C HAPTER 19: M ANAGING C OSTS AND
B UDGETS
Yoder-Wise: Leading and Managing in Nursing, 8th Edition
MULTIPLE CHOICE
1. Physicians in a small urban hospital are reluctant to disch arge 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 num ber of hospitalization days specified
within the DRGs. Which of the following would most likel y 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 servic es are expressing concern about the increased
acuit y 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 hospita l because of
the increased stay of patients.
ANS: A
Length of stay (LOS) is the most important predictor of healthcare
costs and extra days are a cost to the organization in terms of both the
extra days and decreased patient volume. The situation, as out lined,
does not indicate that there is a bed shortage and therefore, there is no
, evidence that other patients are being denied access to services or that
additional patient volume is not being captured. The hospital would be
concerned about the impact on i ts income because of the additional,
uncompensated care costs incurred for patients who exceed the usual
length of stay explicitl y calculated under PPS and the DRGs.
TOP: AONE competency: Business Skills
2. Within a healthcare environment, where the gap bet ween revenues and
costs can mean the difference between sustainabilit y of an organization
and nonsustainability of an organization or services, it is critical for nurse
managers to:
a. maintain a clear vision of how to trim healthcare costs.
b. balance value -added services against costs and revenues.
c. consistentl y delete programs that are of high cost.
d. implement programs that bring in additional revenues.
ANS: B
To achieve and maintain financial viability, nurse managers must be
able to think strategicall y finan ciall y and in terms of nursing care.
Cutting costs by deleting programs and bringing in additional revenue
through new programs and services are not in themselves strategic
unless the decisions made lead to qualit y care, have positive outcomes,
and are efficient in terms of cost.
TOP: AONE competency: Business Skills
, 3. Because of the complexit y of reimbursement systems and its implications
for the services available to patients, the nurse has a key role in:
a. advocacy for patients with regard to services requ ired and services
utilized.
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.
ANS: A
The specific strategies employed by organizations and nurses to
contain costs and increase revenues depend on the reimbursement
s ystem(s) within which the organization operates and therefore on
whether the volume of services is increased or whe ther the volume of
services is decreased by placing greater emphasis on efficacy in each
visit and reducing the number of return visits. Because of the
complexit y of the reimbursement environment, the nurse is placed in a
position of advocacy in terms of w hat the patient needs and how those
needs can be best met within the funding structures.
TOP: AONE competency: Knowledge of the Health Care
Environment
4. Of the following, which is the most effective strategy that a nurse
manager could employ to reduce unn ecessary costs in specific healthcare
settings?
a. Training nurses on accurate documentation of supplies used for
patient care
B UDGETS
Yoder-Wise: Leading and Managing in Nursing, 8th Edition
MULTIPLE CHOICE
1. Physicians in a small urban hospital are reluctant to disch arge 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 num ber of hospitalization days specified
within the DRGs. Which of the following would most likel y 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 servic es are expressing concern about the increased
acuit y 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 hospita l because of
the increased stay of patients.
ANS: A
Length of stay (LOS) is the most important predictor of healthcare
costs and extra days are a cost to the organization in terms of both the
extra days and decreased patient volume. The situation, as out lined,
does not indicate that there is a bed shortage and therefore, there is no
, evidence that other patients are being denied access to services or that
additional patient volume is not being captured. The hospital would be
concerned about the impact on i ts income because of the additional,
uncompensated care costs incurred for patients who exceed the usual
length of stay explicitl y calculated under PPS and the DRGs.
TOP: AONE competency: Business Skills
2. Within a healthcare environment, where the gap bet ween revenues and
costs can mean the difference between sustainabilit y of an organization
and nonsustainability of an organization or services, it is critical for nurse
managers to:
a. maintain a clear vision of how to trim healthcare costs.
b. balance value -added services against costs and revenues.
c. consistentl y delete programs that are of high cost.
d. implement programs that bring in additional revenues.
ANS: B
To achieve and maintain financial viability, nurse managers must be
able to think strategicall y finan ciall y and in terms of nursing care.
Cutting costs by deleting programs and bringing in additional revenue
through new programs and services are not in themselves strategic
unless the decisions made lead to qualit y care, have positive outcomes,
and are efficient in terms of cost.
TOP: AONE competency: Business Skills
, 3. Because of the complexit y of reimbursement systems and its implications
for the services available to patients, the nurse has a key role in:
a. advocacy for patients with regard to services requ ired and services
utilized.
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.
ANS: A
The specific strategies employed by organizations and nurses to
contain costs and increase revenues depend on the reimbursement
s ystem(s) within which the organization operates and therefore on
whether the volume of services is increased or whe ther the volume of
services is decreased by placing greater emphasis on efficacy in each
visit and reducing the number of return visits. Because of the
complexit y of the reimbursement environment, the nurse is placed in a
position of advocacy in terms of w hat the patient needs and how those
needs can be best met within the funding structures.
TOP: AONE competency: Knowledge of the Health Care
Environment
4. Of the following, which is the most effective strategy that a nurse
manager could employ to reduce unn ecessary costs in specific healthcare
settings?
a. Training nurses on accurate documentation of supplies used for
patient care
