http://testbankgo.eu/marquis-8th-edition-leadership-roles-and-management-functions-in-
nursing/
Chapter 10
1. What is fiscal planning?
A) A learned skill that improves with practice
B) A job role of the facility business manager
C) Part of the organizing phase of the management process
D) Reactive based on political, social, and economic forces
Ans: A
Feedback: Fiscal planning is a learned skill and must include nursing management input. It should never be reactive,
and it is part of the planning process of management.
2. What is the basic principle of responsibility accounting?
A) An organizations revenues, expenses, assets, and liabilities are someone’s
concern.
B) Managers have a responsibility to submit their budgets on time.
C) The organizations financial officer works with department heads regarding budget approval.
D) Fiscal accounting should be honest and accurate.
Ans: A
Feedback: Responsibility accounting requires that someone must be responsible for all revenue, expenses, assets,
and liabilities. While true, the other options are not the basic principle of responsibility accounting.
3. Which activity is a responsibility of the unit manager regarding fiscal planning?
A) To assume responsibility for achieving budgetary planning goals
B) To monitor and evaluate all aspects of the units budget control
C) To streamline the number of subordinates involved in the budgetary process
D) To control unpredictable census variations that may undermine the personnel budget
Ans: B
Feedback: The managers responsibility is to monitor all aspects of the units budget. The other options fail to identify
a managers responsibility.
4. Which is a leadership role in fiscal planning?
A) Coordinating the monitoring aspects of budget control
B) Accurately assessing personnel needs using agreed-on standards or an established
patient classification system
C) Assessing the internal and external environment of the organization in forecasting to
identify driving forces and barriers to fiscal planning
D) Being visionary in identifying short- and long-term unit fiscal needs
Ans: D
Feedback: Leaders are visionary; the other roles are management related.
5. What type of budget requires rejustification for yearly fiscal needs?
A) Incremental budgeting
B) Perpetual budgeting
C) Zero-based budgeting
D) Managed care
Ans: C
Feedback: Zero-based budgeting begins each year with zero and requires rejustification. This is not true of the other
options.
6. Equipment depreciation, the number and type of supplies needed by patients, and overtime
that occurs in response to an emergency are all examples of what type of expenses?
, 7. What is inferred if an item is “cost-effective”?
A) It is the least expensive product available
B) It is worth the cost
C) It is reimbursable
D) Its cost was anticipated
Ans: B
Feedback: Cost-effective does not necessarily imply the cheapest, but it requires that the expenditure be worth the
cost. The other options are not characteristic of the term cost effective.
8. What is the largest budget expenditure for health-care organizations?
A) The personnel budget
B) Short-term capital acquisitions
C) The operating budget
D) Supplies and equipment
Ans: A
Feedback: Health care is labor intensive; therefore, the personnel budget makes up the largest expense. The other
options represent less expensive expenditures.
9. Determine the nursing care hours per patient day (NCH/PPD) if the following staffing existed for a 24-
hour period (unit census = 10):
12 midnight to 12 noon, 1 registered nurse, 1 licensed vocational nurse
12 noon to 12 midnight, 1 registered nurse, 1 licensed vocational nurse, 1 unit clerk (8 hours only)
1 A) 5.6 NCH/PPD
2 B) 4.8 NCH/PPD
3 C) 5.0 NCH/PPD
4 D) 6.2 NCH/PPD
Ans: A
Feedback: A total of 56 hours of nursing was worked in 24 hours (unit clerks are counted in NCH/PPD) and the
census was 10 patients. Dividing the total number of nursing care hours by the census (56 divided by 10) yields an
NCH/PPD calculation of 5.6 NCH/PPD.
10. The measurement of NCH/PPD will provide what information?
A) The acuity level of the patients on a particular unit in a 24-hour time span
B) The total number of hours worked by nursing personnel on a particular unit in a 24-hour time
span divided by the patient census
C) The specific amount of money spent on staffing during a 24-hour period
D) The quality of nursing care that was provided on a particular unit in a 24-hour time span
Ans: B
Feedback: The Personnel Budget NCH/PPD refers to number of nursing care hours worked in 24 hours divided by
the patient census.
11. What is the name for a provision of health care in an organized system to subscribing members in a
geographical area with an agreed-on set of basic and preventive supplemental health maintenance and treatment
services for a fixed, prepaid charge?
A) Preferred provider organizations (PPOs)
B) A traditional third-party payer indemnity
plan C) A health maintenance organization
(HMO)
D) Diagnostic-related groupings (DRGs)
Ans: C
Feedback: HMOs provide health care in an organized system to subscribing members in a geographical area with
an agreed-on set of basic and preventive supplemental health maintenance and treatment services for a fixed,
prepaid charge. That definition does not apply to the other options.
12. What was the primary reason for the development of the prospective payment system?
, 13. What is capitation?
A) A reimbursement schema whereby health-care organizations receive a predetermined amount (based on a patients
diagnosis for services provided)
B) The limited availability of services to patients in managed care organizations
C) The use of a “gatekeeper” to ensure appropriate utilization of services
D) A predetermined, negotiated payment to providers, per patient, regardless ofwhether services are used
Ans: D
Feedback:Capitation is a predetermined, negotiated payment to providers, per patient, regardless of whether services
are used. None of the other options correctly describe capitation.
14. Which use of limited resources would result in increased reimbursement revenues?
A) Education on appropriate documentation on patient care records
B) Number of clinical nurse specialists
C) Educational paid days for licensed staff
D) Mix and number of clinical staff
Ans: A
Feedback: Although options B, C, and D have the potential to improve patient care, education on documentation
would most likely increase revenues.
15. Which statement best describes critical pathways?
A) They determine justifiable differences among clients
B) They decrease the amount of paperwork required for reimbursement
C) They reduce administrative costs
D) They provide a means of standardizing care for clients with similar diagnoses
Ans: D
Feedback: Critical pathways are one means of standardizing care for clients with similar diagnoses. The other
options are not true statements regarding critical pathways.
16. Using a decision package to aid in fiscal priority setting is a key feature of what type of budgeting?
A) Personnel workforce
B) Operating
C) Capital
D) Zero based
Ans: D
Feedback: Managers must rejustify their program or needs every budgeting cycle in zero-based budgeting. Among
the options available using a decision package to set funding priorities is a key feature of only zero-based budgeting.
17. Key principles of managed care include:
1. Nurses as gatekeepers
2. Focus on prevention
3. Decreased emphasis on inpatient hospital care
4. Capitation
A) 1, 2, 3
B) 1, 2, 4
C) 1, 3, 4
D) 2, 3, 4
Ans: D
Feedback: Key principles of managed care include the use of primary care providers as gatekeepers, a focus on
prevention, a decreased emphasis on inpatient hospital care, the use of clinical practice guidelines for providers,
selective contracting, capitation, utilization review, the use of formularies to manage pharmacy care, and continuous
quality monitoring and improvement.
18. Which statement accurately describes provision of service?
1 It guarantees reimbursement
, Ans: C
Feedback: Provision of service no longer guarantees reimbursement. Clear and comprehensive documentation of the
need for services and actual services provided is needed for reimbursement.
19. What are the results of managed care backlash?
1. Delay of payment for services provided
2. Denial of requests for additional
treatment 3. Increased premiums to
consumers
1 A) 1, 2 4. Lower co-pays and deductibles
2 B) 1, 3
3 C) 2, 4
4 D) 3, 4
Ans: B
Feedback: Providers have grown increasingly frustrated with limited and delayed reimbursement for services
provided as well as the need to justify need for services ordered. This phenomenon, referred to as managed care
backlash, resulted in some managed care programs beginning to say yes to more treatments although they have
passed the cost along with customers in the form of higher premiums, co-pays, and deductibles.
20. What changed the structure of Medicare payments from a retrospectively adjusted cost reimbursement system
to a prospective, risk-based one?
A) Zero-based budget
B) Diagnostic-related groupings
C) Prospective payment system
D) Incremental budgets
Ans: B
Feedback:The impetus of diagnosis-related groupings changed the structure of Medicare payments from a
retrospectively adjusted cost reimbursement system to a prospective, risk-based one. None of the other options were
involved in the change.
21. Which statement concerning a budget is true?
A) A budgets reliability is related to how far in advance it was created
B) Budgets should be created as far in advance is possible
C) A budget is revised every 3 months during a fiscal year
D) Budgets are reliable only when expenses are fixed
Ans: A
Feedback: A budget that is predicted too far in advance has greater probability for error. The other options are
incorrect statements regarding a budget.
22. Which statement regarding fiscal planning is true? Select all that apply.
A) Social influences affect fiscal planning
B) The successful fiscal planner is creative
C) An understanding of economic forces is necessary
D) Practical experience is a key to being a good fiscal planner
Ans: A, B, C, D
Feedback: Fiscal planning is not intuitive; it is a learned skill that improves with practice. Fiscal planning also
requires vision, creativity, and a thorough knowledge of the political, social, and economic forces that shape health
care.
23. Which statement about American health-care budget spending is correct?
A) A large health-care budget equals quality health-care outcomes
B) America spends less than any other industrialized country on health care
C) The outcomes related to low birth-weight infants have not been successfully met
D) The scarcity of resources is the biggest factor in the failure to reach outcomes
Ans: C
nursing/
Chapter 10
1. What is fiscal planning?
A) A learned skill that improves with practice
B) A job role of the facility business manager
C) Part of the organizing phase of the management process
D) Reactive based on political, social, and economic forces
Ans: A
Feedback: Fiscal planning is a learned skill and must include nursing management input. It should never be reactive,
and it is part of the planning process of management.
2. What is the basic principle of responsibility accounting?
A) An organizations revenues, expenses, assets, and liabilities are someone’s
concern.
B) Managers have a responsibility to submit their budgets on time.
C) The organizations financial officer works with department heads regarding budget approval.
D) Fiscal accounting should be honest and accurate.
Ans: A
Feedback: Responsibility accounting requires that someone must be responsible for all revenue, expenses, assets,
and liabilities. While true, the other options are not the basic principle of responsibility accounting.
3. Which activity is a responsibility of the unit manager regarding fiscal planning?
A) To assume responsibility for achieving budgetary planning goals
B) To monitor and evaluate all aspects of the units budget control
C) To streamline the number of subordinates involved in the budgetary process
D) To control unpredictable census variations that may undermine the personnel budget
Ans: B
Feedback: The managers responsibility is to monitor all aspects of the units budget. The other options fail to identify
a managers responsibility.
4. Which is a leadership role in fiscal planning?
A) Coordinating the monitoring aspects of budget control
B) Accurately assessing personnel needs using agreed-on standards or an established
patient classification system
C) Assessing the internal and external environment of the organization in forecasting to
identify driving forces and barriers to fiscal planning
D) Being visionary in identifying short- and long-term unit fiscal needs
Ans: D
Feedback: Leaders are visionary; the other roles are management related.
5. What type of budget requires rejustification for yearly fiscal needs?
A) Incremental budgeting
B) Perpetual budgeting
C) Zero-based budgeting
D) Managed care
Ans: C
Feedback: Zero-based budgeting begins each year with zero and requires rejustification. This is not true of the other
options.
6. Equipment depreciation, the number and type of supplies needed by patients, and overtime
that occurs in response to an emergency are all examples of what type of expenses?
, 7. What is inferred if an item is “cost-effective”?
A) It is the least expensive product available
B) It is worth the cost
C) It is reimbursable
D) Its cost was anticipated
Ans: B
Feedback: Cost-effective does not necessarily imply the cheapest, but it requires that the expenditure be worth the
cost. The other options are not characteristic of the term cost effective.
8. What is the largest budget expenditure for health-care organizations?
A) The personnel budget
B) Short-term capital acquisitions
C) The operating budget
D) Supplies and equipment
Ans: A
Feedback: Health care is labor intensive; therefore, the personnel budget makes up the largest expense. The other
options represent less expensive expenditures.
9. Determine the nursing care hours per patient day (NCH/PPD) if the following staffing existed for a 24-
hour period (unit census = 10):
12 midnight to 12 noon, 1 registered nurse, 1 licensed vocational nurse
12 noon to 12 midnight, 1 registered nurse, 1 licensed vocational nurse, 1 unit clerk (8 hours only)
1 A) 5.6 NCH/PPD
2 B) 4.8 NCH/PPD
3 C) 5.0 NCH/PPD
4 D) 6.2 NCH/PPD
Ans: A
Feedback: A total of 56 hours of nursing was worked in 24 hours (unit clerks are counted in NCH/PPD) and the
census was 10 patients. Dividing the total number of nursing care hours by the census (56 divided by 10) yields an
NCH/PPD calculation of 5.6 NCH/PPD.
10. The measurement of NCH/PPD will provide what information?
A) The acuity level of the patients on a particular unit in a 24-hour time span
B) The total number of hours worked by nursing personnel on a particular unit in a 24-hour time
span divided by the patient census
C) The specific amount of money spent on staffing during a 24-hour period
D) The quality of nursing care that was provided on a particular unit in a 24-hour time span
Ans: B
Feedback: The Personnel Budget NCH/PPD refers to number of nursing care hours worked in 24 hours divided by
the patient census.
11. What is the name for a provision of health care in an organized system to subscribing members in a
geographical area with an agreed-on set of basic and preventive supplemental health maintenance and treatment
services for a fixed, prepaid charge?
A) Preferred provider organizations (PPOs)
B) A traditional third-party payer indemnity
plan C) A health maintenance organization
(HMO)
D) Diagnostic-related groupings (DRGs)
Ans: C
Feedback: HMOs provide health care in an organized system to subscribing members in a geographical area with
an agreed-on set of basic and preventive supplemental health maintenance and treatment services for a fixed,
prepaid charge. That definition does not apply to the other options.
12. What was the primary reason for the development of the prospective payment system?
, 13. What is capitation?
A) A reimbursement schema whereby health-care organizations receive a predetermined amount (based on a patients
diagnosis for services provided)
B) The limited availability of services to patients in managed care organizations
C) The use of a “gatekeeper” to ensure appropriate utilization of services
D) A predetermined, negotiated payment to providers, per patient, regardless ofwhether services are used
Ans: D
Feedback:Capitation is a predetermined, negotiated payment to providers, per patient, regardless of whether services
are used. None of the other options correctly describe capitation.
14. Which use of limited resources would result in increased reimbursement revenues?
A) Education on appropriate documentation on patient care records
B) Number of clinical nurse specialists
C) Educational paid days for licensed staff
D) Mix and number of clinical staff
Ans: A
Feedback: Although options B, C, and D have the potential to improve patient care, education on documentation
would most likely increase revenues.
15. Which statement best describes critical pathways?
A) They determine justifiable differences among clients
B) They decrease the amount of paperwork required for reimbursement
C) They reduce administrative costs
D) They provide a means of standardizing care for clients with similar diagnoses
Ans: D
Feedback: Critical pathways are one means of standardizing care for clients with similar diagnoses. The other
options are not true statements regarding critical pathways.
16. Using a decision package to aid in fiscal priority setting is a key feature of what type of budgeting?
A) Personnel workforce
B) Operating
C) Capital
D) Zero based
Ans: D
Feedback: Managers must rejustify their program or needs every budgeting cycle in zero-based budgeting. Among
the options available using a decision package to set funding priorities is a key feature of only zero-based budgeting.
17. Key principles of managed care include:
1. Nurses as gatekeepers
2. Focus on prevention
3. Decreased emphasis on inpatient hospital care
4. Capitation
A) 1, 2, 3
B) 1, 2, 4
C) 1, 3, 4
D) 2, 3, 4
Ans: D
Feedback: Key principles of managed care include the use of primary care providers as gatekeepers, a focus on
prevention, a decreased emphasis on inpatient hospital care, the use of clinical practice guidelines for providers,
selective contracting, capitation, utilization review, the use of formularies to manage pharmacy care, and continuous
quality monitoring and improvement.
18. Which statement accurately describes provision of service?
1 It guarantees reimbursement
, Ans: C
Feedback: Provision of service no longer guarantees reimbursement. Clear and comprehensive documentation of the
need for services and actual services provided is needed for reimbursement.
19. What are the results of managed care backlash?
1. Delay of payment for services provided
2. Denial of requests for additional
treatment 3. Increased premiums to
consumers
1 A) 1, 2 4. Lower co-pays and deductibles
2 B) 1, 3
3 C) 2, 4
4 D) 3, 4
Ans: B
Feedback: Providers have grown increasingly frustrated with limited and delayed reimbursement for services
provided as well as the need to justify need for services ordered. This phenomenon, referred to as managed care
backlash, resulted in some managed care programs beginning to say yes to more treatments although they have
passed the cost along with customers in the form of higher premiums, co-pays, and deductibles.
20. What changed the structure of Medicare payments from a retrospectively adjusted cost reimbursement system
to a prospective, risk-based one?
A) Zero-based budget
B) Diagnostic-related groupings
C) Prospective payment system
D) Incremental budgets
Ans: B
Feedback:The impetus of diagnosis-related groupings changed the structure of Medicare payments from a
retrospectively adjusted cost reimbursement system to a prospective, risk-based one. None of the other options were
involved in the change.
21. Which statement concerning a budget is true?
A) A budgets reliability is related to how far in advance it was created
B) Budgets should be created as far in advance is possible
C) A budget is revised every 3 months during a fiscal year
D) Budgets are reliable only when expenses are fixed
Ans: A
Feedback: A budget that is predicted too far in advance has greater probability for error. The other options are
incorrect statements regarding a budget.
22. Which statement regarding fiscal planning is true? Select all that apply.
A) Social influences affect fiscal planning
B) The successful fiscal planner is creative
C) An understanding of economic forces is necessary
D) Practical experience is a key to being a good fiscal planner
Ans: A, B, C, D
Feedback: Fiscal planning is not intuitive; it is a learned skill that improves with practice. Fiscal planning also
requires vision, creativity, and a thorough knowledge of the political, social, and economic forces that shape health
care.
23. Which statement about American health-care budget spending is correct?
A) A large health-care budget equals quality health-care outcomes
B) America spends less than any other industrialized country on health care
C) The outcomes related to low birth-weight infants have not been successfully met
D) The scarcity of resources is the biggest factor in the failure to reach outcomes
Ans: C
