Healthcare Finance Exam #3
reimbursement - correct answer ✔✔through government (Medicare and Medicaid) and third party
payors
cost shifting - correct answer ✔✔shifting costs to some payers to offset losses from other payors
(employment-based)
Requirement of Affordable Care Act on Reimbursement - correct answer ✔✔report charges on an
annual basis- can track charges so there's not vast disparities, fairness, and equity -Requires hospitals to
publicize an annual updated list of standard charges. Tax-exempt hospitals cannot charge uninsured
patients any higher rates than those negotiated by insurance companies. Hospitals must have a financial
assistance policy
planning - correct answer ✔✔as a management function is the process of deciding in advance what
must be done in the future
establishing goals, objectives, policies, procedures, methods, and rules necessary to achieve the
purposes of the organization. Planning proceeds, and serves as the framework for, the other
management functions of organizing, staffing, influencing, and controlling. - correct answer ✔✔What
does planning consist of?
1.) Sound organizational structure that ensures management accountability for the planning process. 2.)
Well-defined chart of accounts that corresponds with the organizational structure. 3.) Prompt and
accurate accounting system that ensure financial accountability for the planning process 4.)
Comprehensive management information system that captures nonfinancial information for each
department - correct answer ✔✔Prerequisites to planning?
3-10 years out, revised annually - correct answer ✔✔Time frame for strategic planning?
1 year out - correct answer ✔✔Time frame for operational planning?
, 1. Validate mission and strategic interpretations (reflect true purposes, provide means for executive
management to interpret the mission statement) 2. Assess the external environment 3. Assess internal
environment 4. Formulate the vision 5. Establish strategic thrusts 6. Identify critical success factors 7.
Develop core objectives 8. Develop strategic financial plan 9. Develop secondary department objectives
10. develop policies 11. develop procedures 12. develop methods 13. develop rules (1-8 are strategic, 9-
13 are operational) - correct answer ✔✔Steps in the planning process?
Demographic and socioeconomic characteristics of primary and secondary service areas, key economic
and employment indicators, patient migration patterns, market share stats for key competitors,
competitor profiles, managed care profile and physician profiles. - correct answer ✔✔Factors to consider
when assessing the external environment?
strategic thrusts - correct answer ✔✔Broad statements of significant results that an organization wants
to achieve related to its vision. (Also called goals) should be limited in number, stable and enduring and
taken together, comprehensive to the point that they provide meaningful results for all components of
the organization's mission
policies - correct answer ✔✔Broad guides to thinking that help subordinates with decision-making
procedures - correct answer ✔✔Guides to action, Identify a step-by-step way of accomplishing the
policy, derived from policies but more specific, are the result of a detailed analysis of how best to
accomplish the intent of the policy, good procedures provide the manager or supervisor with a
consistent and uniform performance appraisal
methods - correct answer ✔✔developed to accomplish the procedures. Detailed, uniform actions with
specific actions and predictable outcomes
Yearly basis and operating plan on a monthly or quarterly basis - correct answer ✔✔How often should a
strategic plan be reviewed?
planning horizons (different time spans), principal participants (governing body and executive
management develop strategic plan, the department managers develop the operational plan) and
objectives (strategic planning lists objectives common to the entire organization and the operating plan
lists secondary objectives by division or department) - correct answer ✔✔Difference between strategic
planning and operational planning?
reimbursement - correct answer ✔✔through government (Medicare and Medicaid) and third party
payors
cost shifting - correct answer ✔✔shifting costs to some payers to offset losses from other payors
(employment-based)
Requirement of Affordable Care Act on Reimbursement - correct answer ✔✔report charges on an
annual basis- can track charges so there's not vast disparities, fairness, and equity -Requires hospitals to
publicize an annual updated list of standard charges. Tax-exempt hospitals cannot charge uninsured
patients any higher rates than those negotiated by insurance companies. Hospitals must have a financial
assistance policy
planning - correct answer ✔✔as a management function is the process of deciding in advance what
must be done in the future
establishing goals, objectives, policies, procedures, methods, and rules necessary to achieve the
purposes of the organization. Planning proceeds, and serves as the framework for, the other
management functions of organizing, staffing, influencing, and controlling. - correct answer ✔✔What
does planning consist of?
1.) Sound organizational structure that ensures management accountability for the planning process. 2.)
Well-defined chart of accounts that corresponds with the organizational structure. 3.) Prompt and
accurate accounting system that ensure financial accountability for the planning process 4.)
Comprehensive management information system that captures nonfinancial information for each
department - correct answer ✔✔Prerequisites to planning?
3-10 years out, revised annually - correct answer ✔✔Time frame for strategic planning?
1 year out - correct answer ✔✔Time frame for operational planning?
, 1. Validate mission and strategic interpretations (reflect true purposes, provide means for executive
management to interpret the mission statement) 2. Assess the external environment 3. Assess internal
environment 4. Formulate the vision 5. Establish strategic thrusts 6. Identify critical success factors 7.
Develop core objectives 8. Develop strategic financial plan 9. Develop secondary department objectives
10. develop policies 11. develop procedures 12. develop methods 13. develop rules (1-8 are strategic, 9-
13 are operational) - correct answer ✔✔Steps in the planning process?
Demographic and socioeconomic characteristics of primary and secondary service areas, key economic
and employment indicators, patient migration patterns, market share stats for key competitors,
competitor profiles, managed care profile and physician profiles. - correct answer ✔✔Factors to consider
when assessing the external environment?
strategic thrusts - correct answer ✔✔Broad statements of significant results that an organization wants
to achieve related to its vision. (Also called goals) should be limited in number, stable and enduring and
taken together, comprehensive to the point that they provide meaningful results for all components of
the organization's mission
policies - correct answer ✔✔Broad guides to thinking that help subordinates with decision-making
procedures - correct answer ✔✔Guides to action, Identify a step-by-step way of accomplishing the
policy, derived from policies but more specific, are the result of a detailed analysis of how best to
accomplish the intent of the policy, good procedures provide the manager or supervisor with a
consistent and uniform performance appraisal
methods - correct answer ✔✔developed to accomplish the procedures. Detailed, uniform actions with
specific actions and predictable outcomes
Yearly basis and operating plan on a monthly or quarterly basis - correct answer ✔✔How often should a
strategic plan be reviewed?
planning horizons (different time spans), principal participants (governing body and executive
management develop strategic plan, the department managers develop the operational plan) and
objectives (strategic planning lists objectives common to the entire organization and the operating plan
lists secondary objectives by division or department) - correct answer ✔✔Difference between strategic
planning and operational planning?
