Chapter 14 Introduces You to the Concept of Operational Control

question 172

Essay

Chapter 14 introduces you to the concept of operational control systems. Within the context of this discussion, certain limitations of financial control systems were presented. Provide a summary of the primary limitations of short-term financial performance indicators, such as the variances discussed in the main part of the chapter.

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Definitions:

Prospective Payment System

A healthcare payment method where the amount or rate of reimbursement is predetermined based on the diagnosis and/or procedures rather than basing it on the actual cost incurred.

Cost-Based Reimbursement

A payment method where healthcare providers are paid based on the costs of the services they deliver, often used by government programs.

Diagnosis-Related Groups

A system of classification for inpatient hospital services that groups patients into categories based on their diagnoses, surgical procedures, age, and other factors for the purpose of payment and analysis.

Psychiatric Ward

A specialized hospital unit dedicated to the treatment and care of individuals with acute psychiatric conditions, offering a range of therapeutic and support services.