The types of costs that change directly in relation to changes in volume are called - Variable
costs
The Volume of production in units and sales of goods or services, where total costs equal total
revenues, is called - The break-even point
The type of budget that forecasts cash inflows and cash outflows for the next fiscal year is called
the - Operating or cash budget
Virtually all financial experts define working capital as "total current assets" - False
Unlike other organizations, healthcare organizations tend to generate very little immediate cash
because of - - The huge number of third party payers, leading to delayed payments
- The large costs incurred for medical services, resulting in payment after the billing cycle
-The large number of negotiated installments required for payment of services by individuals
Funding for the Medicare Program is derived only from federal taxes - False
Tort reform is a bug part of healthcare reform because - It works to cut legal costs and keep
medical issues out of the courts
Administrative agencies dictate many of the ways in which healthcare workers and organizations
must function - True
A wrong against society as a whole, even if a particular individual is harmed, is considered a
violation of which type of law? - Criminal
Nonmaleficence is a concept that states that you should - Do no harm
Rights of patients include the following - - Confidentiality
- Right to refuse care
- Self-determination
- Emergency treatment in a facility by EMTALA
By understanding how people make decisions and the associated internal and external influences
on the consumer decision-making process, a healthcare manager can anticipate consumer needs
and develop solutions for those needs - True
By 2050, more than half the population of the U.S. will be comprised of minorities - True
What does the Emergency Medical Treatment and Active Labor Act of 1985 require? - Hospitals
receiving Medicare funds must provide appropriate care in their emergency rooms, if possible
Which of these elements is NOT necessary for a contract to be binding? - Must be written
Which of the following is not a required part of the definition of "informed consent"? - Having
the patient/surrogate read and sign a document
Judy set up a HSA at her financial institution and contributed consistently for future medical
expenses after retirement. Upon eligibility, she had to travel many miles across the country to see
a specific dermatologist, but it was worth it to her because she believed the treatment would
make her feel healthier. The difference between the benefits Judy perceived and the costs to
receive benefits explain her ______. - Customer Value
Highly successful organizations know that if they focus on creating long-term customer
relationships they will generally achieve _______. - Profits and Market Share
The study of ______ seeks to understand how everyday people select, secure, use, and dispose of
products, services, experiences, or ideas to satisfy their needs. - Consumer behavior
The National Labor Relations Board provides guidance for HR in addressing: - Unions and
collective bargaining
Not all HR functions are carried out exclusively by HR staff Which of the following would be
carried out by line managers? - -Interviews of candidates
-Ranking of candidates
-Hiring of a candidate
Which of the following is a typical measure used by senior management to directly assess
performance of HR efforts? - Staff Satisfaction
The largest category of healthcare workers is: - Nurses
Residency Training lasts from _____ to ____, depending on the specialty. - 3 to 10 years
The Medicare prospective payment system for reimbursing hospitals utilizes - DRGs
Position descriptions are necessary to: - -Define employer expectations for the job
-Specify job duties
-Identify knowledge, skills ad training required for the job
Which of the following is not a potential barrier to successful execution of a strategic plan? - Not
enough strategies to implement
This generation is image conscious, team-oriented, values instant gratification, and is
achievement-oriented - Millennials
Choose an inappropriate key leadership protocols - Perfectionism
Intrinsic rewards are tangible - False
This function refers to the overall design of the specific division for which the manager is
responsible - Organizing
Succession planning is - Planning to replace managers who retire or move up
Which of the following would you advise a "thinking manager" do to make an informed
decision? - Request information on/about other's views and experiences with the decision issues
Which of the following statements best describes how individuals perceive information? Because humans only absorb part of the information they perceive, their actions are based on
incomplete knowledge
The Institute of Medicine publication entitled "To Err is Human" reported that between _____
and _____ people die each year from medical errors. - 44,000 to 98,000
The Baldrige Award features seven criteria arranged in a structure-process-outcome framework.
Which of the following is NOT a structural aspect of quality in the Baldridge Award Criteria Staff Focus
_____ are abstractions of reality that explain how things work. - Mental models
What is the purpose of tactical plans? - Identify the who, what, where, when and how of
implementation
The "failure to provide a service whose benefit is greater than its risk" is the definition of which
of the following terms? - Underuse
Within the FOCUS-PDCA model, the letter U represents - Identifying measures, collecting data
and analyzing it
Work behaviors can be studied at these three levels in an organization - Group, organizational
and individual
Criminal law is generally concerned with - Society as a whole
Tort reform is a big part of healthcare reform because - It works to cut legal costs and keep
medical issues out of the courts
Which of the following is not part of the definition of healthcare malpractice? - Overpayment
Administrative agencies dictate many of the ways in which healthcare workers and organizations
must function. - True
Vulnerable populations area more exposed to risks from: - -marketing unhealthy foods
-lack of access to care
-tobacco smoking
What are the main sources of American law? - -Legislatures
-Judicial decisions
-Executive orders & administrative regulations
-State and federal constitutions
Incentive compensation is believed to have what effect on employee performance? - Increased
motivation
Job analysis is necessary to: - Define jobs
Medicaid and Medicare are private insurance programs administered by the federal government False
Board certification is: - -Voluntary
-A form of credentialing that a physician has competency in a specific area
Many of those who are uninsured: - -Are workers who are employed in industries that do not
provide health insurance
-Do not have access to routine health care
-Are US citizens
Which of the following is NOT a possible outcome of the decision-making process in cost
accounting in healthcare organizations? - Management of financial investments for the
organization
The difference between a hospital's charges for an inpatient stay in the facility and the amount
the hospital has agreed to accept from the patient's insurance carrier is called - A contractual
allowance
Which is an incorrect statement about the future of the healthcare field? - The recently enacted
Patient Protection and Affordable Care for America Act will provide full health care reform
Intrinsic rewards are tangible - False
This generation values education, training and growth opportunities, flexibility, and is considered
risk averse - Generation X
This competency involves the ability to critically analyze and solve complex problems: Conceptual
This function refers to the overall design of the specific division for which the manager is
responsible - Organizing
Which of the following is NOT a contemporary leadership model? - Great Man
Which one of the EI (Emotional Intelligence) dimensions has the definition of "Social awareness
skill, putting yourself in another's shoes"? - Empathy
Find an incorrect statement about leadership in today's healthcare industry - Many clinicians
have the management training which would help them in their new roles
Alderfer's motivation theory is based on which of the following needs? - -Growth
-Existence
-Relatedness
Which is a new trend for healthcare governance? - Evaluations used to identify issues and correct
How a person understands and acts in an organization depends upon: - How the person sees and
thinks about the situation
A Theory Y manager would believe the following about employee behavior - Most employees
seek the opportunity to contribute to the organization
Which of the following does not characterize sense-making in organizations? - Information is
organized to create an accurate understanding of a situation
Senge's five "disciplines" that characterize a learning organization include all but which one of
the following - Focusing on the performance or each organization element separately
What is the department manager's role in strategic planning? - -Monitor market activity and
report to senior leadership
-Maintain knowledge of organizational strategy and intent
-Ensure subordinates understand the organizational strategy
-Identify ways to support the organization's strategy
______ employs a structured process called DMAIC, which stands for Define, Measure,
Analyze, Improve, and Control - Six Sigma
The average years associated with the New Drug Development time-line stage. - -Clinical
Research and Development = 5years
-FDA Review of NDA = 2years
-FDA Safety Review = 1/12 years
-Pre-Clinical Research and Development
Drugs intended to treat humans only need to have laboratory and animal studies conducted False
Phase I - Designed to assess the acute safety profile of a drug
Phase II - Most often conducted in patient volunteers who have diagnosed with the disease or
condition the drug is intended to treat as opposed to normal healthy volunteers
Phase III - Require a large number of patient volunteers who are chosen at random to receive
either the investigational treatment or the currently available comparator
Phase IV - Not typically required by the FDA and are most often conducted to collect postmarketing surveillance data
Which of the following is NOT a Clinical Trial Service Provider? - Electronic data capture
(EDC)
When an investigator or investigative site is presented with a clinical trial opportunity, the
proposed study must be fully evaluated from the: - -Medical perspective
-Scientific merit
-Site capability perspective
A general surgeon would be an acceptable investigator for a clinical trial testing a new antibiotic
for the treatment of bronchitis - False
Resource Utilization Perspective requires the consideration of which of the following: - -Good
Clinical Practices (GCP)
-International Committee on Harmonization (IHC) Guidelines
The sponsor should conduct an onsite feasibility assessment: - Prior to the investigator selection
Voice activated center - Asks the participant specific information and assigns a treatment code
Random assignment - During open-label studies, the assignment of a medication kit number
designated for a specific protocol
Sequential randomization - The participant is assigned the next available treatment number or
study medication box/bottle number
Which of the following documentation should be archived at the end of the study? - -Laboratory
Manuals
-Regulatory Binders
-Investigating Meeting Brochure
-Study Specific Training Documents
____ is an individual, company, institution, or organization that assumes responsibility for the
initiation, management, or financing of the clinical trail - Clinical Trial Sponsor
EDCs are computerized case report forms that are downloaded electronically to the _____ Clinical Trial Sponsors
Forms that are collected by the monitoring site during each visit are called ______ - Case Report
Forms (CRFs)
The ____ which was written in 1979 established ethical principles ad guidelines for conducting
research - Belmont Report
It is the responsibility of the ____ to ensure the informed consent process is performed perfectly
with every research participant - Investigator
The primary purpose of the IRB is to protect the rights of the ____ - Participant
What is the first step in the informed consent process? - Recruitment
This organization offers data monitoring, data management protocol development, medical
writing, statistical analysis, contract management, site selection, and shipping and handling of
investigational supplies - Contract Research Organizations
Invasion of Privacy - Access to a person's body or behavior without consent
Breach of Confidentiality - Failure to safeguard access to the participant's hospital, school or
employment records
Psychological Harm - Undesired changes in the thought process and emotion
Physical Harm - Exposure to minor pain, discomfort, injury from invasive medical procedure or
harm from possible side affects of drugs.
Without ____, there is no way to know whether or not any improvements are due to treatments
or to some other factor such as naturally occurring improvements or placebo effect - Control
Groups
Virtually all studies have the following study procedures: - -Endpoint assessment
-Informed consent
-A treatment phase in which subject received the active treatment or the control
-A baseline period to collect data that will be used for comparison with post-treatment
assessment
-A screening visit to determine eligibility based upon inclusion or exclusion criteria
The study investigators should consider all the following factors EXCEPT _________ when
evaluating whether to participate - Public Stock: majority ownership
The two most important strategies for achieving "clean data" are: - -Careful planning
-Meticulous execution
_______ has been the "middleman" of the data management process - Case report forms (CRFs)
The first place on any document that a data point is recorded is considered a source document True
According to Nesbitt, a best practice is to resolve queries with ____ hours - 48
Which of the following are considered to be quality improvement approaches? - -Total quality
management
-Six sigma
-Lean
When an FDA inspector arrives on site, the staff should perform the following procedures
expect: - Review the financial agreement between the inspector and sponsor
IRB-directed audit - This type of audit will likely focus on the informed consent process and
subject recruitment
FDA "for cause" inspection - This type of audit is initiated as a result of a report to the FDA
Sponsor-directed audit - An independent quality audit to validate that data were collected and to
ensure that the study monitors are doing their job
The primary way that the investigator protects the rights, safety and welfare of the subject are - Informed consent
-IRB approval
-Adverse Events
Significant observations identified by the FDA are reported on a ____ form - 483
People participate in research studies for which of the reasons - -Influence of peers
-Doctor's recommendations
-Altruistic reasons
-Financial incentives
An individual who is a "no show" should be given no more than ____ opportunities before they
are taken off the participant list - 2
Hopeless - Agree that the new treatment side effects are worth the loss in quality of life and the
potential for missing important events in the person's life
Skeptic - Openly admits distrusting the investigator, research staff, or the trial
Professional Research Participant - Stops by the local medical university once a week to inquire
about potential research studies that compensate participants
Pleaser - Often elderly and is accustomed to taking the physician's advice verbatim
Which of the following factors should NOT be considered when determining participant
compensation - Impact on family
Which of the following research participants are most likely to have the study take place at their
home? - Hopeless
When designing a study budget the cost are typically broken down by: - Cost per participant
It's common to for investigators to add an additional ____ % when using the services of other
medical providers. - 10%
Investigators who frequently participate in clinical trials will create a "price list" for research
procedures - True
Which of the following should be included as line items on the budget? - -Ancillary services
-Coordination fees
-Patient fees
-Principle investigator fees
Overhead costs generally run15 -25% of the budget and should include items such as postage,
copying, payroll for administrative services, and office supplies - True
The _____ is the document that defines the interests and responsibilities of all parties involved in
conducting a clinical trial - CTA
Prior to developing a clinical research site the investigator or research group must determine
their core competencies - True
Clinical trial brokers provide investigators with clinical trial leads - True
Clinical investigations of medical devices do not need to comply with the FDA informed consent
and institution review board regulations - False
The first person a new investigator in a clinical research program should hire is - Research
coordinator
What is the definition of healthcare by the World Health Organization? - The WHO defines
healthcare as a "state of complete physical, mental and social well-being and not merely the
absence of disease or infirmity"
What type of healthcare system does the US have? - -Socialized medicine
-Socialized insurance
-National health insurance
-Out of pocket
Define health policy - Health policy is authoritative decisions that are made in the branches of
government that can direct or influence how others act, behave, and also make their decisions
Which two areas of the US healthcare are areas that need improvement? - Infant mortality and
childhood obesity
The majority of uninsured people have at least one full time worker in their family - True
Which systems are administered health care systems? - -Socialized medicine
-Single payer
What is the definition of an HMO? - A provider system with an insurance component.
Increasingly an insurer arm that oversees care rather than just paying claims
Medicaid covers over 62 million Americans, more than Medicare or any single private insurer True
More than 50% of inmates in correctional facilities are suspected of having mental illness - True
Where does most healthcare regulation come from? - State government
Which of the following is a role of the US Congress? - Control of the budget
According to the theory of incrementalism, decision makers define a policy issue, put it on the
agenda, policy options are debated, a policy is chosen and implemented - False
Evidence-based medicine can be implemented as: - Both a top-down and bottom-up approach
Which of the following is the first step in evidence-based analysis? - Generate a problem
definition
The aim of tort law is to minimize the sum of the costs of accidents and the costs of avoiding
them - True
What can a producer do when there is a shortage? - Increase the price of the product
To calculate Net Present value, what information do you need? - Initial value of the investment,
estimated time period of benefit, discount rate
What is an example of a socialized medicine model that exists in the United States today? Veterans Affairs
The phases of policy making include: - -Agenda Setting
-Policy Implementation
-Policy Adoption
-Policy Modification
Health outcome disparities exist between White Americans and African Americans - True
Which US geographic area has the highest rates of uninsured Americans - the South
Which of the following are government programs to ensure health care access to low income
individuals? - -Medicaid
-CHIP
The study of methods to "prevent, diagnose, treat and monitor a clinical condition or to improve
the delivery of care" is an example of: - Comparative Effectiveness research
When should you use cost benefit analysis? - When you want to know if an interventions
benefits outweigh its costs
An outcome is the change that results from an intervention - True
What are the essential "privileges" granted to citizens by the US Constitution? - Life, liberty and
property
What are the key provisions of the US Constitution that serve to protect the rights of US
citizens? - Due process and equal protection
Where does one find the "common law"? - In judicial decisions
A doctor in the State of Flux (County of Malaise) wishes to sue a vendor in another state for
failure to deliver $250,000 worth of medical equipment. In what type of court would the doctor's
attorney most likely file the complaint if the vendor was not incorporated in and did not have its
principle place of business in the State of Flux? - A US district court
In a case where a negative medical treatment outcome is immediately apparent and the patient is
an adult, how long does the patient have to sue the practitioner for malpractice in most
jurisdictions? - Two years
What type of liability is present in cases where the alleged wrongdoer's mens rea does not
matter? - Strict liability
Even though the plaintiff lost in Marbury vs. Madison, what key principle was confirmed? Judicial review
Where would you look if you needed additional guidance on regulations interpreting the federal
Controlled Substances Act? - CFR
What right, which is not mentioned in the Constitution, did the Supreme Court establish by
combining several of the rights contained in the Bill of Rights into a "penumbra"? - The right of
privacy
What must be secured from a patient in order to avoid a charge of battery based on making
physical contact with the patient? - Informed consent
Dr. F. Lee Collar has it as a life's goal never to be accused of malpractice. In order to achieve this
goal, what should be Dr. Collar's primary guide of conduct? - Generally accepted standards in his
professional practice area
What does the holding in the Docken case establish? - That health care providers cannot be held
liable for unforeseeable events
What is an essential feature of any contract? - Consideration
Which clause of a contract sets forth the full limits of the deal? - The integration clause
You become very angry at your partner, Les Smart, after you review an important vendor
agreement that he negotiated for your practice. What type of provision in the agreement is likely
to make you mad? - An exclusivity provision
What is the mens rea for fraud and abuse offenses? - Knowing action
What is the primary cause of most malpractice cases against physicians. - Failures in physicianpatient communications
If you need to have a non-party private citizen testify on your behalf at a trial, what is your
attorney going to request the court to issue? - A subpoena
You are aware that a discharge clerk, Clu Less, likes to take photographs of departing patients. If
a patient does not consent to this, under what theory could your facility be sued? Misappropriation of image invasion of privacy
To protect citizens from improper searches, what must be present for a search warrant to issue? Probable cause to believe a crime has occurred or may occur
The time required to implement a strategy is measured in years instead of months or weeks? True
Small for profit business - Solo or small medical group practice
Large not for profit corporation - American Cancer Society
Federal Government Agency - Centers for Medicare Services
Large for profit Health Plan - Aetna
Which one of the following is not a distinguishing feature of a Strategic Business Unit - Would
be impossible to spin off a an independent business
A strategy requires an organization to change some of the activities it is performing now,
sometimes in profound ways - True
In the strategic planning and management process, which of the following is NOT part of the
purpose of conducting an internal audit of strategic assets? - Has little impact on implementation
of the strategies
List the 3 fundamental methods for viewing, analyzing and understanding an organizations
strategic assets - -analyze financial performance
-review resources
-breakdown and evaluate value
This fundamental method analyses an organizations strategic assets and potential by describing a
____ of value adding activities it performs in creating goods and services - Chain
Which of the following are examples of non-financial metrics that could be used to assess the
success of operations and strategies in the hospital industry? - -ALOS
-Occupancy rate
-FTE's per occupied bed
-Outpatient revenue as a % of Total Revenue
4 factors that can prevent new competitors from entering the healthcare industry - -Economies of
Scale
-Product differentiation
-Capital requirements
-Switching costs
Which of the following would be considered equivalent or substitute products that customer may
elect to purchase instead of traditional medical services? - -Acupuncture
-Hypnosis
-Biofeedback
-Herbal Medicines
Which of the following types of generic competitors offer products or services that are functional
substitutes for an organizations own products and services? - Indirect
Michael Porter's Five Forces Model - 1. Threat of New Entrants
2. Threat of Substitutes
3. Bargaining Power of Customers
4. Bargaining Power of Suppliers
5. Competitive Rivalry
What does Michael Porter's Five Forces attempt to explain? - How much competition will exist
in a market along with the profitability
A medical group practice should not take into consideration special language requirements when
setting up new satellite location, because this is a form of discrimination? - False
5 variables or characteristic by which a medium sized medical practice could divide its overall
market into segments - 1. Patient demographics
2. Patient geographic location
3. Patient economics
4. Organization economies
5. Organization infrastructure
3 strategic benefits to an organization that conducts regular external environmental assessments 1. Strategies are more responsive to the environment
2. Provides early warning of environmental changes
3. Identifies useful resources in the environment
Which of the following represents possible information sources that can be used to evaluate
external environmental factors? - -Government reports
-Corporate press releases
-Commercial data bases
-Trade and professional associations
Identify the basic components of an organization's external environment. - -The industry in
which the organization is active and competing firms there
-The markets in which it sells its product or services and the customers who make purchases
there
-The general environmental forces that may impact the organizations and strategies it tried to
implement
5 stakeholders in a managed care organization - -Policymakers
-Patients
-Providers
-Payers
-Public
3 strategic benefits to an organization that conducts regular external environmental assessments 1. Strategies are more responsive to the environment
2. Provides early warning of environmental changes
3. Identifies useful resources in the environment
Four Fundamental ways in which a business can grow its revenues and profits - 1. Sell more
units of product/service to its existing customers
2. Sell more units of product/service to its new customers
3. Sell the same number of units at higher prices, which will result in higher revenues and higher
profits
4. Sell the same number of units at the same price, but produce them at lower cost, which will
result in higher profits
Structural quality refers to what is actually done in the provision and receipt of care - Fasle
One way to deal with risk is to shift it to someone else - True
Quantity demanded reflects the set of quantities demanded at various prices, all other casual
factors held constant - False
Opportunity cost reflects the value of the next highest-valued use that must be foregone when
resources are used to undertake the selected activity - True
In a competitive market, a single market-clearing price will emerge - True
One difference between Medicare Part A and Medicare Part B is - Medicare Part A is financed
primarily by a federal payroll tax (2.9%) paid by employers (1.45%) and employees (1.45%)
while Medicare Part B is finance primarily through monthly premiums
Consider two goods, X and Y, which are substitutes in consumption. An increase in the price of a
X will have the following impact on the demand for Y. - It will cause the entire demand curve
for Y to shift to the right (an increase), which would likely result in a higher price
The additional production yielded by the use of one extra unit of variable input is called: - The
marginal product
If demand is price elastic, then an increase in price will cause: - Total revenue to decrease
A physician has a financial incentive to change treatment patterns when paid by salary - Fasle
If wealth has increasing marginal utility for an individual, that individuals is said to be risk
averse - False
More inelastic demand is associated with greater moral hazard and, by extension, welfare loss
associated with insurance, holding all other factors constant - True
The MVP (marginal value product) curve is the supply curve for the input in the production
process - False
An individual will increase work time hours from zero as long as the value of lost leisure is
greater than het wage rate - False
The positive relationship between wages and labor time measures what is called the substitution
effect of income for leisure - True
Allocative efficiency implies that, given production conditions and input prices, the lowest cost
combination of inputs is used by any output level - False
Low income is a sufficient condition for coverage under Medicaid - False
In health care reform, the individual mandate is required to offset the cost to the insurance
industry for covering those with preexisting conditions, as well as to prevent the industry from
cancelling an individual's coverage following illness: - True
In the state of information asymmetry, one group of individuals potentially engaged in a
transaction has better information than another group potentially engaged in the transaction Fasle
Under the DRG system, assume a conversion rate of $500 per unit and a relative weight of 1.6,
then a hospital would receive how much for a patient with this diagnosis? - $800.00
If an individual has a 90% chance of having $10,000 in wealth and a 10% chance of having only
$9,000 because of a payout for medical care, that individual's risk premium will be $900? - No,
the risk premium is applied to the loss only in case of a negative event, so $100
If an individual has a 90% chance of having $10,000 in wealth and a 10% chance of having only
$9,000 because of a payout for medical care, what is the expected value of wealth of the
individuals? - $9,900
Which law/regulation would prohibit a physician from referring patients to an entity (health care
organization) in which he/she has a financial interest? - Stark II
Which of the following in an element of budgeted financial requirements that is not included in
budgeted expenses? - Increases in working capital
Which of the following is not a "principle" of financial accounting? - Continuity
A medical group includes a provision in its contract with an HMO to receive larger PMPM
payments if the HMO members are chronically ill. This type of provision is referred to as a: Adverse Selection
Which of the following measures is not used directly as one of the means of determining the
reasonableness of a hospital's charges? - prices of peer hospitals
A non-profit hospital reported revenues and gains in excess of expenses of $1,000,000 during the
year, but its fund balance declined by $200,000. What could explain this? - Transfer to a parent
to $1,200,000
The growth of managed-care plans and subsequent consolidation is a major reason why
managed-care contract negotiation is an important element in revenue management. - True
Data in the medical record is the primary source for documenting the provision of services. True
A withhold is a feature for payment to a health care provider that: - provides a mechanism for
reducing risk to the payer
Which of the following can a health care provider vary across different payers? - discounts
One of the advantages of a nonprofit organization compared with an investor-owned company is
that the investor-owned company is subject to federal income taxes. - True
The earnings of a standard ("C") corporation can be subject to double taxation - True
Medicare pays for hospice services under which of the following: - Part A
Since most hospitals are not-for-profit they are not generally business oriented. - Fasle
Which of the following is the primary goal of a not-for-profit healthcare organization? - To serve
the community through the provision of health care services
Which of the following is the best way to compare hospital costs? - On the basis of individual
assessment of cost for inpatient and outpatient services
Capitation plans are more common for physician payment because: - they can better control
utilization
When restating nonmonetary asset accounts, the price index at the current date represents the
price index from which the conversion is made, and the price index at the time of acquisition
represents the index to which the conversion is made - True
In the step-down cost-allocation method, the order which support areas are allocated can affect
the organization's total costs. - True
From a hospital's perspective what is most likely to be the highest risk arrangement with a payer?
- Capitation
What is/are the primary determinant(s) of firm value? - -profit
-investment
-cost of capital
Increasing marginal volume for cost payers makes economic sense if: - Fixed costs are high and
present cost payer volume is small
Flexible budgets vary from static (or forecasted) budgets on the basis of: - volume
What should be a firm's primary long-term financial objective? - equity growth
You should include interest payments when calculating a project's cash flow - False
Total revenue for the period are $50,000, operating expenses and costs $30,000, gain $3,000, and
losses $1,000. The net income before taxes will be what amount? - $22,000
Cost allocation is a way to distribute costs from support departments to revenue-producing
departments - True
What is the main reason that relative value units often are used in health care? - Some
departments or cost centers may have large numbers of outputs which make individual costing
very time consuming and expensive
Healthcare firms can reasonably expect to finance all of their investment needs with debt - False
Which of the following is part of a statistics budget? - -estimation methodology
-responsibility for estimation
-output expectations
____ is the most important financial metric to review to determine long-term financial viability return equity
In the US, healthcare organizations report their financial statements using constant dollars
measured in units of general purchasing power - False
Because prices are often fixed in the health care industry, it is increasingly important to: Control costs
Which of the following best describes "days in accounts receivable?" - a liquidity ratio that
estimates how quickly an organization converts receivables to cash
Fixed cost per unit change with respect to volume - True
Depreciation is not included in sources of cash because it is an expense - False
An insurance appraisal is one reasonable source to use for estimating physical asset's
replacement cost - True