Devry HSM340 2020 JULY Week 8 Final Exam Latest

HSM340 Health Services Finance

Week 8 Final Exam   

Question 1 (CO 2) A statement that reports inflows and outflows of cash during the accounting period in the categories of operations, investing, and financing, is called a(an):

Report of management

Statement of cash flows

Income statement

 Balance sheet

 Statement of retained earnings

 Question 2 (CO 2) Which method(s) of financial reporting does (do) not recognize the impact of changes in unrealized gains in replacement value?

HC-GPL and CV-GPL

 CV and CV-GPL

 HC and CV

 HC and HC-GPL

Question 3 (CO 2) _____ is the most important financial metric to review to determine long-term financial viability.

Total margin

None of the above

Days cash on hand

Return on equity

Hospital cost index

Question 4 (CO 2) What should be a firm's primary long-term financial objective?

Equity growth

Asset growth

Debt growth

Profit growth

Question 5 (CO 3) The breakeven point occurs where:

total revenue outpaces total avoidable fixed costs

total profit margin and total costs intersect

total fixed costs and total revenue intersect

total costs and total revenue intersect

total variable costs and total revenue intersect

Question 6 (CO 3) SKF Primary Care Clinic is deciding whether to purchase MRI equipment that would enable it to perform MRI imaging services in-house rather than sending its patients to its competitor's hospital three miles away. From a financial position, if SKF were to make its decision without using net present value analysis, the clinic would need to know (or at least reasonably estimate) which of the following information?

Variable costs, volume, avoidable fixed cost, and total revenue

Revenue per unit, indirect costs, volume, and total revenue

Avoidable fixed costs, revenue per unit, volume, and contribution margin

Unavoidable fixed cost, volume, variable cost, and indirect costs

Total unit cost, indirect costs, profit, and volume

Question 7 (CO 3) Your controller has told you that the marginal profit of DRG 209 (major joint procedure) for a Medicare patient exceeds the marginal profit for an average charge patient. Why might this occur?

High prices

Low Medicare payment  

High fixed costs of treatment

Low prices

Question 8 (CO 3) Which of the following is the first step in any budgetary process?

Define standard treatment protocols

Define volumes of patients

Define standard cost profiles

Define required departmental volumes

Question 9 (CO 4) Which of the following is part of a statistics budget?

Estimation methodology

Output expectations

All of the above

Responsibility for estimation

Question 10 (CO 4) Which budgetary issue causes the most strife in all areas of a health care organization?

Setting prices

Deciding whether to use a fixed or flexible budget

Setting volume levels

Allocation of indirect costs

Question 11 (CO 4) Because prices are often fixed in the health care industry, it is increasingly important to:

None of the above

Measure effectiveness

Measure efficiency

Control costs

Question 12 (CO 3) What is the main reason that relative value units (RVUs) often are used in health care?

RVUs are the optimal way to estimate the costs of the resources consumed by cost objects such as products and customers.

RVUs enable more accurate pricing.

Not all standard units show up in a standard treatment protocol.

Some departments or cost centers may have large numbers of outputs, which make individual costing very time consuming and expensive.

Question 13 (CO 5) Which of the following is considered a direct cost?

A tracebale cost

Standard cost profiles

Direct labor and material costs

All labor costs

Question 14 (CO 2) A statement that reports inflows and outflows of cash during the accounting period in the categories of operations, investing, and financing, is called a(an):

Statement of cash flows

Statement of retained earnings

Income statement

Balance sheet

Report of management

Question 15 (CO 2) Which of the following is the BEST example of a financial metric?

Length of stay

Employee empowerment

Total margin

Accreditation by the Joint Commission on Accreditation of Healthcare Organizations

Degree of innovation

Question 16 (CO 7) Employee covered health plans are most likely to be?

HMOs.

PPOs.

High deductible health plans with a savings option.

Traditional indemnity plans

Question 17 (CO 7) Capitation plans are more common for physician payment because:

physicians want more risk in their payment plans.

they can better control utilization.  

they are concerned about adverse selection.

physicians have larger reserves and can assume more risk.

Question 18 (CO 7) Employer premium costs for health care coverage are often lowest in which type of health plan:

High deductible health plans with savings options.

HMO

POS.

PPO.

Question 19 (CO 7) Suppose that AT&T had made an offer to acquire Merck Pharmaceuticals. Ignoring potential antitrust problems, this merger would be classified as a:

Vertical merger

Horizontal merger

Cross-border merger

Conglomerate merger

Question 20 (CO 1) Which of the following is an element of the charge master?

Charge/price

Charge code

CPT/HCPCS code

All of the above

Question 21(CO 3) Estimate the total variable cost (i.e., including both routine and ancillary) per MSDRG 505 using the departmental cost/charge ratios and variable cost percentages. (Your answer might be slightly different due to rounding. Pick the closest.)

Your hospital has been approached by a major HMO to perform all their MSDRG 505 cases (foot surgeries). They have offered a flat payment of $8,000 per case. You have reviewed your charges for MSDRG 505 during the last year and found the following profile:

Average Charge: $11,300

Average LOS: 4.5 Days

                                Cost/Charge       Variable Cost %

Routine Charge $3,200   0.75        65

Operating Room               1,850     0.70        80

Anesthesiology 210         0.70        75

Lab         575         0.65        40

Radiology            275         0.65        50

Medical Supplies              3,220     0.60        85

Pharmacy            955         0.55        85

Other Ancillary  1,015     0.75        55

Total Ancillary    $8,100   0.70        75 

$3,892

 $8,070

$5,213

$7,613

$5,452

Question 22  (CO 6) Sunrise has received an invoice for medical supplies for $5,000 with terms of a 3% discount if paid within 10 days. The invoice is due on the thirtieth day. What is the annual effective cost of interest on this invoice?

5.4%

27%

65

36%

54%