HEALTH CARE ADMINISTRATION/FINANCE FOR HEALTH ORGANIZATIONS FINAL EXAM

Culver County Hospital has the lowest cost of any hospital in its region. However, it has continually reported very large operating losses and has depended upon tax support from the county. Assuming that positive operating margins are an objective of Culver County Hospital, the hospital could be described as:
Question 1 options:
A) Efficient and effective

B) Effective but not efficient

C) Efficient but not effective

D) None of the above

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Question 2 (1 point)

Which of the following is the primary goal of a not-for-profit healthcare organization? Choose the best answer.
Question 2 options:
A) To serve the community through the provision of health care services

B) To balance revenues with expenses

C) To provide jobs for those in the community

D) To deliver very high-quality health care services

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Question 3 (1 point)

The controller in a hospital is usually responsible for which of the following activities (choose all that apply):
Question 3 options:
A) Collection of accounts receivable

B) Developing budgets

C) Filing Medicare cost reports

D) All of the Above

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Question 4 (1 point)

St. Luke’s Convalescent Center has $200,000 in surplus funds that it wishes to invest in marketable securities. If transaction costs to buy and sell the securities are $2,200 and the securities will be held for three months, what required annual yield must be earned before the investment makes economic sense?
Question 4 options:
A) 4.4%

B) 3.6%

C) 8.3%

D) 5.6%

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Question 5 (1 point)

In the billing process of a hospital, why are medical records a critical department? The DRG system of Medicare requires proper coding of clinical information in order to achieve accurate and prompt payment and to avoid fines and penalties. which department is a critical entity in order to carry out the billing process of a hospital?
Question 5 options:
Information Technology (IT) department
Finance department
Health Information Management (HIM) department
Patient Accounts department
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Question 6 (1 point)

Community Hospital has annual net patient revenues of $150 million. At the present time, payments received by the hospital are not deposited for six days on average. The hospital is exploring a lockbox arrangement that promises to cut the six days to one day. If these funds released by the lockbox arrangement can be invested at 8 percent, what will the annual savings be? Assume the bank fee will be $2,000 per month.
Question 6 options:
A) $140,000

B) $135, 099

C) $200,337

D) $140,383

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Question 7 (1 point)

Which of the following measures is not used directly as one of the means of determining the reasonableness of a hospital’s charges?
Question 7 options:
A) return on investment (ROI)

B) costs

C) investment level

D) prices of peer hospitals

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Question 8 (1 point)

What contract provision will best protect a hospital being paid on a DRG basis for inpatient services from a catastrophic patient?
Question 8 options:
A) Most favored nation clause

B) Stop loss provision

C) Rate increase limit

D) None of the above

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Question 9 (1 point)

Suppose that HCA and Tenet were to merge. Ignoring potential antitrust problems, this merger would be classified as a:
Question 9 options:
A) Cross-border merger

B) Horizontal merger

C) Conglomerate merger

D) Vertical merger

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Question 10 (1 point)

The following reasons are good motives for mergers except:
Question 10 options:
A) Economies of scale

B) Increased purchasing power

C) Increased value for acquiring company’s shareholders

D) Unused tax shields

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Question 11 (1 point)

If the total book value of the assets of the accounting entity is $4,350,000, and the total liabilities of the accounting entity are $1,235,000, the stockholder’s equity in the accounting entity is:
Question 11 options:
A) $5,585,000

B) $3,115,000

C) $2,470,000

D) None of the Above

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Question 12 (1 point)

If an organization’s Board of Directors were to set aside assets to be used for replacement of plant and equipment, where would this be reflected on the balance sheet?
Question 12 options:
A) Assets Limited as to Use

B) Temporarily Restricted Net Assets

C) Permanently Restricted Net Assets

D) Liability

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