3 Online Healthcare Management Quizzes

Study Guide for Part VII: Controlling

Notes from Dunn Additional Notes

Chapter 25) Fundamentals of Control & The Controlling function a) Chapter Objectives

i) Define the managerial function of controlling. ii) Discuss different types of control systems. iii) Outline the basic requirements of a control system

and steps in the control process iv) Review the purposes of measuring and comparing

performance v) Describe corrective-action techniques vi) Review the basic managerial steps of setting

standards, measuring performance, and taking corrective action. b) The Nature of Controlling – the process of checking performance against standards.

i) Human Reactions to Control – in behavioral terms control means placing constraints on behavior so that what people do in organizations is more or less predictable.

ii) The Supervisor and Control – having set up standards of performance, the supervisor must stay informed of the performance through: (1) Observation (2) Reports (3) Discussion (4) Control charts (5) Other devices

iii) Anticipatory Aspect of Control – decrease the time lag between results and corrective action. Sometimes good corrective action is meaningful work. 1) use of Internet 2) email usage 3) patient privacy in email 4) written policy on Internet and e-mail usage

c) Control Systems i) Anticipatory Controls – take care of problems before they

occur. Proactive approach ii) Concurrent Controls – spot problems as they unfold. iii) Feedback Controls – alerts after the event has occurred. iv) Feedback Model of control – compare actual results with

performance v) closed-loop feedback system – includes self-regulating

triggered when process deviates from standard d) The Closeness of Control

i) Basic Requirements of a Control System – similar to any good measuring method – see page 595.

ii) Understanding of Controls – everyone needs to understand the purpose behind the control method.

iii) Prompt Indication of Deviations iv) Appropriateness and Adequacy – for the activity they are

monitoring. v) Economics of Control – worth the expense vi) Flexibility vii) Corrective Action – indicate direction of response.

e) The Supervisor’s Role in the Control Function

i. Three basic steps:

a. Set standards

b. Check and appraise performance

c. Standards not met-take corrective action

ii. Establishing standards

a. Performance metrics – performance related measurements of activity or resource utilization

b. Benchmarking – establishing goals by comparing performance to others

iii. Tangible Standards – physical standards that pertain to the actual operation of a department in which goods are produced

a. Quantitative and qualitative

iv. Intangible Standards – standards that are qualitative and subjective or based on perception

v. Approaches to Establishing Standards

a. Motion and time studies – work measurement analysis

b. Time ladders – collecting data based on productivity

c. Work sampling through direct observation

d. Sampling – process of reviewing a number of cases or events – randomized and non random basis

vi. How to Select Strategic Standards

a. Consider time

b. Economical observation

vii. Communicating and Monitoring Standards

a. Make sure goals and standards communicated to everyone

b. Comparing

c. Direct Personal observation

d. Reports

e. Exception Principle - report only those that fail to meet standards

viii. Taking corrective Action – when no deviations exist means setting standards and checking performance worked

a. Deviations must be addressed

b. Look for reasons behind deviations

c. Not all deviations result from people – could be process deviations

f) Benchmarking – look at organizations who are performing better

g) Summary Chapter 26) Budgetary and Other Control

Techniques a) Chapter Objectives

i) Define the approaches, types, and purposes of budgets. ii) Outline the role of the supervisor in

preparing the budget. iii) Compare and contrast different budgeting models. iv) Review the function of budgets in cost containment.

b) The Nature of Budgeting and Budgetary Control

i) Comprehensive budgeting – includes the overall budget for the organization and many subordinate budgets for the various divisions and departments ii) Budgetary control – use of budgets to control the department’s daily operations iii) Budgets are time-consuming iv) Budget is an expense in itself v) Sometimes management performance is evaluated only in monetary terms vi) Numerical terms in Budgeting – dollars, hours, ratios

c) Making the Budget- financial or nonfinancial i) Participation in Traditional Budgeting –

grassroots budgeting (1) Gathering information. (2) Growth and strategic planning issues.

d) Budgeting Approaches i. Rolling

budget ii. Flexible budgeting – prepared for a range of

potential customer levels – adjustments through year possible

iii. Incremental budgeting – assumes budget from previous year

iv. Traditional budgeting – focuses on planned changes from previous year’s level of expenditures

v. Zero-based budgeting– the budget for the

new period ignores the previous budget, every activity submitted for funding must be justified e) Types of Budgets i) Revenue and expense budget (operations budget) ii) Capital budget – a plan that shows the major

assets to be purchased, supported by a cost benefit analysis and

ranking. iii) Cash budget – projection of cash balances at end of each month throughout the year

f) Preparing the Budget i) Pre-approach

ii) Proof iii) Publication

g) Other Budget Considerations i) Budget Director and Budget Committee ii) Length of the Budget Periods iii) Flexibility of the Budget Process iv)Budget Review and Revision

.

h) Budgets and Human Relations Issues

i. Represent restrictions

ii. Explain to staff the purpose i) Cost Controls – practice of consistently monitoring and managing costs j) Allocation of Costs – supporting non-revenue producing departments

k) Additional Controls l) Summary