Part 1: Multiple Choice
The answers to the multiple choice questions of part 1 of this exam will result in a score between 1
and 10 for Part 1. This score has weight 2/3rd in the overall exam grade.
1
, Question 1: With which of the following statements would Porter (Annals of Surgery, 2008) most likely
disagree:
a) Value is defined as the health outcome per dollar spent.
b) Providing care in integrated practice units can help to reduce the fragmentation in today’s
service delivery structure.
c) Measuring value across the entire care cycle is an essential principal of value-based delivery
and can be accomplished by measuring one specific outcome, such as mortality, for each
medical condition.
d) Value creation should be aligned with reimbursement, i.e. for each medical condition there
should be one reimbursement scheme, which spans the entire care cycle.
Question 2: Hospital A and Hospital B both operate on a not-for-profit base and both have a weighted
average cost of capital of 6%. Hospital A’s revenues exceed the operating costs by 90.000 EUR and the
invested capital amounts to 1.600.000 EUR. Hospital B has invested 2.000.000 EUR and its Return on
Invested Capital (ROIC) amounts to 6%.
Which statement is according to Koller (1994) correct?
a) Hospital A generates more value than Hospital B because its ROIC is larger.
b) Hospital B generates more value than Hospital A because its operating margin is higher.
c) Both hospitals generate value since their capital costs are covered.
d) Hospital B does not generate value since the operating margin amounts to 120.000 and is
exactly equal to the weighted average cost of capital.
Question 3: Which statement is incorrect? (Select a,b or c if the corresponding answer is not correct,
select d otherwise)
a) Defining the cost object is the first step within the cost accounting methodology. In the health
context, typical cost objects are hour of service, day of care, or even a DBC.
b) Distinguishing between mission and support centers is based upon the organization’s overall
focus. A laboratory department can thus be regarded as a mission center or as a support
center depending on the organization’s mission.
c) Within the traditional cost accounting approach, there is one specific allocation metric for
each support center. Ideally, there should be a proportional relationship between the
allocation metric and the expected costs.
d) (select d if all of a,b, and c are correct).
2
The answers to the multiple choice questions of part 1 of this exam will result in a score between 1
and 10 for Part 1. This score has weight 2/3rd in the overall exam grade.
1
, Question 1: With which of the following statements would Porter (Annals of Surgery, 2008) most likely
disagree:
a) Value is defined as the health outcome per dollar spent.
b) Providing care in integrated practice units can help to reduce the fragmentation in today’s
service delivery structure.
c) Measuring value across the entire care cycle is an essential principal of value-based delivery
and can be accomplished by measuring one specific outcome, such as mortality, for each
medical condition.
d) Value creation should be aligned with reimbursement, i.e. for each medical condition there
should be one reimbursement scheme, which spans the entire care cycle.
Question 2: Hospital A and Hospital B both operate on a not-for-profit base and both have a weighted
average cost of capital of 6%. Hospital A’s revenues exceed the operating costs by 90.000 EUR and the
invested capital amounts to 1.600.000 EUR. Hospital B has invested 2.000.000 EUR and its Return on
Invested Capital (ROIC) amounts to 6%.
Which statement is according to Koller (1994) correct?
a) Hospital A generates more value than Hospital B because its ROIC is larger.
b) Hospital B generates more value than Hospital A because its operating margin is higher.
c) Both hospitals generate value since their capital costs are covered.
d) Hospital B does not generate value since the operating margin amounts to 120.000 and is
exactly equal to the weighted average cost of capital.
Question 3: Which statement is incorrect? (Select a,b or c if the corresponding answer is not correct,
select d otherwise)
a) Defining the cost object is the first step within the cost accounting methodology. In the health
context, typical cost objects are hour of service, day of care, or even a DBC.
b) Distinguishing between mission and support centers is based upon the organization’s overall
focus. A laboratory department can thus be regarded as a mission center or as a support
center depending on the organization’s mission.
c) Within the traditional cost accounting approach, there is one specific allocation metric for
each support center. Ideally, there should be a proportional relationship between the
allocation metric and the expected costs.
d) (select d if all of a,b, and c are correct).
2
