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Managing Resources Responsibly Chapter 3. Factors Affecting Costs of Health Care.

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Presentation on theme: "Managing Resources Responsibly Chapter 3. Factors Affecting Costs of Health Care."— Presentation transcript:

1 Managing Resources Responsibly Chapter 3

2 Factors Affecting Costs of Health Care

3  Increased demand for health care services  Technological advances  Increased pharmacologic, medical equipment, and supply costs  Increase in health care personnel salaries  Increase in hospital costs  Increase in litigation

4 Revenue Sources for Health Care  Health care insurance –Fee for service –Third party payer  Governmental programs –Medicare –Medicaid –SCHIP

5 Question  The State Children’s Health Insurance Plan (SCHIP) was designed for families who did not qualify for Medicaid yet could not afford health insurance. How is this plan funded? A. By the federal government B. By the state government C. By the federal and state governments jointly D. By the state government and private endowment

6 Answer C. By the federal and state governments jointly Rationale: this plan is jointly funded by the federal government and the individual state and is administered by the state.

7 Access to Health Care  Economic access  Geographic access- –rural versus city  Cultural access –Education, language, literacy

8 Cost Containment  Using reimbursement to control costs  Prospective payment systems –Tax Equity and Fiscal Responsibility Act –Medicare and Medicaid payment policies –Diagnostic related groups ( DRGs) –Private insurance companies and managed care plans –Balanced Budget Act

9  Definition of managed care –Any health plan system in which care is actively managed by the third-party payer who sets the ground rules for care and determines where, how, and by whom care will be provided Managed Care and Preferred Providers

10  Definition of preferred provider –Preferred providers are physicians, hospitals, and other health care providers who have contracted for a specific, usually lower, payment for their services and thus have an incentive to decrease the costs Managed Care and Preferred Providers (cont'd)

11  Capitation –Plan contracts with a provider organization –Provider organization is paid a flat amount for every individual enrolled –Provider assumes the risk that an individual consumer might need very high-cost care –Incentive for the provider organization to work at health promotion and disease prevention strategies Managed Care and Preferred Providers (cont'd)

12  Restructuring of organizations providing health care  Cost awareness for nurses  Contributors to individual patient costs of care –Acuity level of the patient –Length of stay –Complications Managed Care and Preferred Providers (cont'd)

13  Cost of personnel –Accounts for 50% to 60% of the total hospital operating budget –Traditionally included on the patient’s bill –Direct nursing costs and total nursing costs –Essential to enhance accountability for efficient and cost-effective care –How many hours of work are needed –Fluctuation in acuity and census Managed Care and Preferred Providers (cont'd)

14 Question  What is included in direct nursing costs? A. Supervising other staff B. Planning and implementing patient care C. Evaluating the work of other staff D. Acuity of patients on unit

15 Answer B. Planning and implementing patient care Rationale: direct nursing costs reflect the intensity of nursing care that can be measured in time required to provide the care. They include assessing, planning, implementing, and evaluating nursing care.

16  Non-salary costs of care  Cost-containment strategies for nurses  Examining procedures and processes  Participating in prevention services  Effective assessment and management of care Cost Awareness for Nurses

17  Decrease staff turnover  Managing supplies  Legal and ethical aspects of cost containment  Future of cost containment Cost Awareness for Nurses (cont’d)

18 Question  Is the following statement true or false? Legal and ethical standards of care are defined by the profession.

19 Answer True. Rationale: legal and ethical standards for nursing care require adherence to standards of care defined by the profession.

20 Using Budgets to Manage Finances  Capital versus operating budgets  Budgets and organizational evaluation  Budget processes –Planning the budget –Value analysis –Approval of the budget  Monitoring the budget

21 Operating Budget  concerned with items that can’t be reused and that are needed for the daily operation of the facility.  Examples- –Salaries –Supples –Costs to run the institution

22 Capital Budget  Include major equipment or changes in the building such as construction, renovation  High expense items…ie anything over $1000.00  Examples of items that fall under the Capital budget include: –Remodeling –Cath lab equipment –Mechanical lift devices

23 Managing Time  Strategies for effective time management –Time assessment –Writing things down –Prioritizing activities- (Display 3.3 p. 112) –Learning to do tasks more quickly –Organizing tasks –Multitasking

24 Question  Multitasking on a nursing unit presents its own dangers. What is a danger created when a nurse multitasks? A. All tasks may not be finished on time. B. You must re-orient and re-focus. C. Delegating of tasks is not accomplished. D. You may feel scattered and forget part of the task.

25 Answer D. You may feel scattered and forget part of the task. Rationale: if you have too many tasks going, you may feel scattered and may forget some aspect.

26  Strategies continued –Delegating –Organizing with the team –Eliminating unnecessary tasks –Creating effective meetings Managing Time (cont'd)

27 Barriers to Effective Time Management  Time wasters- p.119 –Controlled –Uncontrolled  Personal approaches to time –Procrastination

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