MHA 706 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● Define healthcare finance.
Answer: The practice of finance, including accounting and financial
management, within health services organizations.
●● What are the two main components of financial management?
Answer: Theory and concepts necessary to help managers make better
financial decisions.
●● What are the four main finance activities?
Answer: Planning and budgeting; financial reporting; capital investment
decisions; financing decisions.
●● What are the Four Cs in finance?
Answer: Cost minimization, Cash sufficiency, Capital access, Control of
financial resources.
●● What is the role of a Chief Financial Officer (CFO)?
Answer: To head the finance department and oversee financial
operations.
, ●● What are the advantages of a proprietorship?
Answer: Ease of formation, few regulations, no corporate income taxes.
●● What are the disadvantages of a corporation?
Answer: Cost of formation/reporting and double or triple taxation for
investor-owned corporations.
●● What is the primary financial goal of not-for-profit corporations?
Answer: To ensure the financial viability of the organization.
●● What significant healthcare legislation was enacted in 2010?
Answer: The Affordable Care Act (ACA)/PPACA.
●● What is an Accountable Care Organization (ACO)?
Answer: A network of physicians, clinicians, hospitals, and clinics
sharing responsibility for coordinated care, with payments connected to
quality metrics and cost.
●● What are the two major payer groups in healthcare?
Answer: Patients paying out of pocket and third-party payers/insurance
companies.
AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● Define healthcare finance.
Answer: The practice of finance, including accounting and financial
management, within health services organizations.
●● What are the two main components of financial management?
Answer: Theory and concepts necessary to help managers make better
financial decisions.
●● What are the four main finance activities?
Answer: Planning and budgeting; financial reporting; capital investment
decisions; financing decisions.
●● What are the Four Cs in finance?
Answer: Cost minimization, Cash sufficiency, Capital access, Control of
financial resources.
●● What is the role of a Chief Financial Officer (CFO)?
Answer: To head the finance department and oversee financial
operations.
, ●● What are the advantages of a proprietorship?
Answer: Ease of formation, few regulations, no corporate income taxes.
●● What are the disadvantages of a corporation?
Answer: Cost of formation/reporting and double or triple taxation for
investor-owned corporations.
●● What is the primary financial goal of not-for-profit corporations?
Answer: To ensure the financial viability of the organization.
●● What significant healthcare legislation was enacted in 2010?
Answer: The Affordable Care Act (ACA)/PPACA.
●● What is an Accountable Care Organization (ACO)?
Answer: A network of physicians, clinicians, hospitals, and clinics
sharing responsibility for coordinated care, with payments connected to
quality metrics and cost.
●● What are the two major payer groups in healthcare?
Answer: Patients paying out of pocket and third-party payers/insurance
companies.
