,ACHE BOG / FACHE Practice Questions (130
MCQs) + Complete Solutions
Governance & Strategy
1) A hospital board wants better oversight of quality. Which structure is best?
A. Merge quality into fundraising committee
B. Create a standing Quality & Safety committee with defined metrics dashboard
C. Delegate quality entirely to the CMO without board reporting
D. Review quality only after sentinel events
Answer: B
Rationale: Boards are expected to provide continuous oversight using standardized metrics and
regular reporting, not reactive review.
2) The primary purpose of a mission statement is to:
A. Describe annual tactics
B. Define the organization’s reason for existence and guiding purpose
C. List quarterly financial targets
D. Replace strategic planning
Answer: B
Rationale: Mission clarifies why the organization exists; strategy translates mission into
goals/actions.
3) In a SWOT analysis, a new state regulation increasing compliance costs is a:
A. Strength
B. Weakness
C. Opportunity
D. Threat
Answer: D
Rationale: External factor that may harm performance = threat.
4) Best indicator a strategy is working in population health?
A. More admissions and longer LOS
B. Improved outcomes and lower avoidable utilization (e.g., readmissions)
C. Higher charge master rates
D. Increased ED boarding hours
Answer: B
Rationale: Population health focuses on outcomes and avoidable utilization, not volume.
, Healthcare Finance
5) Contribution margin is:
A. Revenue – fixed costs
B. Revenue – variable costs
C. Net income – taxes
D. Assets – liabilities
Answer: B
Rationale: Contribution margin shows what’s left to cover fixed costs and profit.
6) A project costs $2M and generates $600k/year net cash flow for 5 years. Best single metric
to account for time value of money?
A. Payback period
B. Net present value (NPV)
C. Average cost per case
D. Operating margin
Answer: B
Rationale: NPV discounts future cash flows and is preferred for capital decisions.
7) Days cash on hand measures:
A. Ability to cover operating expenses with available cash reserves
B. Total patient satisfaction
C. Staff turnover
D. Market share growth
Answer: A
Rationale: Liquidity measure: how long you can operate using cash/near-cash.
8) A hospital’s current ratio declines significantly. Most likely implication:
A. Improved liquidity
B. Worsened short-term ability to meet obligations
C. Higher long-term solvency
D. Lower accounts receivable
Answer: B
Rationale: Current ratio (current assets/current liabilities) indicates short-term liquidity.
Quality, Patient Safety, and Performance Improvement
MCQs) + Complete Solutions
Governance & Strategy
1) A hospital board wants better oversight of quality. Which structure is best?
A. Merge quality into fundraising committee
B. Create a standing Quality & Safety committee with defined metrics dashboard
C. Delegate quality entirely to the CMO without board reporting
D. Review quality only after sentinel events
Answer: B
Rationale: Boards are expected to provide continuous oversight using standardized metrics and
regular reporting, not reactive review.
2) The primary purpose of a mission statement is to:
A. Describe annual tactics
B. Define the organization’s reason for existence and guiding purpose
C. List quarterly financial targets
D. Replace strategic planning
Answer: B
Rationale: Mission clarifies why the organization exists; strategy translates mission into
goals/actions.
3) In a SWOT analysis, a new state regulation increasing compliance costs is a:
A. Strength
B. Weakness
C. Opportunity
D. Threat
Answer: D
Rationale: External factor that may harm performance = threat.
4) Best indicator a strategy is working in population health?
A. More admissions and longer LOS
B. Improved outcomes and lower avoidable utilization (e.g., readmissions)
C. Higher charge master rates
D. Increased ED boarding hours
Answer: B
Rationale: Population health focuses on outcomes and avoidable utilization, not volume.
, Healthcare Finance
5) Contribution margin is:
A. Revenue – fixed costs
B. Revenue – variable costs
C. Net income – taxes
D. Assets – liabilities
Answer: B
Rationale: Contribution margin shows what’s left to cover fixed costs and profit.
6) A project costs $2M and generates $600k/year net cash flow for 5 years. Best single metric
to account for time value of money?
A. Payback period
B. Net present value (NPV)
C. Average cost per case
D. Operating margin
Answer: B
Rationale: NPV discounts future cash flows and is preferred for capital decisions.
7) Days cash on hand measures:
A. Ability to cover operating expenses with available cash reserves
B. Total patient satisfaction
C. Staff turnover
D. Market share growth
Answer: A
Rationale: Liquidity measure: how long you can operate using cash/near-cash.
8) A hospital’s current ratio declines significantly. Most likely implication:
A. Improved liquidity
B. Worsened short-term ability to meet obligations
C. Higher long-term solvency
D. Lower accounts receivable
Answer: B
Rationale: Current ratio (current assets/current liabilities) indicates short-term liquidity.
Quality, Patient Safety, and Performance Improvement
