HCA-240 Quiz 1 Solution Manual Graded A+ (Already Passed)
Importance of financial info for investment decisions: - Answers stay in business or close (expansion or
not)
How much U.S. GDP is spent on healthcare? % - Answers 17.7%
How much is 17.7% of the U.S. GDP? - Answers Approx. $3.8 trillion / year
Are healthcare costs the same as health insurance? - Answers NO
What are politicians and media referring to when they speak of healthcare reform? - Answers health
insurance
What is the most common hospital type? - Answers Not-for-profit (NFP)
(ex: community hospital)
How is the efficiency of operations assessed? - Answers output/input or cost of service
(ex: 4.6 nurse work hours, 6.0 staff hours. 4..0 = 0.76. 76% efficiency rate)
What are two main contributors to the Opioid Crisis? - Answers Theft, over-prescribed
Healthcare ________ money when ____________ people. - Answers loses ; treating
How does a health care organization remain fiscally viable even though the government does not 'pay
their fair share'? - Answers Cost-shifting
A short-term source of secure financing - Answers line of credit
What are IO entities? Are they for profit or NFP? - Answers Investor-owned organizations ; for profit
Federal form of organization - Answers Government health care
Shareholders of NFP business-oriented organizations - Answers community
Approx. 80% of hospitals are NFP, but - Answers not the organization or ancillary
A main type of an IO entity - Answers Sole Proprietorships
Examples of publicly traded companies: - Answers Tenet, Banner, CVS, Mayo, Kaiser, etc.
Example of a sole proprietorship - Answers solo practitioner physician
Examples of government healthcare organizations - Answers County hospitals, VA, military
An advantage of NFP Non-business oriented organizations - Answers Tax exempt (Federal and most
state or local, but not all)
, HCO - Answers Health Care Organization
A public source of funds for HCOs - Answers Medicaid, Medicare
Approx. how much of the budget should be spent on salareis? - Answers 60%+
HCOs 'list price' can be found where? - Answers Charge Descriptor Master / Charge Master
Standard billing format (hospitals) - Answers UB-04 (supplies, etc.)
Standard billing format (physicians) - Answers CMS-1500 (hourly rate)
Another name for Capitated Rates - Answers Medi-Share
What are Capitated Rates/ Medi-Share? - Answers Fixed amount of money paid per month, utilization
could fluctuate.
(Like if you go to the gym everyday one month, and two days the next month - you still pay the same
amount each month)
Medicare Prospective Payment System (PPS) - Answers pre-determined rates from CMS
4 main categories of service - Answers Sam, Star, Dog, Cow
Sam - Answers Good Samaritan services. Break-even services.
(Ex: Labor/ Delivery)
Star - Answers Specialized care. Profit services.
(ex: cardio)
Dog - Answers Services that lose money.
(ex: Emergency Room)
Cow - Answers 'Cash cow.' High profit services.
(Ex: cosmetics)
What is included in the General Ledger? - Answers Assets = Equity + Liability
A road map of key financial policy targets established by board of directors is a what? - Answers
Strategic financial plan
When creating a strategic financial plan, what is the profitability objective? - Answers Return on Equity
(ROE)
Typical profit margins - Answers About 4%
Importance of financial info for investment decisions: - Answers stay in business or close (expansion or
not)
How much U.S. GDP is spent on healthcare? % - Answers 17.7%
How much is 17.7% of the U.S. GDP? - Answers Approx. $3.8 trillion / year
Are healthcare costs the same as health insurance? - Answers NO
What are politicians and media referring to when they speak of healthcare reform? - Answers health
insurance
What is the most common hospital type? - Answers Not-for-profit (NFP)
(ex: community hospital)
How is the efficiency of operations assessed? - Answers output/input or cost of service
(ex: 4.6 nurse work hours, 6.0 staff hours. 4..0 = 0.76. 76% efficiency rate)
What are two main contributors to the Opioid Crisis? - Answers Theft, over-prescribed
Healthcare ________ money when ____________ people. - Answers loses ; treating
How does a health care organization remain fiscally viable even though the government does not 'pay
their fair share'? - Answers Cost-shifting
A short-term source of secure financing - Answers line of credit
What are IO entities? Are they for profit or NFP? - Answers Investor-owned organizations ; for profit
Federal form of organization - Answers Government health care
Shareholders of NFP business-oriented organizations - Answers community
Approx. 80% of hospitals are NFP, but - Answers not the organization or ancillary
A main type of an IO entity - Answers Sole Proprietorships
Examples of publicly traded companies: - Answers Tenet, Banner, CVS, Mayo, Kaiser, etc.
Example of a sole proprietorship - Answers solo practitioner physician
Examples of government healthcare organizations - Answers County hospitals, VA, military
An advantage of NFP Non-business oriented organizations - Answers Tax exempt (Federal and most
state or local, but not all)
, HCO - Answers Health Care Organization
A public source of funds for HCOs - Answers Medicaid, Medicare
Approx. how much of the budget should be spent on salareis? - Answers 60%+
HCOs 'list price' can be found where? - Answers Charge Descriptor Master / Charge Master
Standard billing format (hospitals) - Answers UB-04 (supplies, etc.)
Standard billing format (physicians) - Answers CMS-1500 (hourly rate)
Another name for Capitated Rates - Answers Medi-Share
What are Capitated Rates/ Medi-Share? - Answers Fixed amount of money paid per month, utilization
could fluctuate.
(Like if you go to the gym everyday one month, and two days the next month - you still pay the same
amount each month)
Medicare Prospective Payment System (PPS) - Answers pre-determined rates from CMS
4 main categories of service - Answers Sam, Star, Dog, Cow
Sam - Answers Good Samaritan services. Break-even services.
(Ex: Labor/ Delivery)
Star - Answers Specialized care. Profit services.
(ex: cardio)
Dog - Answers Services that lose money.
(ex: Emergency Room)
Cow - Answers 'Cash cow.' High profit services.
(Ex: cosmetics)
What is included in the General Ledger? - Answers Assets = Equity + Liability
A road map of key financial policy targets established by board of directors is a what? - Answers
Strategic financial plan
When creating a strategic financial plan, what is the profitability objective? - Answers Return on Equity
(ROE)
Typical profit margins - Answers About 4%
