Healthcare Finance Final Exam Fall 2023 Questions and
Answers with verified solutions
T/F Healthcare is more heavily regulated than most other businesses in the U.S.
True
T/F A recent trend in healthcare is the growth of public corporations that own
multiple hospitals and other healthcare facilities
True
Which of the following financial management issues differentiates healthcare
form other businesses
third party payers
which type of healthcare reimbursement system pays a fixed amount per patient
capitation
when medicare and medicaid were established in 1965, their costs increased
much more than government planners expected. What was changed in 1982 in an
attempt to keep costs down
payments to healthcare providers were based on patients diagnoses
which type of healthcare insurance plan uses primary care clinician gatekeepers
to coordinate the care of plan participants
Health maintenance organizations
Most proprietorship from professional corporations in order to ____
reduce malpractice liabilities
A small, closely held corporation is owned by ___
a proprietorship
Federal tax revenues are based on C Corporations ____
dividends
A not for profit hospital must ___
adopt a corporate structure
Nursing home costs for elderly americans
are mostly covered by long term care insurance
The change that had the biggest financial impact on hospitals in the 1980s and
1990s was ___
the reimbursement based on patient diagnoses
what factors contributed to the rapid cost increases of the medicare and medicaid
programs in the 1960s
yes, this was when fee-for-service reimbursement was in place.
describe financial advantages of not for profit hospital over for a profit hospital.
not for profit-do not pay taxes, service the needs of community, must prove beneficial to
community to stay afloat. For profit--rely on investors of hospital, have more services
available, repay investors who invest in their company
t/f preferred provider organizations PPO plans are a form of managed care
true
t/f the federal governments first involvement in healthcare financing was based
on the social security amendments of 1965
true
,t/f TRICARE insurance is a private pay company contracted by the federal
government to provide healthcare insurance to members of the armed forces
true
What type of healthcare insurance coverage is most common in America
Private insurance from employer
Most healthcare providers receive most of their payments from ___
third party payers
Usual, Customary, and reasonable fees are ___
based on surveys conducted by insurance companies
When a person injured with a preferred provider organization plan receives health
services from a provider who does not participate in the plan, the insured person
___
pays more for the service
Healthcare providers who participate in a capitated payment type of health
maintenance organization ___
get paid a per member per month rate
Individuals covered by a high deductible health plan within a preferred provider
organization use fewer outpatient services and shop around for lower cost
outpatient services because they __
pay directly for routine care
Americans without heath insurance (private or government)
pay directly for routine medical care
Rising health care insurance costs in a tight employment (fewer jobs and many
qualified applicants) will likely result in employers ____
dropping part-time positions in favor of fewer full time positions
The social security act of 1935 ___
was part of Truman's Fair Deal
Describe the American Recovery and Reinvestment Act of 2009(ARRA), its
relation to COBRA, and how costs are paid
created new obligations for COBRA. COBRA provides coverage for indviduals who are
laid off and want to continue w/ health insurance. The gov pays 65% of premiums for
period of time.
Describe the Childrens Health Insurance Program of 1997
increased poverty levels (up to 200%) for children to be granted Medicaid healthcare
coverage.
Why are hospitals most affected by large numbers of uninsured persons
do not have PCPs. receive some/all care thru ER. Unable to afford PCP. Do not follow
up from ER w/ PCP. wait till super sick and most of time get admitted
T/F Healthcare spending in America has risen faster than the cost of living index
for decades
true
t/f new medical diagnostic technologies and new therapies reduce healthcare
costs by reducing the time between disease onset and proper treatmnet
false
T/F the patient protection and affordable care act of 2010 eliminated the donut
hole in prescription drug benefits for medicare beneficiaries
, true
Many healthcare insurance companies offer incentives for covered persons to
improve their health by exercising, not using tobacco products, and losing
weight. When such incentives work, the insurance companies' costs should go __
and future medicare costs of inviduals should go __
Down, up
which factor is most responsible for causing rapid rises in the salaries of
healthcare professionals
a shortage of qualified professionals
what is the most likely reason that some individuasl in Massachusetts pays the
fine of approx $1000 each year for not having approved healthcare insurance
policy
they do not expect to need healthcare, and the fine is less than the premiums
Healthcare insurance premiums increased significantly shortly after passage of
the patient protection and affordable care act of 2010. A part of the increased
premiums was due to ___
no deductibles or co payments for preventative care services
which program provides federal funds for the automation of electronic medical
records
health information technology for economic and clinical health act
t/f proponents of government run or government funded healthcare for all
residents call such a system universal healthcare
true
Why will medicare cost rise of the next two decades even if cost control efforts
prevent an increase in the average cost per medicare benficiary per year
baby boomers. They will go to nursing homes with limited coverage for nursing homes.
d/t chronic conditions, cont with med care. average age of living continues to increase,
more chronic conditions constant med care.
Explain why widespread use of high deductible healthcare insurance plans would
probably reduce the costs of routine outpatient services
individual has to pay more for care they are more liekly to ask about costs of services
and choose less expensive testing or services or decline unnecessary testing
What are the economic justification for specialist physicians receiving high fees
for services
more school to pay for and enter the work force later d/t school requirements.
t/f manual accounting systems use records referred to as ledgers
true
t/f the amount of money owed to a medical practice for service provided today is
entered as a credit in the expense account
false
t/f in double entry accounting, interest paid on a loan is posted as an expense
true
t/f a computerized double entry accounting system will never allow the posting of
a transaction in which the credits and debits do not match
true
in double entry accounting a trial balance is prepared. the expected result is ___
Answers with verified solutions
T/F Healthcare is more heavily regulated than most other businesses in the U.S.
True
T/F A recent trend in healthcare is the growth of public corporations that own
multiple hospitals and other healthcare facilities
True
Which of the following financial management issues differentiates healthcare
form other businesses
third party payers
which type of healthcare reimbursement system pays a fixed amount per patient
capitation
when medicare and medicaid were established in 1965, their costs increased
much more than government planners expected. What was changed in 1982 in an
attempt to keep costs down
payments to healthcare providers were based on patients diagnoses
which type of healthcare insurance plan uses primary care clinician gatekeepers
to coordinate the care of plan participants
Health maintenance organizations
Most proprietorship from professional corporations in order to ____
reduce malpractice liabilities
A small, closely held corporation is owned by ___
a proprietorship
Federal tax revenues are based on C Corporations ____
dividends
A not for profit hospital must ___
adopt a corporate structure
Nursing home costs for elderly americans
are mostly covered by long term care insurance
The change that had the biggest financial impact on hospitals in the 1980s and
1990s was ___
the reimbursement based on patient diagnoses
what factors contributed to the rapid cost increases of the medicare and medicaid
programs in the 1960s
yes, this was when fee-for-service reimbursement was in place.
describe financial advantages of not for profit hospital over for a profit hospital.
not for profit-do not pay taxes, service the needs of community, must prove beneficial to
community to stay afloat. For profit--rely on investors of hospital, have more services
available, repay investors who invest in their company
t/f preferred provider organizations PPO plans are a form of managed care
true
t/f the federal governments first involvement in healthcare financing was based
on the social security amendments of 1965
true
,t/f TRICARE insurance is a private pay company contracted by the federal
government to provide healthcare insurance to members of the armed forces
true
What type of healthcare insurance coverage is most common in America
Private insurance from employer
Most healthcare providers receive most of their payments from ___
third party payers
Usual, Customary, and reasonable fees are ___
based on surveys conducted by insurance companies
When a person injured with a preferred provider organization plan receives health
services from a provider who does not participate in the plan, the insured person
___
pays more for the service
Healthcare providers who participate in a capitated payment type of health
maintenance organization ___
get paid a per member per month rate
Individuals covered by a high deductible health plan within a preferred provider
organization use fewer outpatient services and shop around for lower cost
outpatient services because they __
pay directly for routine care
Americans without heath insurance (private or government)
pay directly for routine medical care
Rising health care insurance costs in a tight employment (fewer jobs and many
qualified applicants) will likely result in employers ____
dropping part-time positions in favor of fewer full time positions
The social security act of 1935 ___
was part of Truman's Fair Deal
Describe the American Recovery and Reinvestment Act of 2009(ARRA), its
relation to COBRA, and how costs are paid
created new obligations for COBRA. COBRA provides coverage for indviduals who are
laid off and want to continue w/ health insurance. The gov pays 65% of premiums for
period of time.
Describe the Childrens Health Insurance Program of 1997
increased poverty levels (up to 200%) for children to be granted Medicaid healthcare
coverage.
Why are hospitals most affected by large numbers of uninsured persons
do not have PCPs. receive some/all care thru ER. Unable to afford PCP. Do not follow
up from ER w/ PCP. wait till super sick and most of time get admitted
T/F Healthcare spending in America has risen faster than the cost of living index
for decades
true
t/f new medical diagnostic technologies and new therapies reduce healthcare
costs by reducing the time between disease onset and proper treatmnet
false
T/F the patient protection and affordable care act of 2010 eliminated the donut
hole in prescription drug benefits for medicare beneficiaries
, true
Many healthcare insurance companies offer incentives for covered persons to
improve their health by exercising, not using tobacco products, and losing
weight. When such incentives work, the insurance companies' costs should go __
and future medicare costs of inviduals should go __
Down, up
which factor is most responsible for causing rapid rises in the salaries of
healthcare professionals
a shortage of qualified professionals
what is the most likely reason that some individuasl in Massachusetts pays the
fine of approx $1000 each year for not having approved healthcare insurance
policy
they do not expect to need healthcare, and the fine is less than the premiums
Healthcare insurance premiums increased significantly shortly after passage of
the patient protection and affordable care act of 2010. A part of the increased
premiums was due to ___
no deductibles or co payments for preventative care services
which program provides federal funds for the automation of electronic medical
records
health information technology for economic and clinical health act
t/f proponents of government run or government funded healthcare for all
residents call such a system universal healthcare
true
Why will medicare cost rise of the next two decades even if cost control efforts
prevent an increase in the average cost per medicare benficiary per year
baby boomers. They will go to nursing homes with limited coverage for nursing homes.
d/t chronic conditions, cont with med care. average age of living continues to increase,
more chronic conditions constant med care.
Explain why widespread use of high deductible healthcare insurance plans would
probably reduce the costs of routine outpatient services
individual has to pay more for care they are more liekly to ask about costs of services
and choose less expensive testing or services or decline unnecessary testing
What are the economic justification for specialist physicians receiving high fees
for services
more school to pay for and enter the work force later d/t school requirements.
t/f manual accounting systems use records referred to as ledgers
true
t/f the amount of money owed to a medical practice for service provided today is
entered as a credit in the expense account
false
t/f in double entry accounting, interest paid on a loan is posted as an expense
true
t/f a computerized double entry accounting system will never allow the posting of
a transaction in which the credits and debits do not match
true
in double entry accounting a trial balance is prepared. the expected result is ___
