LSUS MHA 706 MIDTERM & FINAL EXAM MEGA STUDY GUIDE
PROVEN EXAM MCQS WITH IN-DEPTH RATIONALES & VERIFIED
ANSWERS GRADED A+ CORE TEST BANK BUNDLE
This comprehensive exam study guide features highly relevant
multiple-choice questions with verified answers and detailed rationales.
It systematically covers core healthcare management principles,
including financial ratios, cost allocation, managed care reimbursement,
healthcare policy, and quality improvement frameworks. Designed to
mirror graduate-level examinations, this test bank serves as an
essential resource for securing top grades and mastering complex
administrative concepts.
Healthcare Economics & Financial Management
1. Which of the most common reimbursement methods
shifts the highest financial risk onto the healthcare
provider?
A. Fee-for-service
B. Per diem payment
C. Capitation
D. Cost-plus reimbursement
Rationale: Under capitation, providers receive a
fixed amount per patient per unit of time,
regardless of whether the patient seeks care. This
shifts full financial risk to the provider to manage
utilization.
,2. What economic concept describes a situation where
an insured individual alters their behavior and
consumes more healthcare services purely because
they are protected from the full cost?
A. Adverse selection
B. Moral hazard
C. Asymmetric information
D. Supplier-induced demand
Rationale: Moral hazard occurs when having
insurance lowers the out-of-pocket cost of care,
incentivizing individuals to utilize more medical
services than they would if paying full price.
3. When healthier individuals opt out of an insurance
pool, leaving only higher-risk individuals enrolled, it
results in skyrocketing premiums. What is this
phenomenon called?
A. Adverse selection
B. Risk aversion
C. Market concentration
D. Preferred selection
Rationale: Adverse selection occurs when high-
risk individuals are more likely to buy insurance
, than low-risk individuals, unbalancing the risk
pool and driving up costs.
4. Which of the following represents a fixed cost for a
hospital department?
A. Medical surgical supplies
B. Annual diagnostic equipment depreciation
C. Registry nursing labor hourly costs
D. Outpatient prescription medications
Rationale: Fixed costs do not vary with patient
volume in the short term. Equipment depreciation
remains constant regardless of how many
patients are treated.
5. In healthcare cost accounting, what is the term for
costs that cannot be directly traced to a specific
patient department but are shared across the
organization?
A. Direct costs
B. Variable costs
C. Marginal costs
D. Indirect costs
Rationale: Indirect costs (or overhead) include
shared services like facility maintenance,
, administration, and IT that support multiple
revenue-generating departments.
6. What type of economic evaluation measures the
outcomes of healthcare interventions purely in terms
of natural units, such as life-years gained or
millimeters of mercury (mmHg) reduced?
A. Cost-benefit analysis
B. Cost-effectiveness analysis
C. Cost-utility analysis
D. Cost-minimization analysis
Rationale: Cost-effectiveness analysis compares
the health outcomes of different interventions
using clinical, non-monetary natural units.
7. If a health system faces a perfectly inelastic demand
curve for a highly specialized life-saving oncology
drug, how will a 20% increase in price affect the
quantity demanded?
A. Quantity demanded will drop by 20%.
B. Quantity demanded will drop by more than 20%.
C. Quantity demanded will not change.
D. Quantity demanded will increase.
Rationale: Perfectly inelastic demand means that
price changes have zero effect on the quantity
PROVEN EXAM MCQS WITH IN-DEPTH RATIONALES & VERIFIED
ANSWERS GRADED A+ CORE TEST BANK BUNDLE
This comprehensive exam study guide features highly relevant
multiple-choice questions with verified answers and detailed rationales.
It systematically covers core healthcare management principles,
including financial ratios, cost allocation, managed care reimbursement,
healthcare policy, and quality improvement frameworks. Designed to
mirror graduate-level examinations, this test bank serves as an
essential resource for securing top grades and mastering complex
administrative concepts.
Healthcare Economics & Financial Management
1. Which of the most common reimbursement methods
shifts the highest financial risk onto the healthcare
provider?
A. Fee-for-service
B. Per diem payment
C. Capitation
D. Cost-plus reimbursement
Rationale: Under capitation, providers receive a
fixed amount per patient per unit of time,
regardless of whether the patient seeks care. This
shifts full financial risk to the provider to manage
utilization.
,2. What economic concept describes a situation where
an insured individual alters their behavior and
consumes more healthcare services purely because
they are protected from the full cost?
A. Adverse selection
B. Moral hazard
C. Asymmetric information
D. Supplier-induced demand
Rationale: Moral hazard occurs when having
insurance lowers the out-of-pocket cost of care,
incentivizing individuals to utilize more medical
services than they would if paying full price.
3. When healthier individuals opt out of an insurance
pool, leaving only higher-risk individuals enrolled, it
results in skyrocketing premiums. What is this
phenomenon called?
A. Adverse selection
B. Risk aversion
C. Market concentration
D. Preferred selection
Rationale: Adverse selection occurs when high-
risk individuals are more likely to buy insurance
, than low-risk individuals, unbalancing the risk
pool and driving up costs.
4. Which of the following represents a fixed cost for a
hospital department?
A. Medical surgical supplies
B. Annual diagnostic equipment depreciation
C. Registry nursing labor hourly costs
D. Outpatient prescription medications
Rationale: Fixed costs do not vary with patient
volume in the short term. Equipment depreciation
remains constant regardless of how many
patients are treated.
5. In healthcare cost accounting, what is the term for
costs that cannot be directly traced to a specific
patient department but are shared across the
organization?
A. Direct costs
B. Variable costs
C. Marginal costs
D. Indirect costs
Rationale: Indirect costs (or overhead) include
shared services like facility maintenance,
, administration, and IT that support multiple
revenue-generating departments.
6. What type of economic evaluation measures the
outcomes of healthcare interventions purely in terms
of natural units, such as life-years gained or
millimeters of mercury (mmHg) reduced?
A. Cost-benefit analysis
B. Cost-effectiveness analysis
C. Cost-utility analysis
D. Cost-minimization analysis
Rationale: Cost-effectiveness analysis compares
the health outcomes of different interventions
using clinical, non-monetary natural units.
7. If a health system faces a perfectly inelastic demand
curve for a highly specialized life-saving oncology
drug, how will a 20% increase in price affect the
quantity demanded?
A. Quantity demanded will drop by 20%.
B. Quantity demanded will drop by more than 20%.
C. Quantity demanded will not change.
D. Quantity demanded will increase.
Rationale: Perfectly inelastic demand means that
price changes have zero effect on the quantity
