University of Phoenix Material

Week Two Health Care Financial Terms Worksheet

Understanding health care financial terms is a prerequisite for both academic and professional success. This assignment is intended to ensure you understand some of the basic terms used in this course.

Complete the worksheet below according to the following guidelines:

In the space provided, write each term’s definition as used in health care management. You must define the term in your own words.
In the space provided after each term’s definition, summarize a health care management scenario that illustrates the importance of the skill, concept, procedure, or tool to which the term refers. In the scenario, you may wish to consider the following:

o Why the skill, concept, procedure, or tool is necessary for accurate record keeping, operational efficiency, excellent patient services, employee management, regulatory compliance, reducing costs, forecasting, and so forth o Successes enabled by an adequate understanding or appropriate application of the skill, concept, procedure, or tool o Risks or failures associated with an inadequate understanding or inappropriate application of the skill, concept, procedure, or tool

Save the completed worksheet as a Microsoft® Word document with your name in the file name.
Submit the file to your instructor.

Worksheet

Submitted By:

[Type your name here.]

|Term |Definition |Scenario |
|Balance sheet |A balance sheet is a snapshot of a particular |A balance sheet is critical in a workplace for several reasons. |
| |organizations financial standpoint at any given |This allows for accurate record keeping for all accounts. The |
| |time. The balance sheet consists of statements of |balance sheet can be used to develop clinical guidelines. |
| |income and expenditures over a particular period of | |
| |time. | |
|Statement of |This statement reflects the profits and losses of |Using the information on a statement of revenue and expenses will |
|revenue and |organizational accounts. This allows business to |allow for an organization to understand where their money is going.|
|expense |receive a net profit over a given time period. The |An example is using these statements to create a budget. Investors|
| |statement must include All profits and losses! |will use this to also see the financial health of a company. This |
| | |a huge benefit for organizations to organize their spending and |
| | |present it in a formal manner. |
|Revenue cycle |The revenue cycle is referred to as when a product | The revenue cycle can be used in many different ways in health |
| |is obtained until it is paid for. This is also |care. One way for example is to improve health care management. |
| |considered the progression of AR lists (account |Facilities may use the revenue cycle to improve workflow by |
| |receivables list) |scheduling and reducing Medicare denials and increase |
| | |reimbursements procedures. They can easily validate and determine |
| | |payment issues and access any risks involved. |
|Payer mix |Payer mix is the list of those who reimburse the |The payer mix in an organization can be balanced or off balance. |
| |cost of health care services. This can be a mix of |It can help organizations spot trends to help with healthy |
| |sources that bring in revenue such as patients, |practices. An organization may have different payer’s that are |
| |insurance carriers and third party payers. |from patients or 3rd party and insurance it becomes lop sided when |
| | |the payer mix is greater from one source. This helps to identify a|
| | |focus of their organization to gain the other types of business. |
|Revenue |Revenue is a simple term that refers to the total |The revenue a particular organization can produce allows for an |
| |income a organization receives over a particular |organization to say in business. Without revenue organizations |
| |period of time. |would not be able to purchase items, pay employees and other |
| | |essential office needs to keep in business. |