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110 Cards in this Set

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What information is provided by a balance sheet?
a snapshot of an organization's assets, liabilities, and shareholder equity at any particular point in time
True or false: Assets is equal to liabilities minus owner's equity.
false
What information is provided by an income statement?
information about money coming into an organization and money necessary to obtain that income, a dynamic document
What is the formula for profit?
revenues - expenses = profit (or losses)
Are operational reports found on financial reports?
no
Define assets.
Things that a business owns that can be used to generate income.
A _______ is money owed to others.
liability
When the owner puts up funds to start a business, this is known as ________.
owner's equity
Define net worth.
the difference between total liabilities and total assets.
In accrual accounting, when are transactions recorded?
when they occur
When a pharmacy records a customer's copay as a transaction but doesn't record the insurance payment until it actually arrives, this is known as _______ accounting.
cash
Scheduled wages and benefits an employee receives from an employer are known as __________.
salary
Define wages.
remuneration paid to an employee for services rendered
The figure representing the cost of buying raw materials and producing finished goods is the ___________.
cost of goods sold
What is the formula for gross margin?
sales - cost of goods sold = gross margin
Define operating expenses.
amount spent directly in support of day-to-day operations such as wages, maintenance and office supplies
gross margin - operating expenses = ___________
net profit
_________ is money brought in by the sale of goods or services.
revenues
The type of income statement in which an account is expressed as a percent of some value, for example total sales/assets, is known as a ________ income statement.
common size
What type of budget records the flow of liquid assets in and out of the organization.
cash budget
What type of budget plans for long-term investments, programs and facilities.
capital budget
Which type of budget focuses on projections for operations over a given time and can include "pro forma" revenue and expense statements.
operating budget
True or false: In top-down budgeting, everyone has a say in the budgeting process.
false
This type of budgeting down not take into consideration expenses or costs of the prior year when determining a budget going forward.
zero-based budgeting
Define budget analysis.
comparing what was planned with what occurred to identify how well the plan was met.
The figure that represents the established rate for specific products and services that is posted to each patient's accounts receivable is the ________.
charge
True or false: charge is usually greater than the cost of providing the good or service.
true
______ includes the amounts spent in producing/providing goods and services.
cost
The payment that a business actually receives for treating a patient is known as the ____________.
reimbursement
True or false: Case-rate payment encourages business to provide care economically.
true
A _______ payment is a payment made in advance of care received.
prospective
A fixed rate payment based on a specific diagnosis is known as a ______________.
DRG (diagnosis related group) payment
_______ payment is a type of payment related to the resources used and their relative value.
RVU (relative value unit) payment
This type of payment is related to the time used to provide the service.
time based payment
Name a setting in which time based payments are common.
ER, OR, and PT
A payment that is based on both the time required to provide the service and the intensity of effort required is called a ___________ payment.
resource-based relative value scale (RBRVS)
"Reward" payments when goals are met or specific activities are performed are known as ___________ payments.
incentive
What is shared savings?
payment related to a proportional share of expected short or long term savings accruing from the activity.
A type of pricing system in which there is a transaction for each and every service/product provided is ___________.
transaction based
What does a transaction-based approach emphasize?
productivity
True or false: Transacton-based approaches offer incentive to deliver good patient care.
false
Give examples of types of fee for service pricing.
dispensing fees, percentage mark-up, time based, relative value units
List examples of mixed payment approaches.
prospective payment, per diem charges, shared savings, incentive payment programs
True or false: Mixed payment approaches have the potential to increase barriers to a patient's choice of care.
true
A non transaction based payment approach is a type of pricing dominated by ____________.
capitation
What can a non transaction based payment approach reduce?
delivery of unnecessary/inefficient care
True or false: One of the disadvantages of a non transaction approach is that pharmacists can't control demand for drugs.
true
True or false: Community pharmacies are more likely to use RVU or time based pricing systems.
false
True or false: An implication of capitation is that institutions are less likely to do expensive procedures.
true
A price determined by adding a specific amount to the cost of a drug dispensed is a _________ fee.
dispensing
What is the formula for mark up on cost?
price = cost + (markup% x cost)
What is the formula for mark up on retail?
price = cost/((1-markup%)/100)
A sliding mark up percent _________ as ingredient cost increases.
decreases
With a graduated fee, the dispensing fee ____________ as ingredient cost increases.
increases
The price a pharmacy would charge a private-pay patient for a prescription is known as the _________ price.
usual and customary charge
The _____________ is the price that the pharmacy pays the drug wholesaler or manufacturer to obtain the drug product.
actual acquisition cost (AAC)
The ____________ is the price received by a manufacturer from wholesalers for drugs distributed to the retail class of trade.
average manufacturer price (AMP)
The third party's estimate of what the pharmacy pays the drug wholesaler or manufacturer for the drug is the ____________.
estimated acquisition cost (EAC)
What other prices can be used to estimate the EAC?
AWP or WAC
The maximum cost that the third party will pay for a multisource drug is the ____________.
maximum allowable cost (MAC)
True or false: To determine MAC, a third party will base its cost off the least expensive generic drug on the market.
false
The list price for what manufacturers charge drug wholesalers is the ____________.
wholesaler acquisition cost
True or false: The WAC is usually higher than the price manufacturers really charge wholesalers.
true
What is the generic formula for determining reimbursement using AWP?
AWP - % + dispensing fee
What is the generic formula for determining reimbursement using WAC?
WAC + $ + dispensing fee
What is a variable cost?
a cost that changes in total in proportion to changes in activity
Give examples of variable costs in a pharmacy.
delivery, advertising, prescription vials/labels, ingredient costs, hourly wages
A cost that remains unchanged in total for a given time period despite changes in activity is known as a __________.
fixed cost
True or false: A fixed cost becomes progressively smaller on a per unit basis as production increases.
true
Give examples of fixed costs in a pharmacy.
property taxes, utilities, salaries, rent
The sheer number of production is known as _______.
output
True or false: There is a negative relationship between output and cost.
false
_______ refers to the breadth of services/good provided.
scope of output
Inflation is an example of a _______ price.
factor/input
Efficiency is the relationship between _____ and ______.
effort, output
True or false: Relative efficiency has a direct and negative influence on cost.
true
True or false: Regulations tend to increase costs.
true
The cost of producing one additional unit is known as a __________ cost.
marginal
The total cost of all units divided by the total number of units is the ________ cost.
average
When marginal cost equals average cost, this is known as _________ returns to scale.
constant
When marginal cost is less than average cost, it is called _________ returns to scale.
increasing
When there are increasing returns to scale, increased production will drive average cost ______ and profits _______.
down, up
In a pharmacy setting, costs that are shared between the actual pharmacy and the rest of the store are known as ________ costs.
indirect
The amount it costs a pharmacy to fill a prescription above the acquisition cost of the drug is the _____________.
cost of dispensing
True or false: Labor expenses are typically allocated based on percent of time spent by various employees in the prescription department.
true
True or false: Fair share allocation is determined by which department's employees make the most money.
false
Give examples of how a pharmacy may be reimbursed for services.
Medicare part D, patient pays, self-funded health plans, employer groups
True or false: payment for services is based on the time it takes to provide a service.
true
According to WPQC, Level ___ services usually fall in line with the typical prescription process.
I (one)
Give examples of Level II services.
comprehensive medication review, medication reconciliation after hospital discharge
What services are reimbursable under the Wisconsin Medicaid Pharmaceutical care program?
patient assessment, medication review, patient education, therapeutic interchange, coordination of care
Which type of documentation has more information/is more details: claim or chart?
chart
List the factors associated with inventory management.
inventory control systems, economic order quantity, demand and supply cycles, turnover
What is the formula for determining inventory turnover rate?
inv. TOR = COGS/average inventory in cycle
A discount you receive simply for being in retail is known as a _________ discount.
trade
You might get a ________ discount if you decide to buy a larger amount of a product.
quantity
A discount based on how quickly you pay for your purchase is a ________ discount
cash
True or false: Typically discounts are applied in this order: Quantity, Cash, Trade.
false
True or false: The typically billing cycle in a pharmacy is two weeks.
true
The _____ stock is determined from demand and how long until the next order is received.
cycle (reorder quantity)
True or false: Allergy medications are an example of a product that exhibits irregular demand.
true
True or false: The economic order quantity is based on multiple items.
false
________ costs are the costs of keeping inventory.
carrying
________ costs are the costs of placing the order that are not acquisition costs.
procurement
What is the formula for EOQ?
Q = sqrt [2(PC)x(demand))/(CC)x(unit cost)]
A ________ inventory control system is when stock levels are checked and more product is ordered based on min/max quantities.
periodic
An inventory control system in which both inflow and outflow of goods are recorded immediately is a ________ system.
perpetual
In ABC inventory analysis, "A" products make up ____% of inventory and generate ____% of sales.
20, 70
In ABC inventory analysis, "B" products make up ____% of inventory and generate ____% of sales.
30, 20
In ABC inventory analysis, "C" products make up ____% of inventory and generate ____% of sales.
50, 10