HCM EXIT EXAM QUESTIONS AND ANSWERS
Which of the following is NOT a classical insurance principle? - CORRECT ANSWER✅✅The possibility of
moral hazard must exist
Why do physicians like PPOs? - CORRECT ANSWER✅✅There is more control over cost
__________ is often identified as the factor most responsible for demand pull inflation in medical care. -
CORRECT ANSWER✅✅The presence of third party payers
Who provides most long-term care services? - CORRECT ANSWER✅✅(Informal) Family caregivers or
(Formal) CNA's
A cost that has already occurred or irrevocably committed is a: - CORRECT ANSWER✅✅Sunk Cost
What is an example of variable cost? - CORRECT ANSWER✅✅Drugs
Explain the sentence: "In the long-term, all costs are variable". - CORRECT ANSWER✅✅If a company
begins to lose revenue, the company will begin to shed facilities and employees
If the cafeteria has 3,250,000 in overhead costs to be allocated on patient days and patient days are
18,259,000 then the allocation rate is? - CORRECT ANSWER✅✅178
Which of the following is an example of direct healthcare cost? - CORRECT ANSWER✅✅Co-payment
paid to a doctor's office
What two characteristics make a good cost drive? - CORRECT ANSWER✅✅Fairness and cost control
. What are the four steps in the cost allocation process? - CORRECT ANSWER✅✅1. IDENTIFY COST POOL
2. DETERMINE COST DRIVER
3. CALCULATE ALLOCATION RATE
,4. DETERMINE ALLOCATION AMOUNT
A projected cash flow statement uses.. - CORRECT ANSWER✅✅Cash accounting
In accrual accounting, as opposed to cash accounting: - CORRECT ANSWER✅✅Accounts receivable are
recorded
Which of the following is an example of a partnership? Proprietorship? - CORRECT ANSWER✅✅Easy to
start/ Easy to form, subject to few regulations, no income tax
The yield to maturity on a bond is the: - CORRECT ANSWER✅✅Expected rate on return
The coupon rate on a bond is the interest rate you earn on a bond regardless of the price you paid: -
CORRECT ANSWER✅✅False
Which financial statement is a snapshot of the organization's financial picture at one point in time? -
CORRECT ANSWER✅✅Balance Sheet
Which financial statement presents the activity of the business for the previous time period? - CORRECT
ANSWER✅✅Statement of cash flows
Which financial statement shows the company's use and acquisition of funds for a given period of time?
- CORRECT ANSWER✅✅Income statement
Opportunity cost - CORRECT ANSWER✅✅Return of alternative investment of funds
Mrs. Smith purchases taxable bonds that earn 8% interests. If Mrs. Smith's tax rate is 28%, what is the
interest's rate? - CORRECT ANSWER✅✅5.76%
Mrs. Smith purchases taxable bonds that earn 9% interests. If Mrs. Smith's tax rate is 28%, what is the
interest's rate? - CORRECT ANSWER✅✅6.48%
, What is the primary reason for quality management? - CORRECT ANSWER✅✅Continuous improvement
What are the common components of quality management? - CORRECT ANSWER✅✅Measurement,
assessment, and improvement
Measure that could be used by a rehabilitation facility to evaluate the STRUCTURAL aspects - CORRECT
ANSWER✅✅Number of certified nursing assistants on each shift
Percentage of patients who develop deep vein thrombosis following a surgical procedure - CORRECT
ANSWER✅✅Outcome measure
A PROCESS measure of performance for a hospital emergency department - CORRECT
ANSWER✅✅Percent of time staff confirm patient ID before giving medication
For the performance measure, "Percent of staff who comply with hand hygiene requirements" what
population would be included in the numerator? - CORRECT ANSWER✅✅Number of staff observed in
compliance with hand hygiene requirements.
A PROCESS measure that could be used by a family practice clinic to evaluate the quality of care
provided to adult patients with asthma. - CORRECT ANSWER✅✅Percent of patients that receive
instructions in the use of their medications
What are two types of variations in quality management? - CORRECT ANSWER✅✅Common cause
variation (predictable) and Special cause variation (Abnormal and not predictable).
The law of demand - CORRECT ANSWER✅✅States that if all else is equal (ceteris paribus), as price falls,
the quantity demanded rises, and as price rises, the quantity demanded falls.
Product A raises the price of their product by 4% and sales decline by 4%. Sales of product B also
decrease by 3%. Are products A and B complements or substitutes? - CORRECT
ANSWER✅✅Complements
Which of the following is NOT a classical insurance principle? - CORRECT ANSWER✅✅The possibility of
moral hazard must exist
Why do physicians like PPOs? - CORRECT ANSWER✅✅There is more control over cost
__________ is often identified as the factor most responsible for demand pull inflation in medical care. -
CORRECT ANSWER✅✅The presence of third party payers
Who provides most long-term care services? - CORRECT ANSWER✅✅(Informal) Family caregivers or
(Formal) CNA's
A cost that has already occurred or irrevocably committed is a: - CORRECT ANSWER✅✅Sunk Cost
What is an example of variable cost? - CORRECT ANSWER✅✅Drugs
Explain the sentence: "In the long-term, all costs are variable". - CORRECT ANSWER✅✅If a company
begins to lose revenue, the company will begin to shed facilities and employees
If the cafeteria has 3,250,000 in overhead costs to be allocated on patient days and patient days are
18,259,000 then the allocation rate is? - CORRECT ANSWER✅✅178
Which of the following is an example of direct healthcare cost? - CORRECT ANSWER✅✅Co-payment
paid to a doctor's office
What two characteristics make a good cost drive? - CORRECT ANSWER✅✅Fairness and cost control
. What are the four steps in the cost allocation process? - CORRECT ANSWER✅✅1. IDENTIFY COST POOL
2. DETERMINE COST DRIVER
3. CALCULATE ALLOCATION RATE
,4. DETERMINE ALLOCATION AMOUNT
A projected cash flow statement uses.. - CORRECT ANSWER✅✅Cash accounting
In accrual accounting, as opposed to cash accounting: - CORRECT ANSWER✅✅Accounts receivable are
recorded
Which of the following is an example of a partnership? Proprietorship? - CORRECT ANSWER✅✅Easy to
start/ Easy to form, subject to few regulations, no income tax
The yield to maturity on a bond is the: - CORRECT ANSWER✅✅Expected rate on return
The coupon rate on a bond is the interest rate you earn on a bond regardless of the price you paid: -
CORRECT ANSWER✅✅False
Which financial statement is a snapshot of the organization's financial picture at one point in time? -
CORRECT ANSWER✅✅Balance Sheet
Which financial statement presents the activity of the business for the previous time period? - CORRECT
ANSWER✅✅Statement of cash flows
Which financial statement shows the company's use and acquisition of funds for a given period of time?
- CORRECT ANSWER✅✅Income statement
Opportunity cost - CORRECT ANSWER✅✅Return of alternative investment of funds
Mrs. Smith purchases taxable bonds that earn 8% interests. If Mrs. Smith's tax rate is 28%, what is the
interest's rate? - CORRECT ANSWER✅✅5.76%
Mrs. Smith purchases taxable bonds that earn 9% interests. If Mrs. Smith's tax rate is 28%, what is the
interest's rate? - CORRECT ANSWER✅✅6.48%
, What is the primary reason for quality management? - CORRECT ANSWER✅✅Continuous improvement
What are the common components of quality management? - CORRECT ANSWER✅✅Measurement,
assessment, and improvement
Measure that could be used by a rehabilitation facility to evaluate the STRUCTURAL aspects - CORRECT
ANSWER✅✅Number of certified nursing assistants on each shift
Percentage of patients who develop deep vein thrombosis following a surgical procedure - CORRECT
ANSWER✅✅Outcome measure
A PROCESS measure of performance for a hospital emergency department - CORRECT
ANSWER✅✅Percent of time staff confirm patient ID before giving medication
For the performance measure, "Percent of staff who comply with hand hygiene requirements" what
population would be included in the numerator? - CORRECT ANSWER✅✅Number of staff observed in
compliance with hand hygiene requirements.
A PROCESS measure that could be used by a family practice clinic to evaluate the quality of care
provided to adult patients with asthma. - CORRECT ANSWER✅✅Percent of patients that receive
instructions in the use of their medications
What are two types of variations in quality management? - CORRECT ANSWER✅✅Common cause
variation (predictable) and Special cause variation (Abnormal and not predictable).
The law of demand - CORRECT ANSWER✅✅States that if all else is equal (ceteris paribus), as price falls,
the quantity demanded rises, and as price rises, the quantity demanded falls.
Product A raises the price of their product by 4% and sales decline by 4%. Sales of product B also
decrease by 3%. Are products A and B complements or substitutes? - CORRECT
ANSWER✅✅Complements
