Test Bank
Gapenski's Fundamentals Of Healthcare Finance,
By Kristin L. Reiter | Paula H. Song
3rd edition
PAGE 1
, Table of contents are given below
The chapters of "gapenski's fundamentals of healthcare finance" (3rd edition) by kristin l. Reiter and paula
h. Song are structured as follows:
Part i: foundation concepts
1. Introduction to healthcare finance
2. Healthcare business basics
3. Paying for health services
Part ii: planning, managing, and control
4. Estimating costs
5. Pricing decisions and profit analysis
6. Planning and budgeting
7. Managing financial operations
Part iii: financing and capital investment decisions
8. Business financing and the cost of capital
9. Capital investment decision basics
10. Project cash flow estimation and risk analysis part
iv: reporting results
11. Reporting profits
12. Reporting assets, financing, and cash flows
13. Assessing financial condition
PAGE 2
,Section 1: introduction to healthcare finance
1. What is the primary goal of healthcare finance?
A) To maximize patient satisfaction
B) To ensure the financial sustainability of healthcare organizations
C) To increase the number of healthcare providers
D) To expand healthcare facilities
Answer: b) to ensure the financial sustainability of healthcare organizations
Explanation: the primary goal of healthcare finance is to manage resources efficiently to ensure that healthcare
organizations remain financially viable while delivering quality care.
2. Which of the following best defines "revenue cycle management" in healthcare?
A) Managing the flow of patients through a facility
B) The process of handling claims from patients to insurers
C) The cycle of investing in new medical technologies
D) The hiring and training of healthcare staff
Answer: b) the process of handling claims from patients to insurers
Explanation: revenue cycle management involves the administration of financial processes related to patient
care, from initial appointment scheduling to the final payment of a balance.
3. What does the term "cost of care" refer to in healthcare finance?
A) The price patients pay for their services
B) The total expenditure incurred by healthcare providers to deliver services
C) The investment in healthcare infrastructure
D) The administrative costs of running a healthcare facility
Answer: b) the total expenditure incurred by healthcare providers to deliver services
Explanation: "cost of care" encompasses all the expenses a healthcare provider incurs to deliver medical
services, including salaries, equipment, and supplies.
4. Which financial statement provides a snapshot of an organization's financial position at a specific point in
time?
A) Income statement
B) Balance sheet
C) Cash flow statement
D) Statement of operations
PAGE 3
, Answer: b) balance sheet
Explanation: a balance sheet displays an organization's assets, liabilities, and equity at a specific moment,
providing insight into its financial health.
5. In healthcare finance, what is "working capital"?
A) The total assets of an organization
B) The difference between current assets and current liabilities
C) The long-term investments of a healthcare provider
D) The capital invested by shareholders
Answer: b) the difference between current assets and current liabilities
Explanation: working capital measures an organization's short-term financial health and its ability to cover
day-to-day operations.
6. Which of the following is a key component of financial management in healthcare?
A) Clinical decision-making
B) Marketing strategies
C) Budgeting and forecasting
D) Patient satisfaction surveys
Answer: c) budgeting and forecasting
Explanation: budgeting and forecasting are essential for planning and controlling financial resources within
healthcare organizations.
7. What is the purpose of financial benchmarking in healthcare?
A) To set clinical performance standards
B) To compare financial performance against industry standards
C) To evaluate patient outcomes
D) To determine staffing needs
Answer: b) to compare financial performance against industry standards
Explanation: financial benchmarking involves comparing an organization's financial metrics to industry
standards or peers to identify areas for improvement.
8. Which concept refers to the allocation of resources to different departments or services within a healthcare
organization?
A) Capital budgeting
B) Resource allocation
PAGE 4
Gapenski's Fundamentals Of Healthcare Finance,
By Kristin L. Reiter | Paula H. Song
3rd edition
PAGE 1
, Table of contents are given below
The chapters of "gapenski's fundamentals of healthcare finance" (3rd edition) by kristin l. Reiter and paula
h. Song are structured as follows:
Part i: foundation concepts
1. Introduction to healthcare finance
2. Healthcare business basics
3. Paying for health services
Part ii: planning, managing, and control
4. Estimating costs
5. Pricing decisions and profit analysis
6. Planning and budgeting
7. Managing financial operations
Part iii: financing and capital investment decisions
8. Business financing and the cost of capital
9. Capital investment decision basics
10. Project cash flow estimation and risk analysis part
iv: reporting results
11. Reporting profits
12. Reporting assets, financing, and cash flows
13. Assessing financial condition
PAGE 2
,Section 1: introduction to healthcare finance
1. What is the primary goal of healthcare finance?
A) To maximize patient satisfaction
B) To ensure the financial sustainability of healthcare organizations
C) To increase the number of healthcare providers
D) To expand healthcare facilities
Answer: b) to ensure the financial sustainability of healthcare organizations
Explanation: the primary goal of healthcare finance is to manage resources efficiently to ensure that healthcare
organizations remain financially viable while delivering quality care.
2. Which of the following best defines "revenue cycle management" in healthcare?
A) Managing the flow of patients through a facility
B) The process of handling claims from patients to insurers
C) The cycle of investing in new medical technologies
D) The hiring and training of healthcare staff
Answer: b) the process of handling claims from patients to insurers
Explanation: revenue cycle management involves the administration of financial processes related to patient
care, from initial appointment scheduling to the final payment of a balance.
3. What does the term "cost of care" refer to in healthcare finance?
A) The price patients pay for their services
B) The total expenditure incurred by healthcare providers to deliver services
C) The investment in healthcare infrastructure
D) The administrative costs of running a healthcare facility
Answer: b) the total expenditure incurred by healthcare providers to deliver services
Explanation: "cost of care" encompasses all the expenses a healthcare provider incurs to deliver medical
services, including salaries, equipment, and supplies.
4. Which financial statement provides a snapshot of an organization's financial position at a specific point in
time?
A) Income statement
B) Balance sheet
C) Cash flow statement
D) Statement of operations
PAGE 3
, Answer: b) balance sheet
Explanation: a balance sheet displays an organization's assets, liabilities, and equity at a specific moment,
providing insight into its financial health.
5. In healthcare finance, what is "working capital"?
A) The total assets of an organization
B) The difference between current assets and current liabilities
C) The long-term investments of a healthcare provider
D) The capital invested by shareholders
Answer: b) the difference between current assets and current liabilities
Explanation: working capital measures an organization's short-term financial health and its ability to cover
day-to-day operations.
6. Which of the following is a key component of financial management in healthcare?
A) Clinical decision-making
B) Marketing strategies
C) Budgeting and forecasting
D) Patient satisfaction surveys
Answer: c) budgeting and forecasting
Explanation: budgeting and forecasting are essential for planning and controlling financial resources within
healthcare organizations.
7. What is the purpose of financial benchmarking in healthcare?
A) To set clinical performance standards
B) To compare financial performance against industry standards
C) To evaluate patient outcomes
D) To determine staffing needs
Answer: b) to compare financial performance against industry standards
Explanation: financial benchmarking involves comparing an organization's financial metrics to industry
standards or peers to identify areas for improvement.
8. Which concept refers to the allocation of resources to different departments or services within a healthcare
organization?
A) Capital budgeting
B) Resource allocation
PAGE 4
