) Outline of cost for each pump.
D) Estimation of total cost; no further details.

Question 22

In Canada,the primary source of funding for hospitals and health regions is a fixed,global budget transfer from the provincial or territorial government.What are the advantages of this approach to funding? (Select all that apply.)

A) Global budgets grow at a different rate than demand.
B) Autonomy to move resources.
C) Wait times increase.
D) Predictability.

Question 23

A nurse manager discovers that the actual number of visits per patient in a home health service is 3.8 visits per day,whereas the standard is 5 visits per day.On the basis of this information,the nurse manager:

A) Concludes that the complexity of care in each visit has arisen.
B) Concludes that patient volume has been decreased.
C) Decides that more information is needed before a conclusion can be reached.
D) Initiates a training session regarding the importance of ensuring that visits are made.

Question 24

A nurse manager is planning to request three new infusion pumps at a cost of approximately $1500 each.This item would typically be included in which budget?

A) Operating.
B) Strategic.
C) Unit of service.
D) Capital.

Question 25

For an experienced nurse manager who is new to an organization,it would be important to

A) Know the difference between operating and capital budgets.
B) Understand the budget timetable and level of involvement expected of individual managers in budget preparation.
C) Know why a budget is essential to the well-being of an organization.
D) Understand what factors drive up health care costs in the health care system.

Question 26

Length of stay (LOS)is the most important predictor of hospital costs.How can nurses increase efficiency within their work to decrease LOS? (Select all that apply.)

A) Evaluating staffing patterns.
B) Evaluating major work processes.
C) Eliminating areas of redundancy.
D) Using clinical information systems.
E) None of above

Question 27

During the budgeting process,nurse managers are typically responsible for which of the following? (Select all that apply.)

A) Calculating workload.
B) Developing unit operation objectives.
C) Justifying capital equipment requests.
D) Predicting cash flow.
E) Calculating patient load.

Question 28

Many provinces have moved to Group Purchasing Organizations (GPOs)to control costs with increased utilization of services.What factors are causing this increase? (Select all that apply.)

A) Consumer beliefs and attitudes.
B) Pharmaceutical usage.
C) Consumer interest in healthy lifestyles.
D) Changing population demographics.