FACHE BOG Exam Flashcards

0
Q

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.

A

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.

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1
Q

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.

A

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.

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2
Q

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.

A

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.

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3
Q

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

A

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.

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4
Q

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.

A

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.

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5
Q

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.

A

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.

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6
Q

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.

A

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.

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7
Q

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.

A

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.

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8
Q

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.

A

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.

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9
Q

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

A

C. Support in managing important service programs or departments

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10
Q

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
A
  1. Set objectives and develop policy to guide the organization in achieving its mission
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11
Q

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
A
  1. Often include the CEO, medical director and CFO
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12
Q

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
A
  1. Make the conflict known to those in superior positions
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13
Q

Statements of earnings, 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
A
  1. Publicly owned healthcare organizations
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14
Q

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
A
  1. A building with a useful life of 20 years
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15
Q

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
A
  1. Support in managing important service programs or departments
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16
Q

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
A

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

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17
Q

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
A
  1. Demand pull approach
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18
Q

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
A
  1. Analyze the current HR situation, forecast HR demand, reconcile with the budget, forecast HR supply
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19
Q

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
A

B. Supply push approach

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20
Q

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
A
  1. Imposition of formal authority to resolve or suppress conflict
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21
Q

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

  1. In the development of a specific action plan by appraiser
  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
A
  1. In the development of a specific action plan by appraiser
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22
Q

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
A
  1. It provides input data for other budgets
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23
Q

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
A
  1. Amount of supplies used
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24
Q

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
A
  1. Development of operational inpatient systems
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25
Q

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
A
  1. . Weekly meetings with staff members to determine organizational deficiencies
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26
Q

Which of the following is likely to provide useful information for evaluating the profitability of the hospitals managed care business?

  1. Payor mix
  2. Fixed
  3. Contract terms
  4. Changes
A
  1. Changes
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27
Q

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
A
  1. Issue security codes and limit access to the system
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28
Q

Who has the primary responsibility to ensure 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
A
  1. The information services Department
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29
Q

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
A
  1. Joint ventures involve capital investments by all parties can be difficult to dissolve and are usually expected to be permanent
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30
Q

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
A
  1. Physiological safety belonging esteem self actualization
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31
Q

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
A
  1. To provide a community-based hub for sharing health information
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32
Q

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
A
  1. To improve portability and continuity of health insurance, combat fraud
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33
Q

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
A
  1. 48 hours
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34
Q

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
A
  1. Hospitals and patients frequently have difficulty arranging for nursing home care services
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35
Q

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
A
  1. The statistical model
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36
Q

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

  1. Mediation
  2. Corporate campaigns
  3. Arbitration
  4. Strike
A
  1. Arbitration
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37
Q

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
A
  1. Predict the firm’s future financial condition
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38
Q

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
A
  1. Philanthropy
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39
Q

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
A
  1. Municipal bond
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40
Q

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
A
  1. Net working capital
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41
Q

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
A
  1. Market risk and required rate of return
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42
Q

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
A
  1. Full-time equivalents per adjusted average daily census
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43
Q

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
A
  1. Contract staff expenses
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44
Q

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
A
  1. Expense ratio
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45
Q

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
A
  1. Liquidity ratio
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46
Q

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
A
  1. Activities before services are rendered activities that occur simultaneously with the services and activities after services are rendered
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47
Q

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

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

B. Disease treatment

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48
Q

The primary stimuli the 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
A
  1. Demands and expectations of stakeholders
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49
Q

Resource allocation and health services organizations involves balancing the needs of organizations 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
A
  1. Basic needs of the organization and staff are addressed first
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50
Q

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
A
  1. Brand equity
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51
Q

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
A
  1. Direct mail surveys
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52
Q

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
A
  1. Ratio analysis
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53
Q

Which of the following is an example of direct costs?

  1. Utility bills
  2. Parking operations
  3. Department service
  4. Drug prescriptions
A
  1. Drug prescriptions
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54
Q

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
A
  1. A document that focuses on efficiency and describes a standard set of activities to be performed for a defined category of patients
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55
Q

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
A
  1. Minimize inconsistency and liability
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56
Q

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
A
  1. Defined market image
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57
Q

Governance challenges faced by a fully integrated healthcare delivery system is more complex than those faced by a non-asset merged multi hospital system 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
A
  1. The components of integrated systems function in a highly interdependent manner
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58
Q

The concept of demand management consists of:

  1. Concurrent review
  2. Risk assessment
  3. Disease management
  4. Chart review
A
  1. Concurrent review
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59
Q

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
A
  1. Discount rate at which the net present value is zero
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60
Q

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
A
  1. Financing activities
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61
Q

Which of the following combines data from a balance sheet and 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
A
  1. Financial ratio analysis
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62
Q

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

  1. Specific nursing unit or specialty area
  2. Specific period
  3. Common geographic market
  4. Specific facility
A
  1. Specific period
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63
Q

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
A
  1. Stochastic modeling
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64
Q

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
A
  1. Appropriateness testing
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65
Q

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
A
  1. An organizational commitment
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66
Q

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
A
  1. Timetables for activity completion
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67
Q

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. Some of the years digits depreciation
A
  1. Price level depreciation
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68
Q

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
A
  1. Operating expense
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69
Q

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
A
  1. At any time, if it follows its own adopted procedures
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70
Q

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
A
  1. Allocation of materials
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71
Q

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
A
  1. Higher costs
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72
Q

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
A
  1. Chief of services (department chairman)
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73
Q

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
A
  1. Cash, marketable securities and accounts receivable to current liabilities
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74
Q

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
A
  1. Specify information needs
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75
Q

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 friends orders in broad general terms
A
  1. In applying the principle of delegation, an executive makes relatively few decisions personally and frames orders in broad general terms
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76
Q

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 the operating divisions
  4. The heads of the operating divisions, with the CEO collating
A
  1. Key executives, after receiving recommendations from the head of the operating divisions
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77
Q

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
A

B. The balance sheet

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78
Q

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
A
  1. Defined market image
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79
Q

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
A
  1. Executive decision support system
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80
Q

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
A
  1. Lack of drug knowledge
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81
Q

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
A
  1. Members from involved Microsystems
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82
Q

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

A

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.

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83
Q

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.

A

1) when criteria are established and known to both parties

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84
Q

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

A

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.

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85
Q

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.

A

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.

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86
Q

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

A

A) finding fault with employees to finding problems with processes

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87
Q

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

A

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

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88
Q
Which of the following is a unit of measure commonly used to determine physicians' clinical productivity?
A) RVU
B) CMS
C) IPO
D) CPU
A

A) RVU

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89
Q
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
A

C) Prospective payment

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90
Q

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

A

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

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91
Q

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

A

A) identifying, planning, implementation, evaluation

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92
Q

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

A

B) are more useful in designating improvements to a program

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93
Q
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
A

C) heterogeneity

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94
Q

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.

A

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

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95
Q

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

A

C) transition matrix

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96
Q

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

A

A) used to identify components of job behaviors

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97
Q

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

A

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

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98
Q

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

A

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

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99
Q

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

A

D) patient care areas

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100
Q

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

A

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

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101
Q

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

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

A

A) prevention

102
Q

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

A

A) operational needs

103
Q

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

A

A) treat information as an essential organizational resource

104
Q

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

A

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.

105
Q

The major purpose of the code of ethics for members of a healthcare executive’s association is to:

1) enhance the image of the healthcare management profession
2) set forth standards if ethical behavior for healthcare executives
3) set ethical guidelines for the advancement of members within the organization
4) provide a forum for dialogue on healthcare policy issues

A

2) set forth standards if ethical

Answer 2 is correct. A code of ethics sets guidelines and standards for behavior (not for advancement, as in answer 3). Answers 1 & 3 may happen as a result of having a code of ethics, but they are not the major purpose.

106
Q

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

A

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.

107
Q

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

A

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.

108
Q

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.

A

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

109
Q

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

A

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

110
Q

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

A

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.

111
Q

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

A

1) treat information as an essential organizational resource

112
Q

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

A

3) property, plant, and equipment

113
Q

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

A

1) increased use of short-term debt reduces liquidity

114
Q

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

A

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

115
Q

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

A

3) advertise services available to the community

116
Q

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

A

4) standardize data definitions and data structures

117
Q

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

A

2) biometric access control devices

118
Q

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

A

1) form a negotiating team and utilize legal counsel

119
Q

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

A

2) ability of the software to interface with existing systems

120
Q

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

A

4) information systems and telecommunications

121
Q

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

A

3) provide technical information and an outside perspective

122
Q

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 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

A

1) information system planning, selection of software, and development

123
Q

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

A

4) utilizing information for operational decision making

124
Q

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

A

2) Patients’ current medication effectiveness

125
Q

Health 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

A

4) executive decision support system

126
Q

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

A

2) lack of knowledge of drug

127
Q

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

A

4) it has limited liability

128
Q

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

A

3) the actions of the board are reasonable and prudent

129
Q

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

A

3) there is no upper limit to excellence

130
Q

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

A

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

131
Q

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

A

1) civil rights act

132
Q

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

A

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

133
Q

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

A

2) cost of implementation and operations

134
Q

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

A

3) related to the care and treatment of the patient

135
Q

Participating providers in the 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

A

3) meet the “conditions of participation”

136
Q

Which physician organization is responsible for accrediting residency training programs?

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

A

1) ACGME

137
Q

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

A

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

138
Q

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

A

1) Bureaucratic

139
Q

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

A

4) White

140
Q

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

A

2) market

141
Q

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

A

1) the information consists of psychotherapy notes

142
Q

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

A

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

143
Q

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

A

4) hiring the CEO

144
Q

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

A

3) appropriateness

145
Q

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

A

3) Pareto analysis

146
Q

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

A

1) 10-15 members

147
Q

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

A

2) 360 degree review

148
Q

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

A

3) overseeing day to day operations

149
Q

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

A

3) determine actual cost of providing patient care

150
Q

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

A

2) gather information from as many sources as possible

151
Q

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

A

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

152
Q

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

A

1) maintain a positive attitude toward informal leaders

153
Q

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

A

1) infrastructure

154
Q

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

A

4) operational competency

155
Q

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

A

4) general financial management

156
Q

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

A

3) setting institutional policy

157
Q

Health Savings Accounts (HCAs), 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

A

2) Medicare Prescription Drug Improvement and Modernization Act

158
Q

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

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

A

1) FMLA

159
Q

Which position is included in the NRLB Bargaining rules?

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

A

3) pharmacists

160
Q

One method for evaluating relative value of different jobs is:

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

A

4) benchmarking

161
Q

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

A

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

162
Q

Under 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

A

2) originated due to concerns of patient dumping

163
Q

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

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

A

1) closed panel

164
Q

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

A

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

165
Q

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

A

2) provide for standard data elements and code sets

166
Q

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

A

2) Plan, do, check, act

167
Q

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

A

1) financial performance

168
Q

The CEO of a 125 bed hospital realizes that her hospital is trying to buy 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.

A

2) prioritize market segments and heavily promote to keep groups

169
Q

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

A

1) 24

170
Q

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

A

4) claim denial

171
Q

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

A

1) the board

172
Q

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

A

4) probate court

173
Q

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

A

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

174
Q

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

A

2) Matrix management

175
Q

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

A

4) Laissez-faire

176
Q

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%

A

3) must provide a public benefit to the community

177
Q

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

A

3) PPOs

178
Q

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

A

4) ERISA

179
Q

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

A

4) churning

180
Q

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

A

2) they incur higher debt levels

181
Q

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

A

3) magnet hospitals

182
Q

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

A

4) DRG

183
Q

Which segment of healthcare delivery system it’s exclusively dedicated to terminally ill patients?

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

A

3) hospice programs

184
Q

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-dominates board of governance
3) create a partnership with a nonprofit hospital
4) minimize double taxation to members by passing proceeds directly to the members

A

2) have a community-dominates board of governance

185
Q

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

A

1) recruit and select the CEO

186
Q

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)

A

1) community health information network (CHIN)

187
Q

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

A

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

188
Q

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

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

A

1) gender

189
Q

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

A

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

190
Q

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

A

3) endorsing a candidate for public office

191
Q

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

A

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

192
Q

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

A

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

193
Q

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

A

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

194
Q

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

A

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

195
Q

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

A

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

196
Q

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

A

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

197
Q

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

A

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

198
Q

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

A

3) occur in any healthcare service organization

199
Q

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

A

3) by factors such as being kept informed

200
Q

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

A

2) customer centered

201
Q

What is the first stage in the strategic planning process?

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

A

2) situation analysis

202
Q

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

A

3) A job analysis procedure

203
Q

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

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

A

1) succession planning

204
Q

Healthcare organizations require the filling 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

A

1) inurement

205
Q

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

A

1) long-range facility plan

206
Q

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

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

A

1) data

207
Q

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

A

4) clarify the problem

208
Q

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

A

1) interact with their caregivers

209
Q

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

A

1) acquiring a long term care facility

210
Q

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

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

A

2) board of governors

211
Q

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

A

4) recommend expulsion of the affiliate

212
Q

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

A

4) out-placement assistance

213
Q

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

A

2) create a working environment that provides freedom from coercion

214
Q

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

A

3) demand, cost, and output/productivity

215
Q

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

A

4) hospitals and insurers

216
Q

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

A

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

217
Q

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

A

1) opportunity costs

218
Q

The critical link that brings patients and providers together is:

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

A

1) marketing

219
Q

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

A

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

220
Q

In a healthcare organization, who has ultimate fiduciary responsibility?

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

A

2) board of trustees

221
Q

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

A

2) balance sheet

222
Q

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

A

4) in the notes to the financial statements

223
Q

Which of the following is the best way to assign cost 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

A

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

224
Q

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

A

2) trend analysis

225
Q

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

A

2) participative

226
Q

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

A

2) functional

227
Q

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

A

4) reviewing organizational costs

228
Q

An organization’s long-term competitive position is substantially depended 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

A

3) improved cost of capital

229
Q

Which of the following is an output related performance measure?

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

A

1) provider productivity

230
Q

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

A

4) protect the public’s economic interest

231
Q

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

A

1) post acute care services in a rehabilitation oriented environment

232
Q

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

A

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

233
Q

Controlling the cost of Accounts Receivable is heavily affected by:

1) The Time for 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

A

1) The Time for length of the payment cycle

234
Q

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

A

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

235
Q

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

A

3) A frame of reference is already in place

236
Q

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

A

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

237
Q

In a sound human resources crib and, the primary purpose of the job quest vacation 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

A

3) rank jobs by kind and level of work performed

238
Q

Which of the following statements best to find 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 of hours 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

A

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

239
Q

When third-party policies and programs impede the healthcare facilities physical capacity to renovate and model it’s 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

A

1) Delay capital improvements until funds are available

240
Q

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

A

3) Reduce cost without impairing functional efficiency

241
Q

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

A

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

242
Q

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

A

1) provide guidance to members in their own professional conducts

243
Q

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

A

4) market potential

244
Q

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

A

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

245
Q

The most useful way for a healthcare organization to deal with outside regulatory and credential long 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

A

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

246
Q

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

A

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

247
Q

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

A

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

248
Q

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 employers 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

A

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

249
Q

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

A

2) access to equity market

250
Q

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

A

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

251
Q

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

A

1) 240,000 tests

252
Q

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

A

1) higher then the discount rate used in the calculation

253
Q

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

A

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