Questions 41-80

Question 1

Controlling the costs of accounts receivable is heavily affected by:

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

Answer 1

The time or length of the payment cycle.

Question 2

When a healthcare organization’s goal conflict with the stated position of a
professional society, the professional individual’s responsibility is to:
1. Make known the stance of the profession and reconcile the divergent
positions.
2. Enlist the support of professional colleagues to alter the organization’s
position.
3. Support the professional society’s position.
4. Support the organization’s position.

Answer 2

Make known the stance of the profession and reconcile the divergent
positions.

Question 3

At this time of restriction and complexity in the healthcare environment, the
process of strategic planning for the healthcare organization requires the organization to develop a plan that:
1. Responds to the healthcare needs of the community.
2. Meets the needs of its service area population.
3. Is coordinated with medical staff interests.
4. Gives high priority to marketing.

Answer 3

Responds to the healthcare needs of the community.

Question 4

In achieving the goals of an organization, the most important management
practice is:
1. Allowing the line managers to determine their own goals.
2. Applying goals uniformly at all organizational levels.
3. Holding operational-level meetings to compare objectives.
4. Establishing organizational objectives based on the goals of the
management teams.

Answer 4

2. Applying goals uniformly at all organizational levels.

Question 5

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

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

Answer 5

2. Timetables for activity completion.

Question 6

When data are scarce, the best method of forecasting is to use:

1. Computer-based simulation methods.
2. Time series analysis.
3. Econometric forecasting.
4. Qualitative techniques.

Answer 6

4. Qualitative techniques

Question 7

47. Operational planning can be correctly defined as:
48. A function of establishing the annual budget by accumulating departmental information.
49. The process by which short-range objectives and actions are established and implemented in accordance with the strategic plan.
50. An annual process of developing, evaluating and implementing goals based on community needs.
51. Determining the major types of services offered based on profit margins.

Answer 7

Determining the major types of services offered based on profit margins.

Question 8

Decisions concerning the development of alternative modes of service
delivery are generally made upon recommendations of:
1. The market research director to the CEO.
2. Community leaders to the CEO.
3. The CEO to the governing authority.
4. The medical/professional staff to the governing authority.

Answer 8

3. The CEO to the governing authority.

Question 9

One of the best ways to determine the total market size and the share of each competitor in that market is to:

1. Survey the opinions of the sales force or the medical/professional staff.
2. Survey a stratified sample of patients/clients.
3. Hire a consultant.
4. Estimate the production capacity of each competitor.

Answer 9

2. Survey a stratified sample of patients/clients.

Question 10

Short-range planning is enhanced if a strategic plan has been adopted
because:
1. Potential programs can be eliminated easily if not part of the strategic plan.
2. Use of space has already been determined.
3. A frame of reference is already in place.
4. Operational problems can be quickly resolved.

Answer 10

3. A frame of reference is already in place.

Question 11

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?

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

Answer 11

The growth of liability of healthcare facilities for malpractice by health practitioners.

Question 12

Which of the following activities can best help identify the most efficient
staffing patterns for a healthcare organization?
1. Periodic job-analysis to determine productivity levels.
2. Review of industry standards by region.
3. Desk audit of job descriptions.
4. Frequent on-site visits to work locations.

Answer 12

1. Periodic job-analysis to determine productivity levels.

Question 13

In a sound human resources program, the primary purpose of the job
classification system is to:
1. Develop position descriptions for employees.
2. Establish a total wage and salary administration program.
3. Rank jobs by kind and level of work performed.
4. Define an effective organizational structure.

Answer 13

3. Rank jobs by kind and level of work performed.

Question 14

Which of the following statements best defines increased productivity?

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

Answer 14

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

Question 15

55. 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?
56. Declining-balance depreciation.
57. Straight-line depreciation.
58. Price-level depreciation.
59. Sum of the years’ digits depreciation

Answer 15

3. Price-level depreciation.

Question 16

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:
1. Delay capital improvements until funds are available.
2. Reduce the level of operating services.
3. Limit the number of admissions from selected third-party payment sources.
4. Resort to the regulatory agency to obtain a waiver.
57.

Answer 16

1. Delay capital improvements until funds are available.

Question 17

The method referred to as value analysis is used in inventory control
activities to:
1. Make adequate substitutions for requisitioned items.
2. Reduce the quantity of items issued to the various departments.
3. Reduce cost without impairing functional efficiency.
4. Relate quantity and quality of items.

Answer 17

3. Reduce cost without impairing functional efficiency.

Question 18

When a computer system is being used for business records, confidentiality
is most effectively maintained by:
1. Periodic reviews by the internal auditor.
2. Monitoring the activities of those employees who operate computer
services.
3. Restricting access to the information system.
4. Restricting access to the computer area.

Answer 18

3. Restricting access to the information system.

Question 19

To evaluate changes in levels of revenue and expenses as a result of
changes occurring during the year, management can:
1.
Use a “step-down” method.
2.
Use the contribution margin approach to budgeting.
3.
Use the capital approach to budgeting.
4.
Project existing trends forward for one year.

Answer 19

Use the contribution margin approach to budgeting.

Question 20

Under generally accepted accounting standards, bad debts are reported as
a/an:
1. Operating expense.
2. Deduction from net revenue.
3. Contractual allowance.
4. Deduction from gross revenue.

Answer 20

1. Operating expense.

Question 21

A case-mix cost allocation system that identifies costs associated with final
(as opposed to intermediate) outputs provides:
1. Managers with more accurate information about true costs and thus improve their ability to control.
2. Managers with a systems device to deal with the problem of human resources allocation.
3. Auditors with a better understanding of the financial status of the institution in a relationship to agreed-upon goals and objective.
4. Governing authorities with better insight into the future growth and development of healthcare facilities.

Answer 21

1. Managers with more accurate information about true costs and thus improve their ability to control.

Question 22

Formation of a sound inventory control system depends upon:

1. Aging by item according to first-in/first-out protocols.
2. Meeting demand and maximizing turnover.
3. Maintaining sound fiscal controls based on utilization.
4. Meeting demand and minimizing inventory cost.

Answer 22

4. Meeting demand and minimizing inventory cost.

Question 23

A management information system task force to plan for system design and
implementation should, first of all, include:
1. Medical records, financial management, nursing service.
2. Managers of appropriate healthcare organization departments.
3. Information systems consultant, CEO, financial management.
4. Governing authority, medical staff, nursing service.

Answer 23

2. Managers of appropriate healthcare organization departments.

Question 24

Because quality of care is a primary concern, an effective information
system must include:
1.
Objective and subjective reporting methods, incorporating peer
judgments about patient care.
2.
Preparation and evaluation of statistical and financial reports, on a
regular basis.
3. Weekly reports regarding census data and cost per occupied bed.
4. A monthly comparison of actual expenses to budgeted expenses on a
line-item basis.

Answer 24

Objective and subjective reporting methods, incorporating peer
judgments about patient care.

Question 25

The sole purpose of the medical/professional staff organization is to: 1. Meet accreditation standards. 2. Review the standards of patient care. 3. Review the credentials of physicians applying for membership. 4. Safeguard patient safety.

Answer 25

4. Safeguard patient safety.

Question 26

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 coordinator.

Answer 26

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

Question 27

The establishment of an appropriate credentialing procedure for members of the medical/professional staff should ultimately be a decision of the: 1. Entire medical/professional staff. 2. Credentials committee. 3. Governing authority. 4. Medical/professional executive committee

Answer 27

Governing Authority

Question 28

The governing authority of a healthcare facility can terminate the privileges of any member of the medical/professional staff: 1. At any time, if it follows its own adopted procedures. 2. At any time, with or without due process. 3. Only if termination is recommended by the medical/professional executive committee. 4. Only if termination is recommended by the medical/professional staff.

Answer 28

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

Question 29

It is important for the CEO of a healthcare organization to represent the the organization at state and regional associations and to other organizations in the community because: 1. The organization’s spokesman is the person who is most knowledgeable about the organization. 2. The CEO can use the opportunity to explore external threats to the organization. 3. These activities develop exchange relationships and are therefore crucial to the organization. 4. Consumer surveys indicate that, within the community, the CEO is the most visible spokesman for the organization.

Answer 29

3. These activities develop exchange relationships and are therefore crucial to the organization.

Question 30

``` What population factor is currently having the greatest impact on healthcare organization? 1. Ethnic composition. 2. Economic status. 3. Geographic distribution. 4. Age cohort. ```

Answer 30

Age Cohort

Question 31

To work effectively with the media, healthcare executives must: 1. Be accessible at all times to the media. 2. Increase their knowledge of and sensitivity to the media’s function. 3. Employ a public relations officer to control the release of all information. 4. Issue press releases on a timely basis.

Answer 31

2. Increase their knowledge of and sensitivity to the media’s function. 4. Issue press releases on a timely basis.

Question 32

CEO compensation should be based on: 1. the compensation arrangements with the prior CEO. 2. executive compensation in local corporations with similar gross revenues. 3. present salary plus cost-of-living adjustment. 4. what the institution would have to pay for a similarly prepared person if that person were employed elsewhere.

Answer 32

what the institution would have to pay for a similarly prepared person if that person were employed elsewhere.

Question 33

An essential function of the governing board is to: 1. approve the mission, vision and long-range plan. 2. focus on strategic planning. 3. prepare the operating plan. 4. review performance of departmental activities.

Answer 33

approve the mission, vision and long-range plan.

Question 34

The key to enhancing board effectiveness is: 1. getting the right people to serve on the board. 2. supporting and selecting the right CEO. 3. orienting and training the CEO. 4. organizing the board’s work.

Answer 34

4. organizing the board’s work.

Question 35

Members of the medical staff are eligible for full membership on the governing board in the same manner as other individuals: 1. when not legally prohibited. 2. when they do not actively practice in the organization. 3. when they are not full-time employees. 4. if they are not foreign nationals.

Answer 35

1. when not legally prohibited.

Question 36

The chief executive officer: 1. is a member of the board. 2. represents the board internally and externally. 3. is not a member of the board 4. has a contract with the board.

Answer 36

represents the board internally and externally.

Question 37

Regarding the budget, the board: 1. does not use the budget exercise as a way to improve quality and productivity. 2. gets involved in preparing budgets for all operational units. 3. decides which personnel are needed in top management. 4. establishes guidelines and makes final choices among competing opportunities.

Answer 37

establishes guidelines and makes final choices among competing opportunities.

Question 38

The individual or group responsible for establishing policy, maintaining quality of care and providing for institutional management planning is the: 1. chief operating officer. 2. medical staff executive committee. 3. governing body. 4. chief executive officer.

Answer 38

Governing Body

Question 39

A correct statement regarding trustees serving as fiduciaries is that they can: 1. be indicted for alleged theft of facility funds and the improper expenditure of facility funds for personal reasons. 2. be released from responsibility by giving the audit committee final authority in high-risk areas of financial matters, without any action by the whole board. 3. be held personally liable for wrongful acts or omissions by corporate officers or co-trustees by virtue of their position as trustees. 4. waive their fiduciary responsibility as a community organization.

Answer 39

be indicted for alleged theft of facility funds and the improper expenditure of facility funds for personal reasons.

Question 40

``` Ultimate responsibility for the mission statement rests with the: 1. CEO and medical staff. 2. governing board. 3. community and CEO. 4. chief executive. ```

Answer 40

governing board.