Fiscal year The 12-month period for which financial results and statements are pre- pared for a business and reported. Many hospitals use a fiscal year that is different from the calendar year, such as July 1 to June 30 or October 1 to September 30.


Fixed budget Expenses and revenue targets that do not vary with activity levels.


Flexible budget Projected expenses and revenues that vary as a function of activity level, such as patient census or number of patient days. Productive time Hours worked on the job.


Nonproductive time Hours paid but not worked, such as vacation, time for educa- tion, sick days, and holidays.


Income statement (also commonly referred to as a profit-and-loss statement or re- sponsibility report) A monthly financial report that shows how actual revenues and expenses compare to budget projections.


Inpatient day of care (also commonly referred to as a patient day or a census day or by some federal hospitals as an occupied bed day) The period of service between the census-taking hours on two successive calendar days; the day of discharge is counted as a day of care only when the patient was admitted and discharged on the same day.2,3


Patient days The number of adult and pediatric inpatient days of care rendered in a particular time period. This number does not count as patients newborn infants born in the hospital, but it does count days of care for their mothers as well as days of care for infants born in the hospital who are transferred to a neonatal care unit. Patient days count inpatient days for swing beds (beds approved for both acute care and skilled nursing care).


Adjusted patient days A ratio used to calculate occupancy rates, staff workload, and operating costs per patient. To calculate adjusted patient days, first determine the gross revenue and the number of inpatient days.


Adjusted patient days = (Inpatient days × gross revenue)/(inpatient revenue)


Fixed asset An asset that is not consumed or sold during the normal course of busi- ness, such as land, buildings, equipment, machinery, vehicles, and other such items. Any asset expected to last or be in use for more than 1 year is considered a fixed asset.


Depreciation The process of budgeting for the expense of a fixed asset over its ex- pected length of use, rather than charging the entire cost against one budget period. For example, if a hospital bought new tray-line hot-steam wells for $30,000 and expected them to last 10 years, the hospital might use the straight-line depreciation method (depreciation per year equals the total value of the fixed asset divided by the years of anticipated service or use) to record the expense of the steam wells at $3,000 per year for 10 years.1 down further into a monthly cost.


For budgeting purposes, depreciation is often broken


Net operating income The health care institution’s operating income after oper- ating expenses are deducted but before income taxes and interest are deducted. Also referred to as the bottom line or PBIT (profit before interest and taxes).


170 EFFECTIVE LEADERSHIP & MANAGEMENT IN NUTRITION & DIETETICS


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