Healthcare Administration: Evolution, Systems, and Leadership
WGU D545 – HEALTHCARE ADMINISTRATION EVOLUTION, SYSTEM,
AND LEADERSHIP (ARO1) | EXAM QUESTIONS AND CORRECT
ANSWERS | LATEST 2026/2027
1. Which federal legislation passed in 1946 provided grants and loans
for the construction and modernization of hospitals across the United
States?
A. The Hill-Burton Act
B. The Kerr-Mills Act
C. The Health Maintenance Organization Act
D. The Social Security Act
A. The Hill-Burton Act
Hill-Burton funded a postwar hospital building boom, especially in rural
areas, in exchange for a commitment to provide some free care.
2. Medicare and Medicaid were created in 1965 through amendments
to which existing law?
A. The National Labor Relations Act
B. The Social Security Act
C. The Fair Labor Standards Act
D. The Public Health Service Act
B. The Social Security Act
Titles XVIII (Medicare) and XIX (Medicaid) were added to the Social
Security Act and signed by President Lyndon B. Johnson.
Page 1 of 65
,Healthcare Administration: Evolution, Systems, and Leadership
3. The 1910 Flexner Report had which major impact on American
healthcare?
A. It standardized medical education around a scientific, university-based
model
B. It established the Joint Commission
C. It mandated nurse licensure in every state
D. It created the first national health insurance program
A. It standardized medical education around a scientific, university-
based model
Flexner's review led to the closure of many weak proprietary medical
schools and tied training to science and hospitals.
4. Which act, signed in 1973, provided federal funding and a dual-
choice mandate to encourage the growth of health maintenance
organizations?
A. The HMO Act
B. The Hill-Burton Act
C. The Medicare Modernization Act
D. The Balanced Budget Act
A. The HMO Act
The HMO Act required many employers to offer a federally qualified HMO
option, accelerating managed care.
5. In 1983 Medicare replaced cost-based hospital reimbursement with a
prospective payment system that classifies inpatient stays into which
groupings?
A. Resource utilization groups
B. Ambulatory payment classifications
C. Resource-based relative value units
D. Diagnosis-related groups (DRGs)
D. Diagnosis-related groups (DRGs)
DRGs pay a predetermined amount per admission based on diagnosis,
giving hospitals an incentive to control length of stay and cost.
Page 2 of 65
,Healthcare Administration: Evolution, Systems, and Leadership
6. The early Blue Cross plans grew out of a 1929 prepaid hospital
arrangement created for which group?
A. Railroad workers in Chicago
B. Federal government employees
C. Steelworkers in Pittsburgh
D. Dallas schoolteachers at Baylor University Hospital
D. Dallas schoolteachers at Baylor University Hospital
Baylor offered teachers 21 days of hospital care for a small monthly fee,
the model that became Blue Cross.
7. Employer-sponsored health insurance expanded rapidly during
World War II mainly because:
A. Hospitals refused to treat uninsured workers
B. Wage controls led employers to offer health benefits to attract workers
C. Medicare had already covered retirees
D. Congress required all employers to provide coverage
B. Wage controls led employers to offer health benefits to attract
workers
Benefits were exempt from wartime wage freezes, and later tax rulings
made employer premiums tax-free.
8. Which 1999 Institute of Medicine report estimated that up to 98,000
Americans die each year from preventable medical errors?
A. Crossing the Quality Chasm
B. Unequal Treatment
C. To Err Is Human
D. Health Professions Education: A Bridge to Quality
C. To Err Is Human
To Err Is Human shifted attention from blaming individuals to designing
safer systems.
Page 3 of 65
, Healthcare Administration: Evolution, Systems, and Leadership
9. Crossing the Quality Chasm (2001) identified six aims for
improvement. Which choice lists them correctly?
A. Effective, profitable, timely, integrated, equitable, and lawful
B. Safe, affordable, accessible, accountable, ethical, and efficient
C. Safe, timely, effective, efficient, equitable, and patient-centered
D. Accessible, continuous, coordinated, comprehensive, cost-effective, and
safe
C. Safe, timely, effective, efficient, equitable, and patient-centered
The six aims are often remembered with the acronym STEEEP.
10. The Children's Health Insurance Program (CHIP) was created by
which legislation in 1997?
A. The Balanced Budget Act
B. The HITECH Act
C. The Deficit Reduction Act
D. The Affordable Care Act
A. The Balanced Budget Act
CHIP covers children in families whose income is too high for Medicaid
but too low to afford private coverage.
11. Medicare Part D prescription drug coverage was established by
which law?
A. Tax Equity and Fiscal Responsibility Act of 1982
B. Balanced Budget Act of 1997
C. Medicare Prescription Drug, Improvement, and Modernization Act of
2003
D. Affordable Care Act of 2010
C. Medicare Prescription Drug, Improvement, and Modernization Act
of 2003
The MMA created Part D, which began offering outpatient drug coverage
in 2006.
Page 4 of 65
WGU D545 – HEALTHCARE ADMINISTRATION EVOLUTION, SYSTEM,
AND LEADERSHIP (ARO1) | EXAM QUESTIONS AND CORRECT
ANSWERS | LATEST 2026/2027
1. Which federal legislation passed in 1946 provided grants and loans
for the construction and modernization of hospitals across the United
States?
A. The Hill-Burton Act
B. The Kerr-Mills Act
C. The Health Maintenance Organization Act
D. The Social Security Act
A. The Hill-Burton Act
Hill-Burton funded a postwar hospital building boom, especially in rural
areas, in exchange for a commitment to provide some free care.
2. Medicare and Medicaid were created in 1965 through amendments
to which existing law?
A. The National Labor Relations Act
B. The Social Security Act
C. The Fair Labor Standards Act
D. The Public Health Service Act
B. The Social Security Act
Titles XVIII (Medicare) and XIX (Medicaid) were added to the Social
Security Act and signed by President Lyndon B. Johnson.
Page 1 of 65
,Healthcare Administration: Evolution, Systems, and Leadership
3. The 1910 Flexner Report had which major impact on American
healthcare?
A. It standardized medical education around a scientific, university-based
model
B. It established the Joint Commission
C. It mandated nurse licensure in every state
D. It created the first national health insurance program
A. It standardized medical education around a scientific, university-
based model
Flexner's review led to the closure of many weak proprietary medical
schools and tied training to science and hospitals.
4. Which act, signed in 1973, provided federal funding and a dual-
choice mandate to encourage the growth of health maintenance
organizations?
A. The HMO Act
B. The Hill-Burton Act
C. The Medicare Modernization Act
D. The Balanced Budget Act
A. The HMO Act
The HMO Act required many employers to offer a federally qualified HMO
option, accelerating managed care.
5. In 1983 Medicare replaced cost-based hospital reimbursement with a
prospective payment system that classifies inpatient stays into which
groupings?
A. Resource utilization groups
B. Ambulatory payment classifications
C. Resource-based relative value units
D. Diagnosis-related groups (DRGs)
D. Diagnosis-related groups (DRGs)
DRGs pay a predetermined amount per admission based on diagnosis,
giving hospitals an incentive to control length of stay and cost.
Page 2 of 65
,Healthcare Administration: Evolution, Systems, and Leadership
6. The early Blue Cross plans grew out of a 1929 prepaid hospital
arrangement created for which group?
A. Railroad workers in Chicago
B. Federal government employees
C. Steelworkers in Pittsburgh
D. Dallas schoolteachers at Baylor University Hospital
D. Dallas schoolteachers at Baylor University Hospital
Baylor offered teachers 21 days of hospital care for a small monthly fee,
the model that became Blue Cross.
7. Employer-sponsored health insurance expanded rapidly during
World War II mainly because:
A. Hospitals refused to treat uninsured workers
B. Wage controls led employers to offer health benefits to attract workers
C. Medicare had already covered retirees
D. Congress required all employers to provide coverage
B. Wage controls led employers to offer health benefits to attract
workers
Benefits were exempt from wartime wage freezes, and later tax rulings
made employer premiums tax-free.
8. Which 1999 Institute of Medicine report estimated that up to 98,000
Americans die each year from preventable medical errors?
A. Crossing the Quality Chasm
B. Unequal Treatment
C. To Err Is Human
D. Health Professions Education: A Bridge to Quality
C. To Err Is Human
To Err Is Human shifted attention from blaming individuals to designing
safer systems.
Page 3 of 65
, Healthcare Administration: Evolution, Systems, and Leadership
9. Crossing the Quality Chasm (2001) identified six aims for
improvement. Which choice lists them correctly?
A. Effective, profitable, timely, integrated, equitable, and lawful
B. Safe, affordable, accessible, accountable, ethical, and efficient
C. Safe, timely, effective, efficient, equitable, and patient-centered
D. Accessible, continuous, coordinated, comprehensive, cost-effective, and
safe
C. Safe, timely, effective, efficient, equitable, and patient-centered
The six aims are often remembered with the acronym STEEEP.
10. The Children's Health Insurance Program (CHIP) was created by
which legislation in 1997?
A. The Balanced Budget Act
B. The HITECH Act
C. The Deficit Reduction Act
D. The Affordable Care Act
A. The Balanced Budget Act
CHIP covers children in families whose income is too high for Medicaid
but too low to afford private coverage.
11. Medicare Part D prescription drug coverage was established by
which law?
A. Tax Equity and Fiscal Responsibility Act of 1982
B. Balanced Budget Act of 1997
C. Medicare Prescription Drug, Improvement, and Modernization Act of
2003
D. Affordable Care Act of 2010
C. Medicare Prescription Drug, Improvement, and Modernization Act
of 2003
The MMA created Part D, which began offering outpatient drug coverage
in 2006.
Page 4 of 65
