Page 112 - Clinical Managers Orientation Binder

Revenue and Cost Basics

Operating Expenses

Operating Variable Fixed
Expenses
Costs dependent on Costs not directly dependent on
changes in units changes in units
(requires larger changes for impact)
Examples of Costs of Operating
Expense Type Variable Fixed
Labor Caregivers: Program Support
(Salary/FTE/per diem/ Home Health Aide – Costs Administration
admin./HHA Expense Based on Hour Overhead Departments:
RN, PT, OT, ST, SW – HR, Finance, IT, BD, MCS
Costs Based on Visits
OTPS Medical Supplies Rent and Related
Allocated Expense Direct: Allocated based on Where expense was
specifically Generated
Indirect: No specific location of cost generation
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Revenue and Cost Basics

Driving Surplus

 But we are a non-Profit?
 Mission based – No Margin, No Mission
 Fiscally sound decision making protects the viability of the organization to
continue to serve mission
 Improve Revenues
 Strategic Volume Growth: Internal and through acquisitions
 Medicare PPS Admissions
 Rate Negotiations
 Partnerships in risk sharing
 Appropriate OASIS Documentation of Care / Case Mix
 Drive Efficiencies in Expense utilization
 Improving Productivity and caseload
 Appropriate Visit and Hours utilization
 Contract negotiations
 Partnerships in risk sharing
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