Healthcare Economy Chapter 7

Front 1

assumptions

Back 1

Expectations or beliefs about the internal or external environment that influence administrative and financial decision-making.

Front 2

capital budget

Back 2

A budget for long-term investments with a useful life of more than a year, and that are often high cost.

Front 3

cash flow budget

Back 3

A budget that estimates the flow of money in and out of the business.

Front 4

cash flows from operating activities

Back 4

Revenues, cash received by the business, also called cash inflows and reported in the cash flow budget.

Front 5

cash inflows

Back 5

Revenues, cash received by the business, also called cash flows from operating activities and reported in the cash flow budget.

Front 6

cash outflows from operating activities

Back 6

Operating expenses as reported in a cash flow budget.

Front 7

direct costs

Back 7

Expenses required and budgeted for direct goods and services such as direct patient care.

Front 8

ending cash balance

Back 8

Total cash inflows less total cash outflows, reported in the cash flow budget.

Front 9

evidence-informed case rate (ECR)

Back 9

A budget based on an episode of care, often used in ACOs to develop bundled payments for all providers involved in the episode of care.

Front 10

financial threshold

Back 10

A dollar value specified as a limit, for example, a policy that any expenditure on equipment over $1,000 must be included in the capital budget.

Front 11

goal

Back 11

A broad statement regarding what the organization or program intends to accomplish.

Front 12

indirect costs

Back 12

Expenses required and budgeted for indirect goods and services such as administration, also called overhead.

Front 13

lagged value

Back 13

Budget or other financial figure that reflects prior financial activities for specified periods of time.

Front 14

master budget

Back 14

A budget report that combines the organization’s strategic plan and all of the organization's budgets and budget proposals into one document.

Front 15

mission statement

Back 15

A brief statement that communicates the overall purpose of an organization.

Front 16

net increase or decrease in cash

Back 16

The ending cash balance plus the beginning cash balance, reported in the cash flow budget.

Front 17

nonservice revenue

Back 17

Revenue received for goods or services other than direct care, such as revenue from a hospital's gift shop.

Front 18

objective

Back 18

A specified task that must be accomplished over the long-term or short-term to achieve a goal, ideally developed as a SMART objective.

Front 19

operating leverage

Back 19

Financial risk related to volume and reimbursement, particularly in settings with high fixed costs compared to variable costs.

Front 20

priorities

Back 20

Organizational activities or issues that are believed to be of the most importance for profitability or survival.

Front 21

priority matrix

Back 21

A tool, usually in the form of a grid, that helps identify the level of priority of a project or capital expenditure.

Front 22

product line budget

Back 22

A budget focusing on a clinical specialty or on selected groups of patients with same or very similar diagnoses, also called a service line budget.

Front 23

receivables

Back 23

Revenue sources for organizations such as hospitals that bill and await payment for most of their services.

Front 24

service line budget

Back 24

A budget focusing on a clinical specialty or on selected groups of patients with same or very similar diagnoses, also called a product line budget.

Front 25

service revenue

Back 25

Operating revenue generated from providing direct care services, such as revenue received when a hospital provides patient care.

Front 26

SMART objective

Back 26

Program or organizational objectives that are specific, measurable, achievable, relevant and have a time frame for achievement.

Front 27

solvent

Back 27

An individual or business that is able to pay its bills and meet its liabilities.

Front 28

special purpose budget

Back 28

A budget prepared for any purpose that has not been otherwise budgeted, such as a business plan or grant proposal.

Front 29

starting cash balance

Back 29

The amount of cash on hand at the beginning of the cash flow budget time period.

Front 30

start-up costs

Back 30

One-time expenses for items such as equipment that enable a project to be implemented.

Front 31

strategic plan

Back 31

A report that presents a plan for organizational financial management and performance for several fiscal years into the future.

Front 32

SWOT matrix

Back 32

A tool that helps in identifying and analyzing the strengths, weaknesses, opportunities and threats related to a decision, project or capital expenditure.

Front 33

total cash inflows

Back 33

An organization's service and nonservice revenues, added together and reported in the cash flow budget.

Front 34

total cash on hand

Back 34

A cash flow budget's beginning cash balance plus the total cash inflows.

Front 35

total cash outflows

Back 35

All sources of cash outflows, including personnel, nonpersonnel and capital expenses added together and reported in the cash flow budget.

Front 36

uncollectibles

Back 36

Bills not paid in full, or not paid at all.

Front 37

values

Back 37

A brief statement that incorporates the ethics and beliefs reflected in the organization and the individuals who work in the organization.

Front 38

vision

Back 38

A brief description of where an organization wants to be or what the organization plans to accomplish.

Front 39

working capital

Back 39

Cash and other liquid assets such as savings accounts that enable a business to remain solvent.