FACHE BOG Exam

Question 1

In a dispute between two staff physicians, the primary role of the CEO is to:

1) ask a representative of the governing authority to mediate the dispute.
2) avoid any involvement in the dispute.
3) meet both parties as soon as the problem is identified.
4) request the appropriate chief(s) of service to investigate and report back

Answer 1

4) request the appropriate chief(s) of service to investigate and report back.

The question requires knowledge of the CEO’s role on mediating disputes and the reporting relations within a healthcare facility. The staff physicians report to the chief(s) of service who, in turn, report to the CEO.

Question 2

Committees are an important management tool “primarily” because:

1) they provide a mechanism for reconciling differing opinions and facilitating decision-making.
2) they are the only way of providing for intrastaff communication.
3) they keep staff up to date on new professional developments.
4) they ensure self-expression and participation by staff.

Answer 2

1) they provide a mechanism for reconciling differing opinions and facilitating decision-making.

Answer 1 is the correct response because it is the most inclusive and proactive. The key word in this question is “primarily.” While up to date information regarding professional developments self-expression and participation may be goals in the formation of committees, it is not their “primary” function.

Question 3

Which one of the following classifications or groups of financial ratios would be most useful as a guide to “long-range financial viability” of an organization in undertaking “facility replacement?”

1) leverage ratios
2) profitability ratios
3) liquidity ratios
4) composition ratios

Answer 3

1) leverage ratios

Answer one is correct. The question requires a basic knowledge finance.The keywords are “long-range financial viability” related to “facility replacement.” Leverage ratios give an indication of the facility’s long-range financial viability and the amount of cash available for undertaking facility replacement.

Question 4

The primary purpose of quality assurance/risk management program is to:

1) comply with licensure and accreditation standards as required by state and federal legislation.
2) monitor medical staff practices in order to control the increase in malpractice rates.
3) identify potential problems that will keep the hospital from becoming a party to litigation.
4) monitor, control, and direct the institution’s effort toward achieving delivery of the optimal level care.

Answer 4

4) monitor, control, and direct the institution’s effort toward achieving delivery of the optimal level care

Answer 4 is correct because the primary purpose of the quality assurance program is the delivery of the “optimal level of care.” Other responses are secondary to the purpose of having a QA program. Remember that in a healthcare facility, patient care comes first.

Question 5

The administrator’s relationship with the Board of Directors should be one in which the administrator:

1) minimizes board involvement in any operational issues.
2) draws upon skills of board members in facilitating appropriate discussion and decision making.
3) identifies those topics with which the board shall involve itself.
4) serves as the functionary for implementing all Board of Directors’ decisions.

Answer 5

2) draws upon skills of board members in facilitating appropriate discussion and decision making.

Answer 2 is correct because it is a proactive response. The keyword is “facilitating.” The administrator’s role is to facilitate the board discussion and decision-making. Answer 4 maybe correct but only after answer 2 is accomplished.

Question 6

In consultation with the board, the administrator has decided that an effort must be made to increase the level of involvement among management personnel in quality assessment and assurance. Which one of the following options is most likely to achieve the desired results?

1) send all key management personnel to quality assessment workshops over the next year.
2) delegate quality assessment functions in question to the medical records committee.
3) delegate quality assessment education functions to the utilization review coordinator.
4) develop an in-house program using trained key personnel for presenting and discussing quality assurance and its implications for the organization.

Answer 6

4) develop an in-house program using trained key personnel for presenting and discussing quality assurance and its implications for the organization.

Answer 4 is correct. The keyword is “develop.” Answers two and three may be immediately disqualified because results are less likely to be achieved through “delegation.” Answer 4 is the most inclusive and proactive answer.

Question 7

A healthcare facility can best meet its social and economic goals by:

1) developing a realistic and coordinated approach to long-range planning.
2) devoting most of its efforts to the development of efficient operational practices.
3) having a good public relations program which will focus the facility in the community.
4) providing all reimbursable services desired by the community.

Answer 7

1) developing a realistic and coordinated approach to long-range planning.

Answer 1 is correct. Keywords are “best meet” and “social and economic.” Both social and economic goals are met through the long-range planning process. Also, the keyword in the answer is “developing.” The other responses may meet some goals, but the best way to meet goals is to developing an approach. Again, this is a much more proactive response.

Question 8

The governing body of the healthcare institution meet its responsibility for the quality of patient care by:

1) delegating accountability for patient care to the committee appointed by the governing body, which provides a formal administrative liaison between the governing body, the administration, and the medical/professional staff.
2) delegating to the Chief Executive Officer the responsibility for developing criteria for making certain that an effective medical/professional audit is carried out.
3) establishing, maintaining, and supporting through the medical/professional staff and management staff an ongoing program of review and evaluation of patient/client care and actions on findings.
4) establishing an effective system for utilization review, medical/professional audit activities, and credentialing of the medical/professional staff.

Answer 8

3) establishing, maintaining, and supporting through the medical/professional staff and management staff an ongoing program of review and evaluation of patient/client care and actions on findings.

Answer 3 is the correct response. Answers 1 and 2 can immediately be disqualified because responsibility is not met through delegating. Answer 4 can be eliminated because it only addresses some of the activities that could be used in meeting quality assurance requirements. Answer 3 is much more inclusive. Keywords are “establishing, maintaining, and supporting.” Also, answer 3 is the only response that suggests follow up on the program through “review, evaluation, and action” on the findings.

Question 9

The central role of the health services organization board includes all of the following:
A. Setting the strategic plan and service values of the organization
B. Support for assessing changing market needs
C. Support in managing important service programs or departments
D. Assuring the recruitment hire, support and reward of the CEO

Answer 9

C. Support in managing important service programs or departments

Question 10

The first role of the governing body is to:

1. manage inputs of the healthcare organization to achieve the output that are its goals
2. Recruit members who understand the health services field
3. Set objectives and develop policy to guide the organization in achieving its mission
4. Develop the operating plan and monitor departmental performance

Answer 10

3. Set objectives and develop policy to guide the organization in achieving its mission

Question 11

Internal members of the healthcare organization’s governing body:

1. Serve on an ad hoc basis and are rarely voting members
2. Are kept to a minimum due to concerns regarding confidentiality
3. Often include the CEO, medical director and CFO
4. Often include the executive staff in planning and information management

Answer 11

3. Often include the CEO, medical director and CFO

Question 12

According to the ACHE code of ethics one way that healthcare executives can avoid or minimize the negative implications of conflict of interest is to:

1. Develop a public relations plan to address potential conflict of interest scenarios
2. Not participate in the specific decision where conflict may exist
3. Ensure members submit annual lists of major activities and holdings for inspections
4. Make the conflict known to those in superior positions

Answer 12

4. Make the conflict known to those in superior positions

Question 13

Statements of earnings, financial positions, changes in financial position and retained earnings are required to be submitted yearly by all:

1. Publicly owned healthcare organizations
2. Privately owned healthcare organizations
3. Government owned healthcare organizations
4. Faith based on healthcare organizations

Answer 13

1. Publicly owned healthcare organizations

Question 14

Which of the following is an example of a capital expenditure

1. Land that is purchased for resale
2. Surgical equipment with a useful life of six months
3. A building with a useful life of 20 years
4. Medical supplies used for patient care

Answer 14

3. A building with a useful life of 20 years

Question 15

The central role of health services organization board includes all of the following:

1. Setting the strategic plan and service values of the organization
2. Support versus and changing market needs
3. Support in managing important service programs or departments
4. Assuring the recruitment higher support and reward of the CEO

Answer 15

3. Support in managing important service programs or departments

Question 16

What purpose do market plans fulfill for the healthcare organization?

1. Provide a business plan or plans as a subset of the organizations marketing plan
2. Present general goals for the organization to attain in the next 3 to 5 years
3. Develop promotional methods to be used in attaining the organizations objectives
4. Provide specific objectives for utilization attainment the next fiscal here

Answer 16

D. provide specific objectives for utilization attainment the next fiscal year

Question 17

Forecasting organizational need for human resources by focusing on specific position openings that are likely to occur and using these for planning is called:

1. Demand pull approach
2. Supply push approach
3. Succession analysis
4. Transition matrix

Answer 17

1. Demand pull approach

Question 18

A health services organization should utilize which of the following sequential processes to help establish human resources objectives and policies?

1. Analyze the current HR situation forecast HR demand reconcile with the budget forecast HR supply
2. Design HR recruitment and selection activities develop an HR compensation plan and establish HR appraisal systems
3. Determine best HR job structure perform HR job evaluations establish HR training and development plan
4. Conduct HR job analysis determine best HR job structure and establish HR information systems

Answer 18

1. Analyze the current HR situation, forecast HR demand, reconcile with the budget, forecast HR supply

Question 19

Forecasting the internal supply of employees as they move from their current jobs into others through promotion, lateral moves and terminations is called:

1. Graphic rating approach
2. Supply push approach
3. Demand pull approach
4. Rating scale method

Answer 19

B. Supply push approach

Question 20

Which of the following describes the conflict management strategy that would have the most immediate effect on reducing conflict behavior:

1. Imposition of formal authority to resolve or suppress conflict
2. implementation of substantial super ordinate goals that require cooperation among units
3. Rotation of members of one unit into another unit
4. Provision of intergroup training that requires listing of perceptions and identifying differences

Answer 20

1. Imposition of formal authority to resolve or suppress conflict

Question 21

Multi rater assessment 360° feedback of managers in healthcare organizations is best used:

1. In the development of a specific action plan by appraisees
2. As part of a training or coaching session
3. As part of the performance appraisal system of the organization
4. When the appraisers are held accountable for their ratings

Answer 21

1. In the development of a specific action plan by appraisees

Question 22

Which of the following statements best describes the statistics budget:

1. It combines volume and expense rates to forecast costs
2. It is a profit forecast for the coming year
3. It combines volume and reimbursement data to forecast revenues
4. It provides input data for other budgets

Answer 22

4. It provides input data for other budgets

Question 23

Which would be a reasonable basis on which to allocate administrative overhead costs?

1. Salaries
2. Amount of supplies used
3. Hours worked
4. Square footage

Answer 23

2. Amount of supplies used

Question 24

Which of the following is a major priority for system development in the managed-care environment?

1. Development of enterprise wide computer networks
2. Development of repository of computerized patient records
3. Development of operational inpatient systems
4. Development of strategic decision support systems

Answer 24

3. Development of operational inpatient systems

Question 25

Which of the following is considered the best source of information to help a healthcare organization improve its existing services:

1. Ongoing patient and internal customer satisfaction surveys
2. Focus groups together information and statistics from non-patients
3. Telephonic surveys of anyone who may decide to use the healthcare organization
4. Weekly meetings with staff members to determine organizational deficiencies

Answer 25

4. . Weekly meetings with staff members to determine organizational deficiencies

Question 26

Information system departments most often utilize which of the following methods to ensure confidentiality?

1. Issue security codes and limit access to the system
2. Centralize access to the computer system
3. Do not allow physician and vendor access to the system
4. Monitor and audit all entries into the system

Answer 26

1. Issue security codes and limit access to the system

Question 27

Who has the primary responsibility to assure and maintain the integrity and security of electronic data in a healthcare organization?

1. The information services steering committee
2. The information services Department
3. The CIO
4. The safety and security department

Answer 27

2. The information services Department

Question 28

Which of the following are important aspects to consider what establishing a joint venture?

1. Joint ventures involve independent management teams and independent governance structures
2. Joint ventures involve capital investments by all parties can be difficult to dissolve and are usually expected to be permanent
3. Joint ventures are managed like an internal organization and are usually renegotiated annually
4. Joint ventures are developed to acquire portions of the parent organizations and are generally excepted as irreversible

Answer 28

2. Joint ventures involve capital investments by all parties can be difficult to dissolve and are usually expected to be permanent

Question 29

What is the correct order from bottom to top of Maslow’s hierarchy of needs?

1. Physiological safety esteem belonging self actualization
2. Safety physiological belonging esteem self actualization
3. Physiological safety belonging esteem self actualization
4. Safety esteem physiological belonging esteem self-actualization

Answer 29

3. Physiological safety belonging esteem self actualization

Question 30

Communication health intranet networks (CHINs) were developed for what purpose?

1. to provide a platform for electronic medical records
2. To provide a way to disseminate community level health data
3. To provide an inexpensive way of sharing health information
4. To provide a community-based hub for sharing health information

Answer 30

4. To provide a community-based hub for sharing health information

Question 31

The overall goal of the HIPAA act of 1996 is:

1. To ensure the privacy and confidentiality of patient medical records
2. To standardize the sharing of clinical and administrative information
3. To strengthen healthcare data security standards and practices
4. To improve portability and continuity of health insurance, combat fraud

Answer 31

4. To improve portability and continuity of health insurance, combat fraud

Question 32

Medicare conditions of participation for hospitals require that a prescribing practitioner authenticate a verbal order within ——- if not defined by the state:

1. 24 hours
2. 48 hours
3. Seven days
4. 30 days

Answer 32

2. 48 hours

Question 33

What is true about the relationship between acute-care hospitals and long-term care organizations?

1. Hospitals and patients frequently have difficulty arranging for nursing home care services
2. Hospitals generally do not want to refer patients to nursing homes since part of patient care revenue must be shared
3. Nursing homes generally do not want to refer patients to hospital since this interferes with state or federal length of stay requirements
4. Nursing homes are generally thought to be superior to hospitals at chronic disease management

Answer 33

1. Hospitals and patients frequently have difficulty arranging for nursing home care services

Question 34

Which of the following is the least serious limitation to decision analysis?

1. Oversimplifying the problem
2. Inadequate data
3. The decision-makers values
4. The statistical model

Answer 34

4. The statistical model

Question 35

In a unionized organization what is the most effective contract dispute resolution finalization alternative?

1. Mediation
2. Corporate campaigns
3. Arbitration
4. Strike

Answer 35

3. Arbitration

Question 36

The real value of financial statements lies in the fact that they can be used to help:

1. Predict the firm’s future financial condition
2. Compute total margin versus periodic game
3. Relate the industry average to the net profit loss over time
4. Understand that a large portion of the hospitals net income may come from non-operating games

Answer 36

1. Predict the firm’s future financial condition

Question 37

Facing struggles such as declining profit margins, nonprofit healthcare organizations have become more dependent on what source for financing capital needs:

1. Philanthropy
2. Bond financing
3. Capital leases
4. Operational leases

Answer 37

1. Philanthropy

Question 38

You work for a county organization that is decided to issue bonds to fund a new building. What type of bond would be sold on behalf of your organization?

1. Mortgage bond
2. Corporate bond
3. Capital bond
4. Municipal bond

Answer 38

4. Municipal bond

Question 39

On a balance sheet what does the difference between total current assets and total current liabilities indicate?

1. Cash on hand
2. Net working capital
3. Liquid assets
4. Equity

Answer 39

2. Net working capital

Question 40

The capital asset pricing model (CAPM) an equilibrium model describes the relationship between which of the following?

1. Market risk and required rate of return
2. Expected rate of return and actual rate of return
3. Price and market risk
4. Expected rate of return and required rate of return

Answer 40

1. Market risk and required rate of return

Question 41

What is the most common operating indicator used to measure overall staff productivity?

1. Full-time equivalents per occupied bed
2. Total salaries and benefits as a percentage of operating expenses
3. Full-time equivalents per adjusted average daily census
4. Nursing salary and benefits as a percentage of total expenses

Answer 41

3. Full-time equivalents per adjusted average daily census

Question 42

Which of the following is not considered part of the labor budget?

1. Staff salaries
2. Hourly wages
3. Employee benefits
4. Contract staff expenses

Answer 42

4. Contract staff expenses

Question 43

When evaluating capital budgeting performance what is the best indicator of operating leverage?

1. Debt to capitalization ratio
2. Expense ratio
3. Average age of plant
4. Depreciation ratio

Answer 43

2. Expense ratio

Question 44

An analysis of proposed capital investment typically includes all of the following except:

1. Cost of capital
2. Cash flow projections
3. Liquidity ratio
4. Risk assessment

Answer 44

3. Liquidity ratio

Question 45

Revenue cycle billing management typically includes what broad activities?

1. Billing and collections for inpatient outpatient and surgical services
2. Claims processing denial management and claims payment
3. Processing accounts payable denial management and billing for outpatient services
4. Activities before services are rendered, activities that occur simultaneously with the services, and activities after services are rendered

Answer 45

4. Activities before services are rendered, activities that occur simultaneously with the services, and activities after services are rendered

Question 46

The principle goal of a health service organizations medical/hospital model is:

1. Security
2. Disease treatment
3. Quality-of-life
4. Comfort

Answer 46

B. Disease treatment

Question 47

The primary stimuli that causes educational programs to be made available to and required of staff are the:

1. Legal demands resulting from medical malpractice
2. Regulations issued by government at all levels
3. Demands and expectations of stakeholders
4. Increasingly stringent expectations of consumers

Answer 47

3. Demands and expectations of stakeholders

Question 48

Resource allocation and health services organizations involves balancing the needs of organization, staff and patients. However the essential primary focus on patients can only be met if the:

1. Strategic planning process has been effective and thorough
2. Mission and vision statements are appropriate to the task
3. Organizational culture makes a basic commitment to it
4. Basic needs of the organization and staff are addressed first

Answer 48

4. Basic needs of the organization and staff are addressed first

Question 49

Which of the following best describes a healthcare organization’s recognized service reputation that has been earned over the long-term with in its market:

1. Soft assets
2. Market share
3. Brand equity
4. Community perception

Answer 49

3. Brand equity

Question 50

Which technique would provide the most beneficial information to a healthcare organization about customer satisfaction?

1. Direct-mail surveys
2. Mall intercepts
3. Focus groups
4. Competitor analyses

Answer 50

1. Direct mail surveys

Question 51

Which of the following analyses is used for workforce planning and forecasting?

1. Qualifications inventory analysis
2. Job analysis
3. Productivity analysis
4. Ratio analysis

Answer 51

4. Ratio analysis

Question 52

Which of the following is an example of direct costs?

1. Utility bills
2. Parking operations
3. Department service
4. Drug prescriptions

Answer 52

4. Drug prescriptions

Question 53

In a hospital setting a critical pathway is best described as:

1. A document that focuses on efficiency and describes a standard set of activities to be performed for a defined category of patients
2. A set of guidelines that focus on identifying those decision points which should lead to the consistent provision of appropriate clinical practice
3. any attempt to standardize clinical activities based upon diagnostic categories and projected outcomes
4. Decision tree that focuses on physician decision-making

Answer 53

1. A document that focuses on efficiency and describes a standard set of activities to be performed for a defined category of patients

Question 54

One reason healthcare entities should document their credentialing procedures is to:

1. Meet federal compliance mandates
2. Maximize the medical staff understanding of the process
3. Minimize inconsistency and liability
4. Assist with practitioner auditing

Answer 54

3. Minimize inconsistency and liability

Question 55

One feature that distinguishes non-integrated healthcare organizations from integrated organizations is:

1. Regional community vision
2. Widely accepted brand identity
3. Seamless continuum of care
4. Defined market image

Answer 55

4. Defined market image

Question 56

Governance challenges faced by a fully integrated healthcare delivery systems are more complex than those faced by non-asset merged multi hospital systems because:

1. The components of integrated systems function in a highly interdependent manner
2. Multi-hospital systems usually have been in existence for a long time
3. Multi-hospital systems often have an independent government structure
4. Boards of multi hospital systems have a different board selection process

Answer 56

1. The components of integrated systems function in a highly interdependent manner

Question 57

The concept of demand management consists of:

1. Concurrent review
2. Risk assessment
3. Disease management
4. Chart review

Answer 57

1. Concurrent review

Question 58

The internal rate of return measures the:

1. Number of years to recover the original investment
2. Discounted future cash flows
3. Discount rate at which the net present value is zero
4. Discount rate that the firm uses in computing the cost of capital

Answer 58

3. Discount rate at which the net present value is zero

Question 59

The statement of Cash flows is typically organized into three sections: cash flow from operations; cash flow from investing activities; and cash flow from:

1. Bad debt recovery
2. Regulatory recapture
3. Financing activities
4. Donations and foundation support

Answer 59

3. Financing activities

Question 60

Which of the following combines data from a balance sheet and an income statement to create a single number that facilitates easy interpretation?

1. Financial ratio analysis
2. Acid test ratio
3. Operating margin ratio
4. Cash flow analysis

Answer 60

1. Financial ratio analysis

Question 61

Medicare DRG payment is highly dependent upon the hospital’s case mix index. This index represents the average relative weight for all Medicare patients treated in a:

1. Specific nursing unit or specialty area
2. Specific period
3. Common geographic market
4. Specific facility

Answer 61

2. Specific period

Question 62

The arrival of women for obstetrical deliveries or patient flow in an emergency department can best be analyzed through use of which technique?

1. Pert charting
2. Stochastic modeling
3. Gantt charting
4. Monte Carlo simulation

Answer 62

2. Stochastic modeling

Question 63

One approach for measuring technical quality of clinical support services is:

1. Patient satisfaction scores
2. degree of continuity of care
3. Appropriateness testing
4. Process review

Answer 63

4. Process review

Question 64

The applicability of continuous improvement in healthcare organizations assumes:

1. An upper limit of improvement
2. The physician’s perspective is dominant
3. An organizational commitment
4. The elimination of outliers

Answer 64

3. An organizational commitment

Question 65

All of the following are essential components of strategic planning except:

1. The corporate mission statements
2. Timetables for activity completion
3. Competitive analysis
4. Assessment of the external environment

Answer 65

2. Timetables for activity completion

Question 66

Which of the following is the depreciation method that best recognizes changes in the general purchasing power of the dollar and/or changes in the replacement cost of specific assets?

1. Declining-balance depreciation
2. Straight-line depreciation
3. Price-level depreciation
4. Sum of the years’ digits depreciation

Answer 66

3. Price level depreciation

Question 67

Under generally accepted accounting standards bad debts are reported as a/an:

1. Operating expense
2. Deduction from net revenue
3. Contractual allowance
4. Deduction from gross revenue

Answer 67

1. Operating expense

Question 68

The governing authority of the healthcare facility can terminate the privileges of any member of the medical/professional staff:

1. At any time, if it follows its own adopted procedures
2. At any time, with or without due process
3. Only if termination is recommended by the medical/professional executive committee
4. Only if termination is recommended by the medical/professional staff

Answer 68

1. At any time, if it follows its own adopted procedures

Question 69

Materials management can best be defined as a system of effective:

1. Purchasing of materials at the lowest possible cost
2. Distribution of materials on a scheduled basis
3. Allocation of materials
4. Control of inventories

Answer 69

3. Allocation of materials

Question 70

When facility maintenance is deferred, which of the following outcomes is predictable?

1. Higher costs
2. Lower costs
3. Deferred risk
4. Higher liability exposure

Answer 70

1. Higher costs

Question 71

If a physician of abuses a patient in the healthcare organization, initial corrective action should be taken by the:

1. Chief of Staff
2. Chief of services (department chairman)
3. Nursing unit supervisor
4. Chief executive office or

Answer 71

2. Chief of services (department chairman)

Question 72

One of the techniques most frequently used in industry to aid management in interpreting a form’s balance sheet is computation of the acid test ratio, which is the ratio of:

1. Current assets to current liabilities
2. Total assets to total liabilities
3. Cash to short-term debt
4. Cash, marketable securities and accounts receivable to current liabilities

Answer 72

4. Cash, marketable securities and accounts receivable to current liabilities

Question 73

After a marketing research problem has been identified, the researchers next step is to:

1. Conduct a literature search
2. Conduct Focus groups and collect data
3. Specify information needs
4. Design a data collection instrument

Answer 73

3. Specify information needs

Question 74

Which of the following statements is in accordance with the principle of delegation?

1. The executive who subscribes to the principle of delegation knows what he,/she wants to accomplish and exercises control over the work schedule of subordinates
2. An executive explains how he\she wants things done and points out how the subordinates contributions fits into the overall plan
3. A successful executive gives instructions telling subordinates exactly how and what sequence thing should be done
4. In applying the principle of delegation, an executive makes relatively few decisions personally and frames orders in broad general terms

Answer 74

4. In applying the principle of delegation, an executive makes relatively few decisions personally and frames orders in broad general terms

Question 75

Before submission of the annual business plan to the governing authority, the plan should be developed by:

1. Recommendations from the finance committee, on the basis of its estimate of income for the budget year
2. The heads of the profit centers, considering each centers into city revenues and expenses, with the CEO collating
3. Key executives, after receiving recommendations from the head of operating divisions
4. The heads of the operating divisions, with the CEO collating

Answer 75

3. Key executives, after receiving recommendations from the head of operating divisions

Question 76

Which financial statement is updated daily to reflect changes in assets or composition of financing?

1. The flash report
2. The balance sheet
3. The statement of operations
4. The statement of cash flows

Answer 76

B. The balance sheet

Question 77

One feature that distinguishes non-integrated healthcare organizations for integrated organizations is a:

1. Regional community vision
2. Widely excepted brand identity
3. Seamless continuum of care
4. Defined market image

Answer 77

4. Defined market image

Question 78

HCO’s often utilize special purpose software which allows rapid access to large archives of integrated data to assist management with decision making. This is typically referred to as a (an):

1. System analysis programs
2. Report writer
3. Decision matrix management tool
4. Executive decision support system

Answer 78

4. Executive decision support system

Question 79

Which of the following would represent the most common cause of adverse drug events?

1. Lack if standardization
2. Lack of drug knowledge
3. Preparation errors
4. Transcription errors

Answer 79

2. Lack of drug knowledge

Question 80

Performance improvement teams should consist of:

1. Experts in process management
2. Members from involved Microsystems
3. Middle managers with experience
4. Physicians and other users

Answer 80

2. Members from involved Microsystems

Question 81

With growing frequency, employees who have been dismissed are resorting to lawsuits to redress. In such cases, the court may find in favor of the plaintiff if the employer dismissed that plaintiff:

1) for cause, but without using progressive discipline.
2) without cause
3) before the end of the plaintiff’s probationary period
4) for union-organizing activities

Answer 81

2) without cause

Answer 2 is correct. The question requires basic knowledge of human resources issues. Courts are increasingly finding in favor of employees who are dismissed without cause.

Question 82

The evaluation of senior management is best administered:

1) when criteria are established and known to both parties
2) on a scheduled periodic basis
3) after consultation of the executive committee of the board
4) in conjunction with a salary adjustment.

Answer 82

1) when criteria are established and known to both parties

Question 83

Investor-owned healthcare systems are usually distinct from not-for-profit systems because:

1) investor-owned healthcare systems provide no uncompensated care
2) members of the medical staff of investor-owned healthcare systems may use any healthcare facility owned by the corporation
3) investor-owned healthcare systems consolidate balance sheets
4) local boards have governing authority

Answer 83

3) investor-owned healthcare systems consolidate balance sheets

Answer 3 is correct. This question requires knowledge of the forms of ownership and differences between them.

Question 84

To survive the turbulent and revolutionary changes facing the healthcare field, executives must manage internal, external, and interface stakeholders better. To do so, these executives must:

1) minimally satisfy the needs of marginal stakeholders while maximally satisfying the needs of key stakeholders.
2) establish goals for relationships with current and potential stakeholders as part of an effective strategic management process.
3) identify stakeholders who are involved in the local community healthcare delivery system.
4) react to the demands of the stakeholders so that their expectations can be met.

Answer 84

2) establish goals for relationships with current and potential stakeholders as part of an effective strategic management process.

Answer 2 is correct. This question requires knowledge of the term stakeholders. Also, “establish” is a key word because it makes answer 2 the proactive response. Answers 1, 3, and 4 contain less active words.

Question 85

The principles of quality improvement require that healthcare executives change their management philosophy from:
A) finding fault with employees to finding problems with processes
B) finding fault with employees to involving them in the performance improvement of processes
C) focusing on enhanced inspection techniques to focusing on variance
D) focusing on employees’ roles to focusing on process outcomes

Answer 85

A) finding fault with employees to finding problems with processes

Question 86

What type of problem arises when a healthcare executive knowingly allows the organization to continue double billing?
A) an ethical problem for the healthcare executive, but may not be grounds for dismissal if organizational policy is not clearly stated.
B) an actual conflict of interest, even absent a direct economic benefit to the healthcare executive
C) an ethical problem for the employee if the healthcare executive receives direct economic benefit
D) an ethical problem if it clearly violates state or federal law

Answer 86

B) an actual conflict of interest, even absent a direct economic benefit to the healthcare executive

Question 87

Which of the following is a unit of measure commonly used to determine physicians' clinical productivity?
A) RVU
B) CMS
C) IPO
D) CPU

Answer 87

A) RVU

Question 88

Which of the following third-party reimbursement methods provides the largest financial incentive for the provider to reduce cost?
A) Charge-based
B) Cost-based
C) Prospective payment
D) Per diem

Answer 88

C) Prospective payment

Question 89

Boards make better strategic decisions if they use information that is:
A) readily available on special board website
B) generated from computer studies of departmental activity reports
C) Summarized in graphs for better understanding
D) focused on measurable outcomes of service quality and economic vitality

Answer 89

D) focused on measurable outcomes of service quality and economic vitality

Question 90

What is the correct order of stages for accomplishing organization change?
A) identifying, planning, implementation, evaluation
B) planning, identifying, evaluation, implementation
C) evaluation, planning, implementation, identifying
D) planning, evaluation, identifying, implementation

Answer 90

A) identifying, planning, implementation, evaluation

Question 91

In assessing the advantage of using a focus group over a survey in evaluating a program, one could say that focus groups:
A) are likely to use a larger sample size
B) are more useful in designating improvements to a program
C) are more precise in designing improvements to a program
D) are useful only when maintaining objectivity is not important

Answer 91

B) are more useful in designating improvements to a program

Question 92

From a marketing viewpoint, the development of standards of practice, clinical pathways, clinical guidelines, and protocols can all be viewed as efforts to deal with which unique aspect of delivering services:
A) inseparability
B) intangibility
C) heterogeneity
D) perishability

Answer 92

C) heterogeneity

Question 93

The five major functions of marketing are:

A) identifying markets, promoting the organization, recruitment of providers, manage external relationships, patient selection
B) identifying markets, health promotion, managing external relationships, patient selection, attracting capable workers
C) identifying markets, promoting the organization, managing external relationships, convincing patients to select then organization, attracting capable workers
D) identifying markets, promoting the organization, managing external relationships, strategic planning, physician recruitment.

Answer 93

C) identifying markets, promoting the organization, managing external relationships, convincing patients to select then organization, attracting capable workers

Question 94

Probability models that forecast the internal flow of employees from one job category to another use a:

A) graphic rating approach
B) supply-push approach
C) transition matrix
D) curriculum path

Answer 94

C) transition matrix

Question 95

Behaviorally anchored rating scales (BARS) for specific jobs can be:
A) used to identify components of job behaviors
B) developed in a short period of time
C) used for evaluation but not for employee development
D) subjective on some scale items

Answer 95

A) used to identify components of job behaviors

Question 96

The effective cost of debt is roughly the same for both not-for-profit and investor-owned organizations because:

A) both types of organizations can issue tax-exempt debt
B) the interest rate is the same on both tax-exempt and regular debt
C) neither type of organization can issue tax-exempt debt
D) the tax deductibility of interest for investor-owned firms offsets the lower coupon rate on tax-exempt debt

Answer 96

D) the tax deductibility of interest for investor-owned firms offsets the lower coupon rate on tax-exempt debt

Question 97

The master site plan (or master facility plan) for a healthcare organization:

A) describes future facility needs (either renovation or new construction) necessary to meet strategic and operational needs
B) provides detailed design documents for all construction programs along with specific costs for each project
C) must be prepared by an outside planking or architectural firm to ensure sufficient objectivity
D) is necessary to ensure that he organization complies with certificate of need and other regulatory requirements

Answer 97

A) describes future facility needs (either renovation or new construction) necessary to meet strategic and operational needs

Question 98

All areas of healthcare facilities are subject to safety convenience, and other regulatory requirements as dictated by the state life safety codes, JCAHO, OSHA, state fire marshal, etc. which area of the facility typically has the highest standards?

A) the energy plant
B) highly used public areas
C) areas under construction
D) patient care areas

Answer 98

D) patient care areas

Question 99

The best way to reduce/contain the costs of distributing supplies throughout an organization is to:

A) purchase the most modern supply distribution system for your organization
B) minimize the number if times an item is handled from the time it is received by the organization to the time it is used
C) utilize a computerized materials management system that allows the organization to minimize inventory levels
D) negotiate a contract with an outside vendor who specializes in supply distribution to provide these services

Answer 99

B) minimize the number if times an item is handled from the time it is received by the organization to the time it is used

Question 100

The objective of maintenance and repair services is to keep the facility and it’s equipment operating like new. This goal is best archived by emphasizing:

A) prevention
B) efficiency
C) productivity
D) safety

Answer 100

A) prevention

Question 101

The facility’s plan for a healthcare organization may include plans for renovation or new construction, energy requirements, acquisitions of new property, financing options, etc. However, the facility plan begins with an estimate of each service or department’s:

A) operational needs
B) parking needs
C) staffing needs
D) equipment needs

Answer 101

A) operational needs

Question 102

An important management principle that should guide the development of information systems in healthcare organizations is to:

A) treat information as an essential organizational resource
B) delegate all decisions about information technology to technical specialists
C) employ consultants to set priorities for systems to be developed
D) always buy the newest system available to avoid technical obsolescence

Answer 102

A) treat information as an essential organizational resource

Question 103

After determining your own management strengths and weaknesses, the most effective method for follow-up is to:

1) seek out educational offerings specific to your identified needs
2) attend short courses that address current industry issues
3) read current trade journals
4) create developmental plan with goals and time frames

Answer 103

4) create developmental plan with goals and time frames

Answer 4 is correct because it involves establishing a plan with goals and time frames and is much more proactive compared to other responses.

Question 104

The major purpose of the code of ethics for members of a healthcare executives association is to:

1) Provide guidance to members in their own professional conducts.
2) Increase public understanding of the professional association.
3) Provide a framework for disciplining members when necessary.
4) Provide a framework for annually evaluating professional performance.

Answer 104

1) Provide guidance to members in their own professional conducts.

Question 105

In the planning of construction, modernization and alteration programs, “fixed” equipment:

1) is not shown in construction documents if it is owner-provided and installed by the vendor
2) includes equipment with quick- disconnect connections to utilities
3) consists of major technical equipment
4) is usually included as part of the construction contract

Answer 105

4) is usually included as part of the construction contract

Answer 4 is correct. The question requires basic knowledge of plant and facility management. The key word is “fixed” equipment, which should be included in construction contracts.

Question 106

A well-developed marketing plan will include all of the following except:

1) staffing considerations
2) competitive analysis
3) quality of care considerations
4) pricing considerations

Answer 106

3) quality of care considerations

Answer 3 is correct. While quality of care issues are a concern of healthcare administrators, they are not the tools used in marketing.

Question 107

The most important responsibility of the CIO in a healthcare organization is:

1) evaluating computer hardware, software, and intra-and interdepartmental communications
2) supporting the executive team with effective strategic planning and management information
3) developing request for proposals (RFP) for computer software
4) supervising system analysts and computer programmers to ensure that they are meeting the organization’s needs.

Answer 107

2) supporting the executive team with effective strategic planning and management information

We asked for “the most important” responsibility. As a member of the executive team, the most correct answer is #2

Question 108

A well-designed grievance system begins with:

1) an emphasis on sanctions
2) sound employment policies
3) rewards for whistleblowing
4) effective employee assistance programs

Answer 108

2) sound employment policies

The key words are “begins with.” Employment policies must be in place before a grievance system can be developed. The correct answer is #2

Question 109

Mission statements:

1) are frequently changed in response to environmental issues and marketing trends
2) don’t require formal board action when revised
3) require financial parameters
4) identify in broad terms the purposes for which an organization exists

Answer 109

4) identify in broad terms the purposes for which an organization exists

A mission statement describes what an organization does, what it’s purpose is, or why it exists.

Question 110

An important management principle that should guide the development of information systems in healthcare organizations is to:

1) treat information as an essential organizational resource
2) delegate all decisions about information technology to technical specialists
3) employ consultants to set priorities for systems to be developed
4) always buy the newest system available to avoid technical obsolescence

Answer 110

1) treat information as an essential organizational resource

Question 111

Which of the following is an example of an asset?

1) accounts payable
2) accrued employee benefits
3) property, plant, and equipment
4) unrealized gain

Answer 111

3) property, plant, and equipment

Question 112

Which statement about short-term debt reduces liquidity?

1) increased use of short-term debt reduces liquidity
2) short-term debt provides greater certainty of about interest cost over time
3) the interest rates for short term debt are typically higher than interest rates for long-term debt
4) an organization that relies on short-term debt replaces the need for working capital

Answer 112

1) increased use of short-term debt reduces liquidity

Question 113

A master patient index (mpi) can be best described as:

1) a relational database containing all identification numbers assigned to patients
2) a system for converting social security numbers to medical record numbers
3) a system for converting medical record numbers to patient account numbers
4) a longitudinal record of all patient encounters for a fixed period of time

Answer 113

1) a relational database containing all identification numbers assigned to patients

Question 114

A typical use of the internet by healthcare organizations is to:

1) deliver educational programs to employees
2) provide the medical staff with electronic access to patient records
3) advertise services available to the community
4) communicate financial information to business units of the organization

Answer 114

3) advertise services available to the community

Question 115

The best way to facilitate information system integration within a healthcare organization is to:

1) centralize all computer activities
2) use computer equipment from only one manufacturer
3) use computer software from only one vendor
4) standardize data definitions and data structures

Answer 115

4) standardize data definitions and data structures

Question 116

Which of the following is a developing technology that will help control unauthorized access to computerized information?

1) optical scanners
2) biometric access control devices
3) wireless terminals
4) high-speed modems

Answer 116

2) biometric access control devices

Question 117

In negotiating a contract for an information system, healthcare organizations should:

1) form a negotiating team and utilize legal counsel
2) use the standard contract provided by the system vendor
3) employ a consultant from among a list provided by the vendor
4) use a cost-plus contract to maximize flexibility in system design

Answer 117

1) form a negotiating team and utilize legal counsel

Question 118

Which of the following is the most important factor to consider in evaluating vendor software packages?

1) size of the vendor’s marketing staff
2) ability of the software to interface with existing systems
3) programming language used to write the software
4) geographic location of the vendor’s corporation office

Answer 118

2) ability of the software to interface with existing systems

Question 119

The CIO for a healthcare organization is typically responsible for which of the following functions?

1) information systems and finance
2) medical records and patient registration
3) telecommunications and public relations
4) information systems and telecommunications

Answer 119

4) information systems and telecommunications

Question 120

In selecting an information system, a consultant can be best used to:

1) chair the selection committee
2) make the final selection decision
3) provide technical information and an outside perspective
4) handle all communications and prospective vendors

Answer 120

3) provide technical information and an outside perspective

Question 121

The information system steering committee for a healthcare organization should perform which of the following duties?

1) information system planning, selection of software, and development of related organizational policies
2) selection and supervision of key information systems personnel
3) negotiation of contracts with vendors for equipment, software, and service
4) design and development of the information system software

Answer 121

1) information system planning, selection of software, and development of related organizational policies

Question 122

All of the following are primary functions of the information services department except:

1) ensuring the integrity, quality, and security of data
2) archiving and retrieving data
3) training and supporting users
4) utilizing information for operational decision making

Answer 122

4) utilizing information for operational decision making

Question 123

An efficient formulary and therapeutics committee in many hospitals evaluates all of the following except:

1) symptoms of adverse reactions
2) Patients’ current medication effectiveness
3) contraindications
4) specific drugs in terms of appropriateness to caseload

Answer 123

2) Patients’ current medication effectiveness

Question 124

Healthcare organizations often utilize special purpose software which allows rapid access large archives of integrated data to assist management with decision making. This is typically referred to as a (an):

1) system analysis program
2) report writer
3) decision matrix management tool
4) executive decision support system

Answer 124

4) executive decision support system

Question 125

Which of the following would represent the most common cause of adverse drug events (ADEs)?

1) lack of standardization
2) lack of knowledge of drug
3) preparation errors
4) transcription errors

Answer 125

2) lack of knowledge of drug

Question 126

What is the primary advantage of the corporate form of organization for a healthcare provider?

1) it exits by virtue of a statute providing for its formation
2) it has powers granted to it by its charter
3) it’s continued existence is not affected by the death or disability of an owner
4) it has limited liability

Answer 126

4) it has limited liability

Question 127

Law and tradition have established basic criteria for healthcare governing boards. One criteria is that:

1) all members agree to receive care at the governed organization
2) board members provide a specified amount of financial support
3) the actions of the board are reasonable and prudent
4) the board must meet a minimum of two times each year

Answer 127

3) the actions of the board are reasonable and prudent

Question 128

Continuous quality improvement assumes that:

1) achievement will be rewarded
2) there is direction from top management
3) there is no upper limit to excellence
4) interconnected work teams are in place

Answer 128

3) there is no upper limit to excellence

Question 129

Which of the following best describes the responsibility of a hospital with an emergency department (ED) when a person comes to the ED for examination or treatment?

1) the hospital must admit the patient for observation and treatment if an emergency condition exits
2) the hospital must provide an appropriate medical screening to determine whether an emergency condition exists and, if so, stabilize the condition
3) the hospital may inquire as to the individual’s method of payment or insurance status prior to rendering services
4) if the individual is uninsured, the hospital must transfer the patient to the nearest public hospital designated for the care and treatment of medically indigent persons

Answer 129

2) the hospital must provide an appropriate medical screening to determine whether an emergency condition exists and, if so, stabilize the condition

Question 130

What was the first major law to have a significant impact on individual privacy in the workplace?

1) civil rights act
2) fair credit reporting act
3) polygraph protection act
4) privacy act

Answer 130

1) civil rights act

Question 131

How does physician self-referral or stark laws apply to Medicare payments?

1) the law applies to private party insurance and does not apply to Medicare payments
2) the law established an additional payment to the normal Medicare payment fees due to the added complexity of referrals
3) the law allows a claim to be filed with Medicare for a service provided by a physician who had a financial interest in the DHS
4) the law prohibits a provider from presenting a claim to Medicare or any person or other entity for a prohibited DHS referral

Answer 131

4) the law prohibits a provider from presenting a claim to Medicare or any person or other entity for a prohibited DHS referral

Question 132

Which of the following is not an advantage of an effective Corporate Compliance Program?

1) initiating immediate and appropriate corrective actions
2) cost of implementation and operations
3) developing process to allow employees to report potential problems
4) identifying and preventing criminal and unethical conduct

Answer 132

2) cost of implementation and operations

Question 133

A privilege of confidentiality exists in a physician-patient relationship when the physician-acquired information is:

1) documented in the patient’s medical records
2) substantiated by the patient’s nurse
3) related to the care and treatment of the patient
4) confirmed and documented by the patient

Answer 133

3) related to the care and treatment of the patient

Question 134

Participating providers in the federal Medicare program must:

1) be accredited by the Joint Commission
2) service Medicaid beneficiaries
3) meet the “conditions of participation”
4) be in compliance with state “certificate of needs” laws

Answer 134

3) meet the “conditions of participation”

Question 135

Which physician organization is responsible for accrediting residency training programs?

1) ACGME
2) AAMC
3) CAT
4) BPQA

Answer 135

1) ACGME

Question 136

A balanced scorecard is a set of performance measurements used to:

1) assess patient satisfaction
2) ensure the organization does not exceed one performance metric at the expense of another
3) provide a scorecard for annual performance monitoring
4) gather and monitor financial data

Answer 136

2) ensure the organization does not exceed one performance metric at the expense of another

Question 137

Which organizational theory is illustrated by governing activities with explicit and specific procedures, arranging offices in a hierarchal fashion, and selecting candidates on the basis of their technical competency?

1) Bureaucratic
2) Contingency
3) Institutional
4) Technological

Answer 137

1) Bureaucratic

Question 138

In planning for future community health services, it is important to understand population health needs. Which ethnic category tends to proportionally use physician services the most?

1) African-American
2) Asian
3) Latino
4) White

Answer 138

4) White

Question 139

Which of the following limitations would cause a hospital OB unit to see no change in volume over a four year period?

1) organizational
2) market
3) financial
4) clinical

Answer 139

2) market

Question 140

According to CMS Conditions of Participation, under what circumstances, if any, is it permissible to deny a patient access to his or her medical record?

1) the information consists of psychotherapy notes
2) the request comes from the patient’s personal representative instead of directly from the patient (if allowed under law)
3) the provider organization will incur significant costs in copying or forwarding the requested records
4) it is never permissible to deny a patient access to his or her records

Answer 140

1) the information consists of psychotherapy notes

Question 141

Congress enacted Stark II to prohibit which of the following?

1) a physician or an immediate family member from referring a patient to an entity with which they have a financial relationship
2) hospitals and physicians from partnering to build inpatient acute care facilities
3) hospitals and physicians from joining joint venturing in the offering of outpatient imaging centers
4) a hospital from referring a patient to a wholly-owned entity of which it has total ownership

Answer 141

1) a physician or an immediate family member from referring a patient to an entity with which they have a financial relationship

Question 142

Which of the following activities should be performed by the board of directors?

1) calculating patient care fees
2) determining staffing patterns
3) recruiting new medical staff
4) hiring the CEO

Answer 142

4) hiring the CEO

Question 143

The four important aspects of clinical support services are technical quality,
patient satisfaction, continuity or integration, and:

1) cost-benefit analysis
2) outcome
3) appropriateness
4) health promotion

Answer 143

3) appropriateness

Question 144

A bar chart format, with items ranked ordered on a dependent variable, such as cost, profit, or satisfaction that examines the components of a problem in terms of their contribution to it is known as:

1) a run chart
2) a frequency table
3) Pareto analysis
4) Deming cycle

Answer 144

3) Pareto analysis

Question 145

Governing boards are typically more effective at what size?

1) 10-15 members
2) 15-20 members
3) 5-10 members
4) more than 25 members

Answer 145

1) 10-15 members

Question 146

What type of review involves evaluation of management staff by their superiors, subordinates, and internal and external customers?

1) annual review
2) 360 degree review
3) competency review
4) peer review

Answer 146

2) 360 degree review

Question 147

The role of a not-for-profit healthcare organization’s governing board includes all of the following except:

1) delineate clinical privileges
2) ensuring that quality healthcare is delivered
3) overseeing day to day operations
4) setting broad institutional policy

Answer 147

3) overseeing day to day operations

Question 148

Cost accounting is an important tool which enables the CFO to:

1) meet joint commission fiscal requirements
2) ensure supplies are competitively purchased
3) determine actual cost of providing patient care
4) improve revenue cycle returns

Answer 148

3) determine actual cost of providing patient care

Question 149

The first step in any strategic management scenario planning is to:

1) develop “what if” scenarios
2) gather information from as many sources as possible
3) develop courses of action that fit within future organizational resources
4) conduct a make vs buy analysis

Answer 149

2) gather information from as many sources as possible

Question 150

What does a liquidity ratio measure?

1) a firm’s ability to meet its current obligations in a timely manner
2) size of dividends to be paid to share holders
3) the percent of total funds provided by creditors
4) days in accounts receivable

Answer 150

1) a firm’s ability to meet its current obligations in a timely manner

Question 151

How should supervisors behave toward informal leaders in the organization?

1) maintain a positive attitude toward informal leaders
2) ensure informal leaders remain at a moderately low status within the work group
3) grant informal leaders occasional favor
4) pass information on to informational leaders before giving it to formal leaders

Answer 151

1) maintain a positive attitude toward informal leaders

Question 152

Budgets for new capital expenditures include requests for:

1) infrastructure
2) wage adjustments
3) new employee insurance plans
4) new gain share agreement with staff physicians

Answer 152

1) infrastructure

Question 153

Determining whether the help desk function is effective and whether projects are well managed are examples of measuring an information system department’s:

1) strategic competency
2) political competency
3) vendor competency
4) operational competency

Answer 153

4) operational competency

Question 154

When seeking information about fixed assets, payroll, regulatory and tax reporting, and accounts payable, an administrator will access what information management system?

1) physician practice management
2) patient administration and management
3) home health management
4) general financial management

Answer 154

4) general financial management

Question 155

The main role of the board is:

1) selecting the CEO
2) overseeing operations
3) setting institutional policy
4) running the institution in the absence of the CEO

Answer 155

3) setting institutional policy

Question 156

Health Savings Accounts (HSAs), were established through which law?

1) Consolidated Omnibus Budget Reconciliation Act
2) Medicare Prescription Drug Improvement and Modernization Act
3) Health Insurance Portability and Accountability Act
4) Americans with Disabilities Act

Answer 156

2) Medicare Prescription Drug Improvement and Modernization Act

Question 157

The only law that mandates a particular type of payment for time not worked:

1) FMLA
2) EMTALA
3) ADA
4) CMS

Answer 157

1) FMLA

Question 158

Which position is included in the NRLB Bargaining rules?

1) physician independent contractor
2) nurse supervisors
3) pharmacists
4) certified accountants

Answer 158

3) pharmacists

Question 159

One method for evaluating relative value of different jobs is:

1) broad banding
2) Gant charting
3) scalability
4) benchmarking

Answer 159

4) benchmarking

Question 160

When discharging a patient from a hospital, the institution can be held liable:

1) for providing post-discharge medications for ongoing care
2) of the patient uses public transportation after discharge and is involved in an accident resulting in injuries
3) for abandoning the patient if the patient is in need of further medical care.
4) when patients are transferred to a less costly setting where adequate care can be provided

Answer 160

3) for abandoning the patient if the patient is in need of further medical care.

Question 161

The Emergency Medical Treatment and Active Labor Act (EMTALA):

1) benefits only those who are uninsured and unable to pay
2) originated due to concerns of patient dumping
3) excludes women in active labor
4) does not require facility to forward medical records to the second facility

Answer 161

2) originated due to concerns of patient dumping

Question 162

Which of the following health maintenance organization models exerts maximum control over physician providers?

1) closed panel
2) open panel
3) network
4) point of service

Answer 162

1) closed panel

Question 163

What is generally prohibited by Stark II Laws?

1) a hospital paying a physician for admissions
2) a physician receiving payment from another physician for a referral
3) a physician referring a patient to a service owned by the physician
4) a hospital referring a patient to its own home health agency

Answer 163

3) a physician referring a patient to a service owned by the physician

Question 164

Under HIPAA, Congress required the Secretary of HHS to adopt standards to:

1) create pay-for-performance standards for CMS
2) provide for standard data elements and code sets
3) require electronic health records by 2010.
4) publish clinical outcomes results on Medicare patients

Answer 164

2) provide for standard data elements and code sets

Question 165

Which is the Shewhart process for performance improvement?

1) plan, check, do, act
2) plan, do, check, act
3) analyze, formulate, implement, evaluate
4) analyze, implement, control, evaluate

Answer 165

2) Plan, do, check, act

Question 166

Which of the following are parts of the dimensions of the strategic balanced scorecard?

1) financial performance
2) new technology
3) competitor activity
4) board/management team

Answer 166

1) financial performance

Question 167

The CEO of a 125 bed hospital realizes that her hospital is surrounded by three similar institutions and determines that her institution has no competitive advantage. What strategy should she pursue?

1) Target many market segments based on demographics.
2) prioritize market segments and heavily promote to keep groups
3) advertise broadly to increased general awareness.
4) recruit more physicians to admit to the institution.

Answer 167

2) prioritize market segments and heavily promote to key groups

Question 168

If the average daily census of an inpatient medical surgical unit is 19, and the productive hours per patient day target is 7.2, and the productive percentage calculation is 8.5, how many full-time equivalents (FTEs) should be budgeted for that of course staffing?

1) 24
2) 26
3) 30
4) 35

Answer 168

1) 24

Question 169

What in the revenue cycle process is a major impediment to prompt payment?

1) payment receipt and posting
2) claims submission
3) poor financial counseling
4) claim denial

Answer 169

4) claim denial

Question 170

Who gives final approval of the medical staff bylaws?

1) the board
2) the medical staff
3) the board executive committee
4) the medial staff executive committee

Answer 170

1) the board

Question 171

Which of the following courts is often given jurisdiction to hear cases involving such matters as surgery for an incompetent person or the involuntary commitment of a mentally ill person?

1) Family Court
2) juvenile court
3) appellate court
4) probate court

Answer 171

4) probate court

Question 172

To guard against the loss of assets, and administrator should do which of the following?

1) encourage off site storage of equipment
2) allow service directors to determine the frequency of asset inventories
3) ensure the billing and collections are handled by the same team
4) implement detailed procedures, risk control, and annual outside audits

Answer 172

4) implement detailed procedures, risk control, and annual outside audits

Question 173

The food service director is assigned responsibility for environmental services. This is an example of:

1) redundant management
2) Matrix management
3) oversight management
4) Service line management

Answer 173

2) Matrix management

Question 174

Which of the following management styles allows the highest subordinate freedom in the lowest personal authority?

1) autocratic
2) participative
3) democratic
4) Laissez-faire

Answer 174

4) Laissez-faire

Question 175

Under the regulations of the IRS, a tax-exempt and entity:

1) must provide a private benefit to those institutions operating or affiliated with the entity
2) must limit the benefit to any private individual
3) must provide a public benefit to the community
4) can minimize penalties if it limits private benefits to less than 50%

Answer 175

3) must provide a public benefit to the community

Question 176

Network of hospitals, physicians, and other healthcare providers that provide services for a negotiated fee are called:

1) HMOs
2) PSOs
3) PPOs
4) MSOs

Answer 176

3) PPOs

Question 177

Which of the following regulations exempted self-funded employer-sponsored health insurance plans from state insurance regulation?

1) BBA
2) TEFRA
3) COBRA
4) ERISA

Answer 177

4) ERISA

Question 178

The practice of a provider seeing a patient more often then is medically necessary, primarily to increase revenue through an increased number of services, is called:

1) cost shifting
2) buffering
3) turfing
4) churning

Answer 178

4) churning

Question 179

Hospitals that were acquired by hospital systems generally have which characteristic?

1) they operate at a net gain
2) they incur higher debt levels
3) they are located in markets with a small number of HMOs
4) they are younger, not-for-profit hospitals with a higher occupied beds

Answer 179

2) they incur higher debt levels

Question 180

Hospitals and Bodie to attract retain nurses despite significant running charges are called:

1) Professional excellence centers
2) shared governance facilities
3) magnet hospitals
4) Baldrige award winners

Answer 180

3) magnet hospitals

Question 181

The reimbursement method that was first adopted by Medicare in later by most third party payers is known as:

1) ICD-9
2) RBRVS
3) RUG
4) DRG

Answer 181

4) DRG

Question 182

Which segment of healthcare delivery system is exclusively dedicated to terminally ill patients?

1) level one trauma centers
2) tertiary care centers
3) hospice programs
4) pastoral care services

Answer 182

3) hospice programs

Question 183

Emerging physician organizations are usually private, for-profit corporations. In order to gain not-for-profit status, such organizations must:

1) give 50% of profits to charity
2) have a community-dominated board of governance
3) create a partnership with a nonprofit hospital
4) minimize double taxation to members by passing proceeds directly to the members

Answer 183

2) have a community-dominated board of governance

Question 184

Which of the following is a key responsibility of a governing board?

1) recruit and select the CEO
2) operationalize the organization’s strategic plan
3) assist the CEO with evaluation of the rest of the management team
4) develop a physician recruitment plan

Answer 184

1) recruit and select the CEO

Question 185

Which of the following networks is intended to reduce costs and improve quality by giving access to financial, clinical, and administrative information?

1) community health information network (CHIN)
2) local area health network (LAHN)
3) virtual private health network (FPHN)
4) health file transfer network (HFTN)

Answer 185

1) community health information network (CHIN)

Question 186

When introducing a new information-technology system to a healthcare organization, resistance can be effectively addressed by:

1) eliminating existing social groups that appear within the organization
2) employing a policy of mandated to use throughout the organization
3) focusing on the system users and being responsive to their needs
4) rapidly introducing the system changes to allow staff to see the cost savings

Answer 186

3) focusing on the system users and being responsive to their needs

Question 187

Which of the following would be a discrete measure in continuous improvement?

1) gender
2) weight
3) height
4) temperature

Answer 187

1) gender

Question 188

The Qui Tam provision of the Federal false claims act is a statute aimed at those who commit fraud against the government:

1) have minimal impact in the healthcare industry
2) prohibits the citizens and sharing in the recovered
3) allows any citizen to bring suit in the name of United States
4) can be generated from news media reports

Answer 188

3) allows any citizen to bring suit in the name of United States

Question 189

Which of the following activities is illegal for tax-exempt health organizations?

1) allowing an employee to testify before a legislative body regarding pending decisions which would affect organizations
2) lobbying members of Congress for healthcare reform
3) endorsing a candidate for public office
4) sponsoring a political action committee in a for-profit subsidiary

Answer 189

3) endorsing a candidate for public office

Question 190

Which statement best describes the status of healthcare organizations under antitrust law?

1) The medical staff appointments are exempt from antitrust litigation
2) they are subject to antitrust law relative to price fixing and boycotts
3) they are exempt from most antitrust principles because they are “charitable”
4) they are subject to antitrust law, just as any other industry is

Answer 190

4) they are subject to antitrust law, just as any other industry is

Question 191

Which of the following best summarizes the legal status of the physician-patient relationship?

1) it is based on and expressed or implied contract, from which certain elements of duty arise
2) it is based on acceptance of remuneration for services rendered unless charity care is designated
3) it has no legal status in that it is a private business relationship, unless the patient is a Medicare beneficiary
4) it is governed by the hospital or health system’s medical staff bylaws

Answer 191

1) it is based on and expressed or implied contract, from which certain elements of duty arise

Question 192

A major advantage of capitation for primary care gatekeepers is:

1) guarantees primary care physicians will make more money than they ever made in fee-for-service
2) encourages primary care physicians to be more judicious in the referrals to specialists
3) elevates the primary care physician’s status in the eyes of his/her patients
4) makes it easier for healthcare plans to collect utilization data from physicians

Answer 192

2) encourages primary care physicians to be more judicious in the referrals to specialists

Question 193

Bundled pricing (paying a single fee for all services) for such services as total hip replacement or coronary artery bypass surgery affects physician-hospital relationships by:

1) reducing the need to devote administrative effort to measuring outcomes and performance indicators
2) putting the physician and hospital at other’s throat fighting over the distribution of the fee
3) promoting efforts to collaborate and integrate efforts to provide more efficient care
4) guaranteeing that only top-quality physicians will be allowed to participate in such programs

Answer 193

3) promoting efforts to collaborate and integrate efforts to provide more efficient care

Question 194

A healthcare executive serving on the board of the community mental health center. The mental health center board is evaluating proposals for inpatient psychiatric services. Proposals were received from the executives facility and several other facilities. The healthcare executive should:

1) participate in the discussion and vote if the benefits to the community outweigh possible conflicts of interest
2) not participate in the discussion or the vote
3) declare a potential conflict of interest and excuse himself or herself from participating in both the discussion in the vote
4) participate in the discussion but not vote on the protocols

Answer 194

4) participate in the discussion but not vote on the protocols

Question 195

What is the primary reason for conducting continuing education for staff?

1) staff will think the organization cares about them
2) there are significant short-term operating efficiencies
3) it is a long-term commitment to the patient
4) The joint commission in and the NCQA require it

Answer 195

3) it is a long-term commitment to the patient

Question 196

What is the first effect of demographic trends on a healthcare services organization’s strategic planning process?

1) appraising financing sources and payment levels for programs
2) establishing future staff by type and estimating staffing levels
3) determining the locations of delivery units for the next period
4) determining the range and types of services to be offered

Answer 196

4) determining the range and types of services to be offered

Question 197

Managers who use their authority to greatly enhance their salaries, benefits, and accoutrements of office may be causing a disbenefit to patients. This personal aggrandizement is known as self-dealing and can:

1) be seen most commonly in for profit HMOs
2) occur only in for profit organizations
3) occur in any healthcare service organization
4) be seen only in non-health services field charities

Answer 197

3) occur in any healthcare service organization

Question 198

Research in behavioral science has consistently found that once basic needs are met, staff is motivated most:

1) By an incentive payment program
2) only by a significant increase in salary
3) by factors such as being kept informed
4) when performance sets them apart from the group

Answer 198

3) by factors such as being kept informed

Question 199

You have been assigned to develop a marketing strategy for your organization. The most important issue to consider is that the marketing strategy be:

1) broad-based
2) customer centered
3) accessible on the Internet
4) short term oriented

Answer 199

2) customer centered

Question 200

What is the first stage in the strategic planning process?

1) board retreat
2) situation analysis
3) Mission statement development
4) action planning

Answer 200

2) situation analysis

Question 201

Which of the following techniques would play a central role in an organization being able to demonstrate equal employment compliance?

1) Job questionnaires
2) EEOC postings in the human resources department
3) A job analysis procedure
4) An established complaint process

Answer 201

3) A job analysis procedure

Question 202

An organization has made a commitment to begin training its employees to fill anticipated job openings in upcoming years. This is an example of:

1) succession planning
2) reengineering
3) position control
4) quality improvement

Answer 202

1) succession planning

Question 203

Healthcare organizations require the filing of annual disclosure statements on the part of board members and officers. This policy is intended to address:

1) inurement
2) theft
3) exploitation
4) incompetence

Answer 203

1) inurement

Question 204

Healthcare organizations are routinely faced with accommodating competing space needs. The key considerations in resolving such issues should be based upon which of the following?

1) long-range facility plan
2) return on investment for each case
3) prospective donor’s interest in the program
4) board of trustee preference

Answer 204

1) long-range facility plan

Question 205

Information systems management security is concerned with the policies and procedures for ensuring the security of:

1) data
2) software
3) hardware
4) firmware

Answer 205

1) data

Question 206

A patient files a complaint relating to a negative hospital experience. The proper handling of this patient’s complaint is to:

1) cite organizational policy
2) side against the organization
3) minimize the complaint
4) clarify the problem

Answer 206

4) clarify the problem

Question 207

The single most important way patients can help prevent medical errors from affecting them is to:

1) interact with their caregivers
2) research medical error rates among organizations
3) read and understand consent forms
4) choose large, reputable healthcare providers

Answer 207

1) interact with their caregivers

Question 208

Hospitals pursuing strategic alliances are faced with issues of vertical integration. One example of vertical integration is:

1) acquiring a long term care facility
2) creating a “super” physician-hospital organization
3) developing a system of local hospitals
4) outsourcing laboratory services

Answer 208

1) acquiring a long term care facility

Question 209

The purpose of the ACHE ethics committee is to review and recommend action on ethical violations to which group?

1) executive committee
2) board of governors
3) council of regents
4) membership committee

Answer 209

2) board of governors

Question 210

According to the ACHE code of ethics, what action can the ethics committee take against an affiliate after a grievance procedure has been initiated?

1) fine the affiliate
2) report the violation to the affiliate’s employer
3) issue a written reprimand to the affiliate
4) recommend expulsion of the affiliate

Answer 210

4) recommend expulsion of the affiliate

Question 211

ACHE’s Ethical Policy Statement on Ethical Issues Related to Downsizing recommends that healthcare executives should consider providing which of the following when downsizing?

1) financial aid
2) child care
3) family counseling
4) out-placement assistance

Answer 211

4) out-placement assistance

Question 212

According to the ACHE’s Ethical Policy Statement in Creating an Ethical Environment for Employees, the organization should:

1) ensure maximum utilization of an employee’s skills and abilities
2) create a working environment that provides freedom from coercion
3) develop a committee that addresses employee diversity and compliance
4) provide sensitivity training to new employees at orientation

Answer 212

2) create a working environment that provides freedom from coercion

Question 213

What are the three basic categories of quantitative performance measures used in conventional accounting systems?

1) market share, customer satisfaction, and quality
2) demand, sales, and cost
3) demand, cost, and output/productivity
4) services rendered, market share, and access

Answer 213

3) demand, cost, and output/productivity

Question 214

Under a capitated payment system, the risk sharing arrangements involve which parties?

1) insurers and patients
2) physicians and purchasers
3) hospitals and patients
4) hospitals and insurers

Answer 214

4) hospitals and insurers

Question 215

Which concept of profitability analysis listed below is correct?

1) internal rate of return (IRR) measures a project’s percentage of cash flow
2) net present value (NPV) is a profitability measure that uses discounted cash flow
3) project’s actual rate of return
4) profitability return rate (PRR) provides the most accurate measure

Answer 215

2) net present value (NPV) is a profitability measure that uses discounted cash flow

Question 216

Which of the following must be included when determining a capital project’s incremental cash flow?

1) opportunity costs
2) cash inflows
3) inflation
4) internal rate of return

Answer 216

1) opportunity costs

Question 217

The critical link that brings patients and providers together is:

1) marketing
2) advertising
3) strategic planning
4) external analysis

Answer 217

1) marketing

Question 218

The primary purpose of generally accepted accounting principles (GAAP) in healthcare settings is to:

1) provide regulators with increased access to high quality financial statements of organizations within their jurisdiction
2) ensure that financial information that is reported to outsiders is consistent across businesses and presented in a manner that facilitates interpretation and judgments
3) allow interested individuals a rapid means of collecting financial data about hospitals and managed care organizations
4) facilitate the training of accountants and other finance professionals in the fundamentals of hospital and health services accounting

Answer 218

2) ensure that financial information that is reported to outsiders is consistent across businesses and presented in a manner that facilitates interpretation and judgments

Question 219

In a healthcare organization, who has ultimate fiduciary responsibility?

1) chief financial officer
2) board of trustees
3) medical staff officers
4) senior management

Answer 219

2) board of trustees

Question 220

If a CEO wanted to look at a “snapshot” of the financial condition of the healthcare organization, he/she would review which of the following?

1) income statement
2) balance sheet
3) retained earnings statement
4) investment portfolio

Answer 220

2) balance sheet

Question 221

Where should charity care be shown in a healthcare organization’s financial statement?

1) in the balance sheet
2) in the statement of operations
3) in the statement of changes in net assets
4) in the notes to the financial statements

Answer 221

4) in the notes to the financial statements

Question 222

Which of the following is the best way to assign costs in responsibility management?

1) allow each department manager to be responsible for a different type of fixed cost
2) allow each department manager to choose the cost that he/she prefers to controls
3) assign costs to the department manager who is responsible for making decisions about those costs
4) assign costs equally to all managers thus allowing equal responsibility for costs

Answer 222

3) assign costs to the department manager who is responsible for making decisions about those costs

Question 223

You are planning to conduct an assessment of the utilization patterns in your organization’s emergency department over the past three years.
Which of the following techniques would be most appropriate?

1) strategic planning
2) trend analysis
3) situation analysis
4) survey research

Answer 223

2) trend analysis

Question 224

A manager who seeks input from others prior to making a decision is engaging in which leadership style?

1) autocratic
2) participative
3) democratic
4) laissez-faire

Answer 224

2) participative

Question 225

When a specialist within the organization provides a directive or states an opinion, there is recognition of that individual as an expert in the field. This is an example of what type of authority?

1) positional
2) functional
3) personal
4) charismatic

Answer 225

2) functional

Question 226

Which of the following is not an example of marketing function?

1) promoting the organization
2) convincing patients to select the organization
3) managing external relationships
4) reviewing organizational costs

Answer 226

4) reviewing organizational costs

Question 227

An organization’s long-term competitive position is substantially dependent on its credit rating. Which of the following is a direct benefit of an excellent credit rating?

1) increased market share
2) improved quality of clinical care
3) improved cost of capital
4) increase in community rating

Answer 227

3) improved cost of capital

Question 228

Which of the following is an output related performance measure?

1) provider productivity
2) board satisfaction
3) customer loyalty index
4) paid nursing hours

Answer 228

1) provider productivity

Question 229

The thrust of antitrust legislation as applied to the healthcare field is to:

1) contain costs
2) contain rising costs of independent single unit hospital
3) Monitor the scope of health services provided in a given area
4) protect the public’s economic interest

Answer 229

4) protect the public’s economic interest

Question 230

The primary function of an extended care unit is to provide:

1) post acute care services in a rehabilitation oriented environment
2) self-care facilities for ambulatory patients
3) additional facilities for geriatric cases
4) more intensive nursing care for critically ill patients

Answer 230

1) post acute care services in a rehabilitation oriented environment

Question 231

Which one of the following conditions must be met for human subjects to be used in a medical research program?

1) no suitable animal model exists for use instead of people
2) The research program has been approved by the medical staff
3) The research program has been approved by the governing authority
4) risk should be clearly explained in understandable language to each individual subject

Answer 231

4) risk should be clearly explained in understandable language to each individual subject

Question 232

Controlling the costs of Accounts Receivable is heavily affected by:

1) The Time or length of the payment cycle
2) The dollar amount of credit granted to individuals
3) The total dollar amount of receivables carried on the books
4) working capital management

Answer 232

1) The Time or length of the payment cycle

Question 233

Operational planning can be correctly defined as:

1) A function of establishing the annual budget by accumulating departmental information
2) The process by which short range objectives and actions are established and implemented in accordance with the strategic plan
3) an annual process of developing, evaluating, and implementing goals based on community needs
4) determining the major types of services offered based on profit margins

Answer 233

2) The process by which short range objectives and actions are established and implemented in accordance with the strategic plan

Question 234

Short range planning is enhanced if a strategic plan has been adopted because:

1) potential program can be eliminated easily if not part of the strategic plan
2) use of space has already been determined
3) A frame of reference is already in place
4) operational problems can be quickly resolved

Answer 234

3) A frame of reference is already in place

Question 235

In the field of healthcare services, which of the following trends has significantly increased the need to develop a more comprehensive and more systematic credentialing processes in healthcare facilities?

1) The increased number of independent health care practitioners
2) The expansion of governmental regulations covering the operation of healthcare facilities
3) The growth of a ambulatory healthcare services
4) The growth of liability of healthcare facilities for malpractice by health practitioners

Answer 235

4) The growth of liability of healthcare facilities for malpractice by health practitioners

Question 236

In a sound human resources program, the primary purpose of the job classification system is to:

1) develop position descriptions for employees
2) establish a total wage and salary administration program
3) rank jobs by kind and level of work performed
4) define an effective organizational structure

Answer 236

3) rank jobs by kind and level of work performed

Question 237

Which of the following statements best defines increased productivity?

1) an increase in productivity occurs when the number of units of service rendered in a given year increases over the number rendered in the previous year
2) an increase in productivity occurs when an increase occurs in the volume or number of units of service rendered
3) an increase in productivity occurs when a reduction occurs in the ratio of hours worked to the number of units of service rendered
4) an increase in productivity occurs when an increase occurs in the revenues from a given number of full-time equivalent employees

Answer 237

3) an increase in productivity occurs when a reduction occurs in the ratio of hours worked to the number of units of service rendered

Question 238

When third-party policies and programs impede the healthcare facility’s fiscal capacity to renovate and remodel its plant as routinely scheduled, the healthcare facility - to protect itself - should first:

1) Delay capital improvements until funds are available
2) reduce the level of operating services
3) limit the number of admissions from selected their party payment sources
4) resort to the regulatory agency to obtain a waiver

Answer 238

1) Delay capital improvements until funds are available

Question 239

The method referred to as “value analysis” is used in inventory control activities to:

1) make adequate substitutions for requisition items
2) reduce the quantity of items issued to the various departments
3) Reduce cost without impairing functional efficiency
4) Relate quantity and quality of items

Answer 239

3) Reduce cost without impairing functional efficiency

Question 240

Incident reports should be initiated by:

1) A member of the medical/professional staff or by any employee
2) any person with direct patient care responsibilities
3) The department director or supervisor
4) The risk manager/quality assurance Cordinator

Answer 240

1) A member of the medical/professional staff or by any employee

Question 241

The major purpose of a code of ethics for members of a healthcare executives association is to:

1) provide guidance to members in their own professional conducts
2) increase public understanding of the professional association
3) provide a framework for disciplining members were necessary
4) provide a framework for annually evaluating professional performance

Answer 241

1) provide guidance to members in their own professional conducts

Question 242

The volume that would be realized if each prospective consumer were to purchase a specified amount of a particular service during a defined future timeframe is called:

1) A sales forecast
2) a market forecast
3) operational capacity
4) market potential

Answer 242

4) market potential

Question 243

As an internal control method, the budget is most commonly used to:

1) allow managers to control expenditures in the current year and to justify increases in future budgets
2) provide feedback concerning operational expenditures to the governing authority and to allow management to satisfy the governing authority’s requirements of accountability
3) serve as a numerical specification of plans and to function as a standard of control against which results can be compared
4) allow management to monitor operational expenditures and to justify future request for decreased or increased expenditures to rate setting agencies

Answer 243

3) serve as a numerical specification of plans and to function as a standard of control against which results can be compared

Question 244

The most useful way for a healthcare organization to deal with outside regulatory and credentialing bodies is to:

1) identify opportunities to influence political outcomes
2) regularly maintain both formal and informal relationships with these agencies
3) deal with these agencies only in written form so as to have a clear paper trail for subsequent review and analysis
4) provide only the minimum amount of information required to comply with the regulations of the agency

Answer 244

2) regularly maintain both formal and informal relationships with these agencies

Question 245

The cultural climate of an organization affects its recruiting procedure because:

1) it reduces employee turnover absenteeism
2) organizations seek applicants whose attitudes, values, and goals are consistent with those of the organization
3) applicants who cannot support a given culture will be unwilling to work for that organization
4) applicants look only to organizations that portray a positive cultural climate

Answer 245

2) organizations seek applicants whose attitudes, values, and goals are consistent with those of the organization

Question 246

Accident rates among personnel continue to rise and are distributed among all departments. What would be your best initial action in finding a comprehensive solution to this problem?

1) form a safety committee of key personnel to review reports of all accidents and make recommendations for corrections
2) require each department head to analyze his/her department’s accidents in order to determine the causes
3) institute a safety education program by departments
4) recommend that the personnel committee formulate an effective accident prevention program

Answer 246

1) form a safety committee of key personnel to review reports of all accidents and make recommendations for corrections

Question 247

A successful healthcare organization usually has a unique and well articulated company philosophy that presents a clear picture of the organization’s objectives, norms, and values. Employees motivation to support this philosophy would be greatest when the company:

1) maintains a program that provides employees with a wide variety of social, cultural, and recreational activities
2) emphasizes financial rewards, including strong employee benefits
3) provides a training program that is well communicated, understood by employees and enforced by executive management
4) continues a major effort to articulate employee rights in such areas as grievances, affirmative action, and human rights issues

Answer 247

3) provides a training program that is well communicated, understood by employees and enforced by executive management

Question 248

The primary reason for the decision to move from a freestanding voluntary facility to an investor owned healthcare organization:

1) economy of scale
2) access to equity market
3) access to patients
4) improved visibility

Answer 248

2) access to equity market

Question 249

Most products and services enter a period of decline. Unless compelling reasons prevail, continuing a declining product or service is costly because:

1) increased turnover of personnel will occur
2) continuation will set an undesirable precedent concerned with maintaining the status quo
3) the program will consume a disproportionate amount of management time and delay the search for a replacement
4) the organization will be perceived as being insensitive to the marketplace

Answer 249

3) the program will consume a disproportionate amount of management time and delay the search for a replacement

Question 250

Memorial Hospital offers a screening test as a public service for $.50 per test. Variable cost per unit are $.32. Fixed cost are $43,200 per month for the department performing the test. It is the only test done by this special department. The break even point in tests is:

1) 240,000 tests
2) 172,000 tests
3) 135,000 tests
4) 86,400 tests

Answer 250

1) 240,000 tests

Question 251

A positive net present value indicates that the investment has a rate of return:

1) higher then the discount rate used in the calculation
2) lower than that discount rate used in the calculation
3) equal to the discount rate used in the calculation
4) equal to the accounting profit averaged over the life of the investment

Answer 251

1) higher then the discount rate used in the calculation

Question 252

The asset turnover ratio is useful in measuring managerial performance because it indicates the:

1) amount of resources required to generate a dollar of revenue
2) profitability per dollar of revenue
3) effectiveness of capital structure decisions
4) effective use of current assets

Answer 252

1) amount of resources required to generate a dollar of revenue

Question 253

Environmental changes including shifts in public attitudes, community, health needs, provider practices, and actions of competing institutions, may alter a healthcare institution’s direction. Healthcare executives could be forced to:

1) reduce levels of patient care to the level of payment received.
2) scrutinize all new ventures from a variety of perspectives including financial, environmental, ethical, and quality of care.
3) eliminate patient-care programs that do not pay for themselves.
4) place ceilings on those financial categories of patients to pay less than full operating costs.

Answer 253

2) scrutinize all new ventures from a variety of perspectives including financial, environmental, ethical, and quality of care.

Answer 2 is a provocative response and it is the most inclusive answer. It provides a variety of perspectives that must be considered when changing a healthcare institution’s direction.

Question 254

If the amount of charity care increased from one reporting period to the next, which of the following would occur?

1) Provision for bad debts would increase
2) Unrestricted net assets would increase
3) Unrestricted net assets would neither increase nor decrease
4) Unrestricted net assets would decrease

Answer 254

4) Unrestricted net assets would decrease