healthcare finance final exam
liquidity ratio - correct answer ✔✔-ratios that measure an organization's ability to see short-term
obligations
-current ratio, collection period, day cash on hand/short-term sources, days cash on hand/all sources,
average payment period
profitability ratio - correct answer ✔✔-reflect an organization's ability to exist and grow by measuring
the relationship of revenues to expenses
-operating margin, total margin, return on net assets
activity ratio - correct answer ✔✔
capital structure ratio - correct answer ✔✔-reflect the organization's long-term liquidity by measuring a
variety of relationships to capital
-net asset financing, long-term debt to capitalization, debt service coverage, cash flow to debt
tax exempt status - correct answer ✔✔-the status that allows an organization to pay no taxes, including
sales tax, income tax, and property tax
-to qualify for tax exempt status, corporations must: operate exclusively for charitable, scientific, or
educations reasons; serve public rather than private interests, in that the organization's income does not
benefit individuals; and not engage in prohibited transactions (participating in political campaigns,
attempting to influence legislation, etc.)
third party payers - correct answer ✔✔-agents of patients who contract with providers (the second
party) to pay all or a part of the bill to the patient (the first party)
-the most common third party payers are insurance companies and the government (through medicare
and medicaid)
medicare - correct answer ✔✔-a federally funded program that provides health insurance to Americans
at age 65
, -in 1972 it was expanded to include coverage for people younger than 65 with stabilities who qualify for
Social Security disability benefits and those with end-stage renal disease
Medicare Part A - correct answer ✔✔-Part A (Hospital Insurance) helps cover inpatient care in hospitals,
and long term-care hospitals, and helps cover hospices, home health care services, and skilled nursing
facilities not for custodial care of long-term care
Medicare Part B - correct answer ✔✔-(Supplement Medical Insurance) helps cover physician services
and outpatient care, and helps cover some preventive services to maintain health and to keep certain
illnesses from getting worse
Medicare Part C - correct answer ✔✔-(Medicare Advantage) An expanded set of options for the delivery
of healthcare under Medicare. It includes health maintenance organizations, preferred provider
organizations, private fee-for-service plans, special needs plans, and Medicare medical savings accounts
plans
Medicare Part D - correct answer ✔✔provides outpatient prescription coverage
medicaid - correct answer ✔✔-signed into law by LBJ
-provides health insurance to the medically indigent (individuals who may be able to pay for normal
living expenses but cannot afford healthcare expenses)
costing - correct answer ✔✔
charges - correct answer ✔✔
balance sheet - correct answer ✔✔
assets - correct answer ✔✔
liabilities - correct answer ✔✔
liquidity ratio - correct answer ✔✔-ratios that measure an organization's ability to see short-term
obligations
-current ratio, collection period, day cash on hand/short-term sources, days cash on hand/all sources,
average payment period
profitability ratio - correct answer ✔✔-reflect an organization's ability to exist and grow by measuring
the relationship of revenues to expenses
-operating margin, total margin, return on net assets
activity ratio - correct answer ✔✔
capital structure ratio - correct answer ✔✔-reflect the organization's long-term liquidity by measuring a
variety of relationships to capital
-net asset financing, long-term debt to capitalization, debt service coverage, cash flow to debt
tax exempt status - correct answer ✔✔-the status that allows an organization to pay no taxes, including
sales tax, income tax, and property tax
-to qualify for tax exempt status, corporations must: operate exclusively for charitable, scientific, or
educations reasons; serve public rather than private interests, in that the organization's income does not
benefit individuals; and not engage in prohibited transactions (participating in political campaigns,
attempting to influence legislation, etc.)
third party payers - correct answer ✔✔-agents of patients who contract with providers (the second
party) to pay all or a part of the bill to the patient (the first party)
-the most common third party payers are insurance companies and the government (through medicare
and medicaid)
medicare - correct answer ✔✔-a federally funded program that provides health insurance to Americans
at age 65
, -in 1972 it was expanded to include coverage for people younger than 65 with stabilities who qualify for
Social Security disability benefits and those with end-stage renal disease
Medicare Part A - correct answer ✔✔-Part A (Hospital Insurance) helps cover inpatient care in hospitals,
and long term-care hospitals, and helps cover hospices, home health care services, and skilled nursing
facilities not for custodial care of long-term care
Medicare Part B - correct answer ✔✔-(Supplement Medical Insurance) helps cover physician services
and outpatient care, and helps cover some preventive services to maintain health and to keep certain
illnesses from getting worse
Medicare Part C - correct answer ✔✔-(Medicare Advantage) An expanded set of options for the delivery
of healthcare under Medicare. It includes health maintenance organizations, preferred provider
organizations, private fee-for-service plans, special needs plans, and Medicare medical savings accounts
plans
Medicare Part D - correct answer ✔✔provides outpatient prescription coverage
medicaid - correct answer ✔✔-signed into law by LBJ
-provides health insurance to the medically indigent (individuals who may be able to pay for normal
living expenses but cannot afford healthcare expenses)
costing - correct answer ✔✔
charges - correct answer ✔✔
balance sheet - correct answer ✔✔
assets - correct answer ✔✔
liabilities - correct answer ✔✔
