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:

1. day-to-day plan for operations.
2. unit of service.
3. statement of revenues and services.
4. financial plan.

d

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

1. Cash budget
2. Capital budget
3. Operating budget
4. Supply and expense budget

c

A staff nurse regularly works two 12-hour shifts each week and one 8-hour shift every other week. How many FTEs is this position?
a. 0.6
b. 0.7

c. 0.8

d. 1

b

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 unfavorable variance in a monthly expense report may result from:

1. overestimation of inflation.
2. higher than expected client acuity.
3. net revenue exceeding net expenses.
4. not replacing staff who called in sick.

b

An example of an initiative that may reduce total healthcare costs would be:

a. offering nurse practitioner–led clinics that educate parents about

non-pharmacologic strategies for managing ear infections.

b. educating seniors about the comparative costs of medications that are prescribed to them.

c. lowering copayments for prescription drugs for seniors.
d. advocating for more readily available MRI services to ensure early diagnosis.

a

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

1. Rising expectations of consumers for cure and care
2. Marketing of drugs to consumers
3. Large administrative staffs to process medical billings
4. Rising Medicare costs

d

An older adult couple with limited means and on Medicare is considering options after the hospitalization of Mrs. A. with a fractured hip. Mrs. A. is stable but requires assistance with bathing, transfer, and mobility, and this will present stress for Mr. A., 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?

1. Hospice care
2. Custodial nursing home care
3. Home care
4. Hospital care

c

After a major flu vaccination campaign, an agency bills a private insurance company for allowable costs for administration of each vaccination according to the schedule established by the insurance company for reimbursement. This is an example of which major payment method?

1. Cost-based reimbursement
2. Charges
3. Contractual allowance
4. Prospective reimbursement

a

Physicians in a small urban hospital are reluctant to discharge older adult patients because many of the patients lack private insurance and the resources to travel 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 DRGs. 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 PPS and the DRGs and costs of care.

b.Local home care services are expressing concern about the increased acuity of patients being discharged into their care.

c.The resource-based relative scale for physicians does not account for the increased length of stay.

d.Acute care patients are being denied entry to the hospital because of the increased stay of patients.

a

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

1. maintain a clear vision of how to trim healthcare costs.
2. balance value-added services against costs and revenues.
3. consistently delete programs that are of high cost.
4. implement programs that bring in additional revenues.

b

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

1. advocacy for patients with regard to services required and services utilized.
2. increasing the volume of services and decreasing the number of patients served.
3. accomplishing more with each visit and decreasing the volume of services used.
4. decreasing the volume of services used and the number of return visits.

a

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

1. Training nurses on accurate documentation of supplies used for patient care
2. Reducing the number of overtime hours worked by staff
3. Reducing the number of staff on a unit
4. Making decisions for patients about which care is important to their health

a

In preparing her budget, a nurse manager determines that she needs to budget for six FTE RN positions in the upcoming year. Based on a 40-hour week, this means that the nurse manager has determined that the budget will provide for hours.

1. 12,480 productive
2. 10,820 productive
3. 12,480 paid
4. 10,800 patient care

c

In preparing her budget, a nurse manager determines that she needs to budget for six FTE RN positions in the upcoming year. The nurse manager determines that RN 1 has 5 weeks of vacation and 3 days of education and has averaged 3 sick days a year. RN 2 has 6 weeks of vacation, 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. 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 planned, and averages 5 sick days per year. RN 6 has 6 weeks of vacation, has no educational opportunities planned, 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

c

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

1. anticipate total costs for patient care.
2. know how much time staff will likely be unavailable because of illness.
3. determine when orientation needs to occur for new staff.
4. determine the number of hours available for patient care.

d

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

1. $78,000 to $93,600
2. $62,400 to $78,000

c. $46,800 to $93,600

d. $31,200 to $46,800

c

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?

1. Operating
2. Strategic
3. Unit of service
4. Capital

d

A nurse manager is planning to request three new infusion pumps at a cost of approximately $1500 each. What would BEST support the capital request?

1. Number of patient care hours anticipated for the year
2. Cost comparisons; how much and how often infusion pumps are used; condition of existing pumps
3. Outline of cost for each pump
4. Estimation of total cost; no further details

b

As 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 preperation.

c. know why a budget is essential to the well-being of an organization.
d. understand what factors drive up healthcare costs in the healthcare system.

b

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

1. concludes that the complexity of care in each visit has arisen.
2. concludes that patient volume has been decreased.
3. decides that more information is needed before a conclusion can be reached.
4. initiates a training session regarding the importance of ensuring that visits are made.

c

Which of the following are considered variable costs? (Select all that apply.)

1. Salaries for the minimum number of staff
2. Utilities and rent
3. Managed care
4. Supplies
5. Medication and treatment supplies

d and e