Chapter 11 vocab

The extent to which there are consequences attached to carrying out responsibilities

Duties and obligations of responsibility center

The difference between what was planned (budgeted) and what was achieved (actual)

A budget that accommodates a range or multiple levels of activities

The difference between the revenues forecast in the flexible budget and those actually earned

The difference between the revenues forecast in the original budget and those in the flexible budget

Difference between the expenses forecast in the original budget and those in the flexible budget

Difference between the variable expenses forecast in the flexible budget and those actually incurred

Not spending more than is budgeted in the expense budget

Organizational units that have all the responsibilities of a traditional profit center and are responsible for return on investment

Earning the amount of revenue budget

Finding new ways to run a business that eliminate certain classes of costs

Finding supplemental sources of revenue

Support clinical cost centers and the organization as a whole

Often considered the infrastructure of the organization

Cost centers that are responsible for providing health care related services to clients, patients, or enrollees

Cost centers that are responsible for producing or selling products (or both)

Most common type of responsibility center

Responsibility for providing services and controlling their costs

Responsible for earning a profit by agreeing to take care of defined health care needs of a population for a per member fee

example: HMO's

Responsible for earning a profit by providing health care services (selling goods or services)

Example: women's and children's services

Most basic type of responsibility center

Primary responsible for ensuring that services are provided to a population in a manner that meets the volume and quality requirements of the organization

An organization unit that has been formally given the responsibility to carry out one or more tasks, to achieve one or more outcomes, or both

Responsible for controlling costs and earning revenues

The degree of dispersion of responsibility within a health care organization

Prices for products or services that are charged internally to other organizational units

Do not provide health care related services but are responsible for their profit

Two types: Those who sell their services internally and those whose primary responsibility is to bring revenues into the organization

Power to carry out a given responsibility