Practice Quiz 3 Flashcards
One way that healthcare executives can avoid or minimize the negative implications of conflict of interest is to
Make the conflict known to those in superior positions.
The principles of quality improvement require that healthcare executives change their management philosophy from:
finding fault with employees to finding problems in processes.
What type of problem arises when a healthcare executive knowingly allows the organization to continue double billing?
An actual conflict of interest, even absent a direct economic benefit to the healthcare executive.
A unit of measure commonly used to determine physicians’ clinical productivity
RVU
Third-party reimbursement methods provides the largest financial incentive for the provider to reduce cost
Prospective payment
Statements of earnings, financial positions, changes in financial position and retained earnings are required to be submitted yearly by all:
Publicly owned healthcare organizations.
Example of a capital expenditure
A building with a useful life of 20 years
Correct order of stages for accomplishing organization change:
Identifying
Planning
Implementation
Evaluation
Boards make better strategic decisions if they use information that is
focused on measurable outcomes of service quality and economic vitality.
The central role of the health services organization board includes all of the following
Support in managing important service programs or departments
The first role of the governing body is to
Set objectives and develop policy to guide the organization in achieving its mission
Internal members of the healthcare organization’s governing body
Often include the CEO, medical director, and CFO
In assessing the advantage of using a focus group over a survey in evaluating a program, one could say that focus groups
Are more useful in designing improvements to a program.
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
Heterogeneity
What purpose do market plans fulfill for the healthcare organization
Provide specific objectives for utilization attainment the next fiscal year.
The five major functions of marketing are:
Identifying markets, Promoting the organization, Managing external relationship, Convincing patients to select the organization, Attracting capable workers.
Forecasting organizational need for Human Resources by focusing on specific position openings that are likely to occur and using these planning is called:
Demand-pull approach
A health services organization should use the following sequential processes to help establish Human Resources (HR) objectives and policies
Analyze the current HR situation,
Forecast HR demand,
Reconcile with the budget,
Forecast HR supply.
Probability models that forecast the internal flow of employees from one job category to another use a:
Transition matrix
Forecasting the internal supply of employees as they move from their current jobs into others through promotions, lateral moves and terminations is called:
Supply-push approach
The conflict management strategy that would have the most immediate effect on reducing conflict behavior?
Imposition of formal authority to resolve or suppress conflict.
Multi-rater assessment (360 degrees feedback) of managers in healthcare organization is best used:
In the development of a specific action plan by appraises.
Behaviorally anchored rating scales (BARS) for specific jobs can be:
Used to identify components of job behaviors.
If the amount of charity care increases from one reporting period to the next
Unrestricted net assets would decrease
Which would be a reasonable basis on which to allocate administrative overhead costs
Amount of supplies used.
The effective cost of debt is roughly the same for both not-for-profit and investor-owned organizations because:
The tax deductibility of interest for investor-owned firms offsets the lower coupon rate on tax-exempt debt.
The master site plan (or master facility plan) for a healthcare organization:
Describes future facility needs (either renovation or new construction) necessary to meet strategic and operational needs.
Statistics budget
Provides input date for other budgets.
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?
Patient care areas
The best way to reduce/contain the costs of distributing supplies throughout an organIzation is to:
Minimize the number of times an item is handled from the time it is received by the organization to the time it is used.
The objective of maintenance and repair services is to keep the facility and its equipment operating like new. This goal is best achieved by emphasizing
Prevention
The facility’s plan for a healthcare organization may include plans for renovation or new construction, energy requirements, acquisition of new property, financing options, etc. However, the facility plan begins with an estimate of each service or department’s
Operational needs
An important management principle that should guide the development of information systems in healthcare organization is to
Treat information as an essential organizational resource.
A major priority for system development in the managed care environment
Development of operational inpatient systems
The best source of information to help a healthcare organization improve its existing service
Weekly meetings with staff members to determine organizational deficiencies.
An asset
Property
Plant
Equipment
Statement about short-term debt reduces liquidity
Increased use of short-term debt reduces liquidity.
Likely to provide useful information for evaluating the profitability of a hospitals managed care business
Changes
A master patient index (MPI) can best be described as
A relational database containing all identification numbers assigned to patients.
A typical use of the Internet by healthcare organizations is to
Advertise services available to the community
Best way to facilitate information system integration within a healthcare organization is to
Standardize data definitions and data structures
Developing technology that will help control unauthorized access to computerized information
Biometric access control devices
In negotiating a contract for an information system, healthcare organization’s should
Form a negotiating team and utilize legal counsel.
Most important factor to consider in evaluating vendor software packages
Ability of the software to interface with existing systems
The CIO for a healthcare organization is typically responsible for
Information systems and telecommunications
In selecting an information systems, a consultant can best be used to
Provide technical information and an outside prospective
The Information Systems Steering Committee for a healthcare organization should perform
Information systems planning,
Selection of software and
development of related organizational policies.
Primary functions of the information services department
Ensuring the integrity, quality, and security;
Archiving and retrieving data;
Training and supporting users.
Information system departments utilize the following methods to ensure confidentiality
Issue security codes and limit access to the system
Who has the primary responsibility to assure and maintain the integrity and security of electronic data in a healthcare organization
The Information Services Department
An efficient Formulary and Therapeutics Committee in many hospitals evaluates
Symptoms of adverse reactions;
Contraindications;
Specific drug in terms of appropriateness to caseload
Healthcare organizations often utilize special purpose software which allows rapid access to large archives of integrated data to assist management with decision making. This is referred to as
Executive decision support system
The most common cause of adverse drug events (ADEs)
Lack of knowledge of drug
The primary advantage of the corporate form of organization for a healthcare provider
It has limited liability
Law of tradition have established basic criteria for healthcare governing boards. One criteria is that:
The actions of the board are reasonable and prudent
Continuous quality improvement assumes that
There is no upper limit to excellence
Which beat describes the responsibility of a hospital with an emergency department (ED) when a person comes to the ED for Examination or treatment?
The hospital must provide an appropriate medical screening to determine whether an emergency condition exists and, if so, stabilize the condition.
First major law to have a significant impact on individual privacy in the workplace?
Civil Rights Act
How does physician self-referral or Stark Laws apply to Medicare payments?
The law prohibits a provider from presenting a claim to Medicare or to any person or other entity for a prohibited DHS referral.
A advantage of an effective Corporate Compliance Program for a healthcare organization.
Initiating immediate and appropriate corrective action;
Developing processes to allow employees to report potential problems;
Identifying and preventing criminal and unethical conduct.
A privilege of confidentiality exists in a physician-patient relationship when the physician-acquired information is
Related to the care and treatment of the patient
Participating providers in the federal Medicare program must
Meet the conditions of participation
Physician organization responsible for accrediting residency training program
ACGME
Important aspects to consider when establishing a joint venture
Joint ventures involve capital investment by all parties, can be difficult to dissolve, and are usually expected to be permanent.
A balance scorecard is a set of performance measurements used to
Ensure the organization does not exceed one performance metric at the expense of another
Maslow’s Hierarchy of Needs from correct order from bottom to top
Physiological, safety, belonging, esteem, self-actualization
Communication Health Intranet Network (CHINs) were developed for what purpose?
To provide a community-based hub for sharing health information.
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?
Bureaucratic
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?
White
A limitation which would cause a hospital OB unit to see no change in volume over a four year period?
Market
According to CMS Conditions of Participation, under what circumstances, is it permissible to deny a patient access to his or her medical record?
The information requested consists of psychotherapy notes.
The overall goal of the HIPAA Act of 1996 is
Improve portability and continuity of health insurance, combat fraud
Congress enacted Stark II to prohibit which of the following?
A physician or an immediate family member from referring a patient to an entity with which they have a financial relationship.
Which of the following activities should be performed by the Board of Directors?
Hiring the CEO
Performance improvement teams should consist of
Members from the involved Microsystems
The four important aspects of clinical support services are technical quality, patient satisfaction, continuity or integration, and
Appropriateness
A bar chart format, with the items rank ordered on a dependent variable, such as cost, profit, or satisfaction the Examines the components of a problem in terms of their contribution to it is known as
Pareto analysis
Governing boards are typically more effective at what size?
10 to 15 members
What type of review involves evaluation of management staff by their superiors, subordinates, and internal and external customers?
360-degree review
The role of a not-for-profit healthcare organization’s governing board includes
Deliberate clinical privileges;
Ensuring that quality healthcare is delivered;
Setting broad institutional policy.
Medicare Conditions of Participation for hospitals require that a prescribing practitioner authenticate a verbal order within _____, if not defined by the state.
48 hours
Cost accounting is an important tool which enables the CFO to
Determine the actual cost of providing patient care.
What is true about the relationship between acute care hospitals and long-term care organization?
Hospitals and patients frequently have difficulty arranging for nursing home care services.
The first step in any strategic management scenario planning is to
Gather information from as many sources as possible
The least serious limitation to decision analysis
The statistical model
In a unionized organization, what is the most effective contract dispute resolution finalization alternative?
Arbitration
Liquidity ratio measure
A firms ability to meet its current obligations in a timely manner.
The real value of financial statements lies in the fact they can be used to help
Predict the firm’s future financial condition.
Facing struggles such as declining profit margins, nonprofit healthcare organizations have become more dependent on what source for financing capital needs?
Philanthropy
You work for a county organization that has decided to issue bonds to find a new building. What type of bond would be sold on behalf of your organization?
Municipal bond
On a balance sheet, what does the difference between total current assets and total current liabilities indicate?
Net working capital
How should supervisors behave toward informal leaders in the organization?
Maintain a positive attitude toward informal leaders.
Budgets for new capital expenditures include requests for
Infrastructure
The Capital Asset Pricing Model (CAPM), an equilibrium model, describes the relationship between which of the following?
Market risk and required rate of return
What is the most common operating indicator used to measure overall staff productivity?
Full-time equivalent per adjusted averaged daily census.
Determining whether the help desk function is effective and whether projects are well managed are examples of measuring an information system department’s
Operational competency
When seeking information about fixed assets, payroll, regulatory and tax reporting, and accounts payable, an administrator will access what information management system?
General financial management
The main role of the board is
Setting institutional policy
Part of the labor budget
Staff salaries
Hourly wages
Employee benefits
Health Savings Accountable (HSAs) we’re established through which law?
Medicare Prescription Drug Improvement and Modernization Act
The only law that mandates a particular type of payment for time not worked.
FMLA
Which position is included in the NRLB Bargaining rules
Pharmacists
One method for evaluating relative value of different jobs is
Benchmarking
When discharging a patient from a hospital, the institution can be held liable
For abandoning the patient if the patient is in need of further medical care
Under the Emergency Medical Treatment and Active Labor Act (EMTALA)
Originated due to concerns of patient dumping
Which of the following health maintenance organization models exert maximum control over physician providers?
Closed panel
What is generally prohibited by Stark II Laws
A physician referring a patient to a service owned by the physician.
Under HIPAA, Congress required the Secretary of HHS to adopt standards to:
Provide for standard data elements and code sets.
Which is the Shewhart process for performance improvement?
Plan, do, check, act.
Which of the following are parts of the dimensions of the strategic balanced scorecard?
Financial performance
The CEO of a 125-bed hospital realizes that her hospital is surrounded by three similar institutions and determines that her institution has no competitive advantage. Which strategy should she pursue?
Prioritize market segments and heavily promote to key groups.
If the average daily census on 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 the productive core staffing?
24
What in the revenue cycle process is a major impediment to prompt payment?
Claim denial
When evaluating capital budgeting performance, what is the best indicator of operating leverage?
Expense ratio
An analysis of proposed capital investment includes
Cost of capital
Cash flow projections
Risk assessment
Revenue cycle billing management typically includes what broad activities
Activities before services are rendered, activities that occur simultaneously with the service and activities after services are rendered.
Who gives final approval of the medical staff bylaws?
The board
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?
Probate court
To guard against the loss of assets, an administrator should
Implement detailed procedures, risk control and annual outside audits.
A food service director is assigned responsibility for environmental services. This is an example of
Matrix management
Which of the following management styles allows the highest subordinate freedom and lowest personal authority?
Laissez-faire
Under the regulations of the IRS, a tax exempt entity
Must provide a public benefit to the community
Network of hospitals, physicians and other healthcare providers that provide services for a negotiated fee are called
PPOs
The practice of a provider seeing a patient more often than is medically necessary, primarily to increase revenue through an increased number of services, is called
Churning
Regulations exempted self-funded employer-sponsored health insurance plans from state insurance regulation
ERISA
Hospitals that were acquired by hospital systems generally have which characteristic
They incur higher debt levels
Hospitals known for their ability to attract and retain nurses despite the significant nursing shortages are called
Magnet hospitals
The reimbursement method that was first adopted by Medicare and later by most third party payers is known as
DRG
The principal goal of a Health Service Organization’s medical/hospital model is
Disease treatment
Which segment of the healthcare delivery system is exclusively dedicated to terminally ill patients
Hospice programs
Emerging physician organizations are usually private, for-profit corporations. In order to gain not-for-profit status, such organizations must
Have a community-dominated board of governance
Key responsibility of the governing board
Recruit and select the CEO
Which of the following networks is intended to reduce costs and improve quality by giving access to financial, clinical and administrative information
Community health information networks (CHIN)
When introducing a new information technology system to a healthcare organization, resistance can be effectively addressed by
Focusing on the system users and being responsive to their needs
A discrete measure in continuous improvement
Gender
The qui tam provision of the federal False Claim Act is a statute aimed at those who commit fraud against the government
Allows any citizen to bring suit in the name of the United States
Which of the following activities is illegal for tax-exempt health organizations
Endorsing a candidate for public office
The status of health organizations under antitrust law
They are subject to antitrust law, just as any other industry is.
The legal status of the physician-patient relationship
It is based on an expressed or implied contract, from which certain elements of duty arise.
A major advantage of capitation for primary care gatekeepers is it
Encourages primary care physicians to be more judicious in their referrals to specialist.
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
Promoting efforts to collaborate and integrate efforts to provide more efficient
care.
A healthcare executive is serving on the board of a community mental health center. The mental health center board is evaluating proposals for inpatient psychiatric services. Proposals were received from the executive’s facility and several other facilities. The healthcare executive should:
Participate in the discussion but not vote on the proposals.
Primary reason for conducting continuing education for staff
It is a long-term commitment to the patient.
The first effect of demographic trends on a health services organization’s strategic planning process
Determining the range and types of services to be offered.
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:
Occur in any health service organization.
The primary stimuli that causes educational programs to be made available to and required of staff are the
Demands and expectations of stakeholders.
Research in behavioral science has consistently found that once basic needs
are met, staff is motivated most
By factors such as being kept informed.
Resource allocation in health services organizations involves balancing the
needs of organization, staff, and patients. However, the essential primary focus on patients can be met only if the
Basic needs of the organization and staff are addressed first.
Which of the following best describes a healthcare organization’s recognized service reputation that has been earned over the long-term within its market
Brand equity
Which technique would provide the most beneficial information to a healthcare organization about customer satisfaction
Direct mail surveys
You have been assigned to develop a marketing strategy for your organization. The most important issue to consider is that the marketing strategy be
Customer-centered
The first stage in the strategic planning process
Situation analysis
Analyses used for workforce planning and
forecasting
Ratio analysis
Which techniques would play a central role in an organization being able to demonstrate equal employment compliance
A job analysis procedure
An organization has made a commitment to begin training its employees to fill anticipated job openings in upcoming years. This is an example of
Succession planning
Example of direct costs
Drug prescriptions
Healthcare organizations require the filing of annual disclosure statements on the part of board members and officers. This policy is intended to address
Inurement
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
Long-range facility plan
Information systems management security is concerned with the policies and procedures for ensuring the security of
Data
A patient files a complaint relating to a negative hospital experience. The proper handling of this patient’s complaint is to
Clarify the problem
The single most important way patients can help prevent medical errors from affecting them is to:
Interact with their caregivers
A critical pathway is best described as
A document that focuses on efficiency and describes a standard set of activities to be performed for a defined category of patients.
One reason healthcare entities should document their credentialing procedures is to
Minimize inconsistency and liability
One feature that distinguishes nonintegrated healthcare organizations from integrated organizations is a
Define market image
Hospitals pursuing strategic alliances are faced with issues of vertical integration. One example of vertical integration is
Acquiring a long-term care facility
Governance challenges faced by fully integrated healthcare delivery systems are more complex than those faced by nonasset merged multihospital systems because
The components of integrated systems function in a highly interdependent
manner
The purpose of the ACHE Ethics Committee is to review and recommend action on ethical violations to which group
Board of Governors
According to the ACHE Code of Ethics, what action can the Ethics Committee take against an affiliate after a grievance procedure has been initiated?
Recommend expulsion of the affiliate
ACHE’s Ethical Policy Statement on Ethical Issues Related to Downsizing recommends that healthcare executives should consider providing which of the following when downsizing
Out-placement assistance
ACHE’s Ethical Policy Statement in Creating an Ethical Environment for Employees, the organization should
Create a working environment that provides freedom from coercion
The three basic categories of quantitative performance measures used in conventional accounting systems
Demand, cost, and output/productivity
Under a capitated payment system, the risk sharing arrangements involve which parties
Hospitals and insurers
Concept of profitability analysis
Net Present Value (NPV) is a profitability measure that uses discounted cash flow
Must be included when determining a capital project’s incremental cash flow
Opportunity costs
Critical link that brings patients and providers together
Marketing
Concept of demand management consists of
Concurrent review
The primary purpose of generally accepted accounting principles (GAA) in healthcare settings is to
Ensure that financial information that is reported to outsiders is consistent across businesses and presented in a manner that facilitates interpretation and judgments
The internal rate of return measures the
Discount rate at which the net present value is zero
The Statement of Cash Flows is typically organized into three sections: Cash Flow From Operations; Cash Flow From Investing Activities; and Cash Flow From
Financing Activities
Combines data from a balance sheet and an income statement to create a single number that facilitates easy interpretation
Financial ratio analysis
Who has ultimate fiduciary responsibility
Board of Directors
Medicare DRG payment is highly dependent upon a hospital’s case mix index. This index represents the average relative weight for all Medicare patients treated in a
Specific period
If a CEO wanted to look at a “snapshot” of the financial condition of the healthcare organization, he/she would review the
Balance Sheet
Where should charity care be shown in a healthcare organization’s financial statement
In the notes to the financial statements
The best way to assign costs in responsibility management
Assign costs to the department manager who is responsible for making decisions
about those costs
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
Trend Analysis
A manager who seeks input from others prior to making a decision is engaging in which leadership style
Participative
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
Functional
An example of marketing function
Promoting the organization
Convincing patients to select the organization
Managing external relationships
The arrival of women for obstetrical deliveries or patient flow in an emergency department can best be analyzed through the use of which technique
Stochastic Modeling
One approach for measuring technical quality of clinical support services is
Process review
Which financial statement is updated daily to reflect changes in assets or composition of financing
The balance sheet
An organization’s long-term competitive position is substantially dependent on its credit rating. Which of the following is a direct benefit of an excellent credit rating
Improved cost of capital
The applicability of continuous improvement in healthcare organizations assumes
An organizational commitment
An output-related performance measure
Provider productivity
The thrust of antitrust legislation as applied to the healthcare field is to
Protect the public’s economic interest
The primary function of an extended-care unit is to provide
Post-acute care services in a rehabilitation oriented environment
Essential components of strategic planning
The corporate mission statement
Competitive analysis
Assessment of the external environment
Which one of the following conditions must be met for human subjects to be
used in a medical research program
Risk should be clearly explained in understandable language to each individual
subject
Controlling the costs of accounts receivable is heavily affected by
The time or length of the payment cycle
Operational planning can defined as
The process by which short-range objectives and actions are established and implemented in accordance with the strategic plan
Short-range planning is enhanced if a strategic plan has been adopted
because
A frame of reference is already in place
In the field of healthcare services, which of the following trends has significantly increased the need to develop more comprehensive and more systematic credentialing processes in healthcare facilities
The growth of liability of healthcare facilities for malpractice by health practitioners
In a sound human resources program, the primary purpose of the job classification system is to
Rank jobs by kind and level of work performed
Best defines increased productivity
An increase in productivity occurs when a reduction occurs in the ratio of hours worked to the number of units of service rendered
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
Price-level depreciation
When third-party policies and programs impede the healthcare facility’s fiscal capacity to renovate and model its plant as routinely scheduled, the healthcare facility—to protect itself—should first
Delay capital improvements until funds are available
The method referred to as value analysis is used in inventory control
activities to
Reduce cost without impairing functional efficiency
Under generally accepted accounting standards, bad debts are reported as
a/an
Operating expense.
Incident reports should be initiated by
A member of the medical/professional staff or by any employee
The governing authority of a healthcare facility can terminate the privileges of any member of the medical/professional staff
At any time, if it follows its own adopted procedures
Materials management can best be defined as a system of effective
Allocation of materials
When facility maintenance is deferred, which of the following outcomes is predictable
Higher costs
The major purpose of a code of ethics for members of a healthcare executives association is to
Provide guidance to members in their own professional conducts
The volume that would be realized if each prospective consumer were to purchase a specified amount of a particular service during a defined future time frame is called:
Market potential
As an internal control method, a budget is most commonly used to
Serve as a numerical specification of plans and to function as a standard of control against which results can be compared
The most useful way for a healthcare organization to deal with outside regulatory and credentialing bodies is to
Regularly maintain both formal and informal relationships with these agencies
The cultural climate of an organization affects its recruiting procedure because
Organizations seek applicants whose attitudes, values and goals are consistent
with those of the organization
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?
Form a safety committee of key personnel to review reports of all accidents and make recommendations for corrections
If a physician abuses a patient in the healthcare organization, initial corrective action should be taken by the:
Chief of services (department chairman)
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. Employee motivation to support this philosophy would be greatest when the company
Provides a training program that is well communicated, understood by employees and enforced by executive management
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
Cash, marketable securities and accounts receivable to current liabilities
The primary reason for the decision to move from a freestanding voluntary facility to an investor-owned healthcare organization
Access to the equity market
Most products and services enter a period of decline. Unless compelling reasons prevail, continuing a declining product or service is costly because
The program will consume a disproportionate amount of management time and delay the search for a replacement
After a marketing research problem has been identified, the researcher’s next step is to
Specify information needs
Which of the following statements is in accordance with the principle of delegation
In applying the principle of delegation, an executive makes relatively few decisions personally and frames orders in broad general terms
Before submission of the annual business plan to the governing authority, the plan should be developed by
Key executives, after receiving recommendations from the head of operating
divisions
Memorial Hospital offers a screening test as a public service for $0.50 per test. Variable costs per unit are $0.32. Fixed costs 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:
240,000 tests
A positive net present value indicates that the investment has a rate of return
Higher than the discount rate used in the calculation
The asset turnover ratio is useful in measuring managerial performance because it indicates the:
Amount of resources required to generate a dollar of revenue
