Healthcare Management Ethics and Principles, Exams of Financial Accounting

Download Healthcare Management Ethics and Principles and more Exams Financial Accounting in PDF only on Docsity! According to the ACHE's Code of Ethics, one way that healthcare executives can avoid or minimize the negative implications of conflict of interest is to: a. Develop a public relations plan to address potential conflict-of-interest scenarios. b. Not participate in the specific decision where conflict may exist. c. Ensure members submit annual lists of major activities and holdings for inspections. d. Make the conflict known to those in superior positions. - Correct Answer: d. Make the conflict known to those in superior positions The principles of quality improvement require that healthcare executives change their management philosophy from: a. Finding fault with employees to finding problems in processes. b. Finding fault with employees to involving them in the improvement of processes. c. Focusing on enhanced inspection techniques to focusing on variance. d. Focusing on employees' roles to focusing on process outcomes. - Correct Answer: a. Finding fault with employees to finding problems in processes. What type of problem arises when a healthcare executive knowingly allows the organization to continue double billing? a. An ethical problem for the healthcare executive, but may not be grounds for dismissal if organizational policy is not clearly stated. b. An actual conflict of interest, even absent a direct economic benefit to the healthcare executive. c. An ethical problem for the employee if the healthcare executive receives direct economic benefit. d. An ethical problem if it clearly violates state or federal law. - Correct Answer: b. An actual conflict of interest, even absent a direct economic benefit to the healthcare executive. Which of the following is a unit of measure commonly used to determine physicians' clinical productivity? a. RVU BOG Practice Exam – FACHE Questions and Correct Answers b. CMS c. IPO d. CPU - Correct Answer: a. RVU Which of the following third-party reimbursement methods provides the largest financial incentive for the provider to reduce cost? a. Charge-based b. Cost-based c. Prospective payment d. Per diem - Correct Answer: c. Prospective payment Statements of earnings, financial positions, changes in financial position and retained earnings are required to be submitted yearly by all: a. Publicly owned healthcare organizations. b. Privately owned healthcare organizations. c. Government owned healthcare organizations. d. Faith-based owned healthcare organizations. - Correct Answer: a. Publicly owned healthcare organizations. Which of the following is an Example of a capital expenditure? a. Land that is purchased for resale. b. Surgical equipment with a useful life of six months. c. A building with a useful life of 20 years. d. Medical supplies used for patient care. - Correct Answer: c. A building with a useful life of 20 years. What is the correct order of stages for accomplishing organization change? a. Identifying, planning, implementation, evaluation. b. Planning, identifying, evaluation, implementation. c. Evaluation, planning, implementation, identifying. c. Identifying markets, promoting the organization, managing external relationship, convincing patients to select the organization, attracting capable workers. d. Identifying markets, promoting the organization, managing external relationships, strategic planning, physician recruitment. - Correct Answer: c. Identifying markets, promoting the organization, managing external relationship, convincing patients to select the organization, attracting capable workers. Forecasting organizational need for human resources by focusing on specific position openings that are likely to occur and using these for planning is called: a. Demand-pull approach. b. Supply-push approach. c. Succession analysis. d. Transition matrix. - Correct Answer: a. Demand-pull approach. A health services organization should use which of the following sequential processes to help establish human resources (HR) objectives and policies? a. Analyze the current HR situation, forecast HR demand, reconcile with the budget, forecast HR supply. b. Design HR recruitment and selection activities, develop an HR compensation plan, and establish HR appraisal systems. c. Determine best HR job structure, perform HR job evaluations, establish HR training and development plan. d. Conduct HR job analysis, determine best HR job structure, and establish HR information system. - Correct Answer: a. Analyze the current HR situation, forecast HR demand, reconcile with the budget, forecast HR supply. Probability models that forecast the internal flow of employees from one job category to another use a: a. Graphic rating approach. b. Supply-push approach. c. Transition matrix. d. Curriculum path. - Correct Answer: c. Transition matrix. Forecasting the internal supply of employees as they move from their current jobs into others through promotions, lateral moves and terminations is called: a. Graphic rating approach. b. Supply-push approach. c. Demand-pull approach d. Rating scale method. - Correct Answer: b. Supply-push approach. Which of the following describes the conflict management strategy that would have the most immediate effect on reducing conflict behavior? a. Imposition of formal authority to resolve or suppress conflict. b. Implementation of substantial, super-ordinate goals that require cooperation among units. c. Rotation of members of one unit into another unit. d. Provision of intergroup training that requires listing of perceptions and identifying differences. - Correct Answer: a. Imposition of formal authority to resolve or suppress conflict. Multi-rater assessment (360 degrees feedback) of managers in healthcare organizations is best used: a. In the development of a specific action plan by appraises. b. As part of a training or coaching session. c. As part of the performance appraisal system of the organization. d. When the appraisers are held accountable for their ratings. - Correct Answer: a. In the development of a specific action plan by appraises. Behaviorally anchored rating scales (BARS) for specific jobs can be: a. Used to identify components of job behaviors. b. Developed in a short period of time. c. Used for evaluation but not for employee development. d. Subjective on some scale items. - Correct Answer: a. Used to identify components of job behaviors. If the amount of charity care increased from one reporting period to the next, which of the following would occur? a. Provision for bad debts would increase. b. Unrestricted net assets would increase. c. Unrestricted net assets would neither, increase or decrease. d. Unrestricted net assets would decrease. - Correct Answer: d. Unrestricted net assets would decrease. Which would be a reasonable basis on which to allocate administrative overhead costs? a. Salaries. b. Amount of supplies used. c. Hours worked. d. Square footage. - Correct Answer: b. Amount of supplies used. The effective cost of debt is roughly the same for both not-for-profit and investor-owned organizations because: a. Both types of organizations can issue tax-exempt debt. b. The interest rate is the same on both tax-exempt and regular debt. c. Neither type of organization can issue tax-exempt debt. d. The tax deductibility of interest for investor-owned firms offsets the lower coupon rate on tax- exempt debt. - Correct Answer: d. The tax deductibility of interest for investor-owned firms offsets the lower coupon rate on tax-exempt debt. The master site plan (or master facility plan) for a healthcare organization: a. Describes future facility needs (either renovation or new construction) necessary to meet strategic and operational needs. b. Provides detailed design documents for all construction programs along with specific costs for each project. c. Must be prepared by an outside planning or architectural firm to ensure sufficient objectivity. d. Is necessary to ensure that the organization complies with certificate of need and other regulatory requirements. - Correct Answer: a. Describes future facility needs (either renovation or new construction) necessary to meet strategic and operational needs Which of the following is an Example of an asset? a. Accounts payable. b. Accrued employee benefits. c. Property, plant and equipment d. Unrealized gain. - Correct Answer: c. Property, plant and equipment Which statement about short-term debt reduces liquidity? a. Increased use of short-term debt reduces liquidity. b. Short-term debt provides greater certainty about interest costs over time c. The interest rates for short-term debt are typically higher than interest rates for long-term debt. d. An organization that relies on short-term debt replaces the need for working capital. - Correct Answer: a. Increased use of short-term debt reduces liquidity. Which of the following is likely to provide useful information for evaluating the profitability of a hospital's managed care business? a. Payor mix. b. Fixed. c. Contract terms. d. Changes. - Correct Answer: d. Changes. A master patient index (MPI) can best be described as: a. A relational database containing all identification numbers assigned to patients. b. A system for converting social security numbers to medical record numbers. c. A system for converting medical record numbers to patient account numbers. d. A longitudinal record of all patient encounters for a fixed period of time. - Correct Answer: a. A relational database containing all identification numbers assigned to patients. A typical use of the Internet by healthcare organizations is to: a. Deliver educational programs to employees. b. Provide the medical staff with electronic access to patient records. c. Advertise services available to the community. d. Communicate financial information to business units of the organization. - Correct Answer: c. Advertise services available to the community. The best way to facilitate information system integration within a healthcare organization is to: a. Centralize all computer activities. b. Use computer equipment from only one manufacturer. c. Use computer software from only one vendor. d. Standardize data definitions and data structures. - Correct Answer: d. Standardize data definitions and data structures. Which of the following is a developing technology that will help control unauthorized access to computerized information? a. Optical scanners. b. Biometric access control devices. c. Wireless terminals. d. High-speed modems. - Correct Answer: b. Biometric access control devices. In negotiating a contract for an information system, healthcare organizations should: a. Form a negotiating team and utilize legal counsel. b. Use the standard contract provided by the system vendor. c. Employ a consultant from among a list provided by the vendor. d. Use a cost-plus contract to maximize flexibility in system design - Correct Answer: a. Form a negotiating team and utilize legal counsel. Which of the following is the most important factor to consider in evaluating vendor software packages? a. Size of the vendor's marketing staff. b. Ability of the software to interface with existing systems. c. Programming language used to write the software. d. Geographic location of the vendor's corporation office - Correct Answer: b. Ability of the software to interface with existing systems. The CIO for a healthcare organization is typically responsible for which of the following functions? a. Information systems and finance. b. Medical Records and patient registration c. Telecommunications and public relations. d. Information systems and telecommunications. - Correct Answer: d. Information systems and telecommunications. In selecting an information system, a consultant can best be used to: a. Chair the selection committee. b. Make the final selection decision. c. Provide technical information and an outside prospective. d. Handle all communications and prospective vendors. - Correct Answer: c. Provide technical information and an outside prospective. The Information Systems Steering Committee for a healthcare organization should perform which of the following duties? a. Information systems planning, selection of software and development of related organizational policies. b. Selection and supervision of key information systems personnel. c. Negotiation of contracts with vendors for equipment, software and service. Continuous quality improvement assumes that: a. Achievement will be rewarded. b. There is direction from top management. c. There is no upper limit to excellence. d. Interconnected work teams are in place. - Correct Answer: c. There is no upper limit to excellence. Which of the following best describes the responsibility of a hospital with an emergency department (ED) when a person comes to the ED for Examination or treatment? a. The hospital must admit the patient for observation and treatment if an emergency condition exists. b. The hospital must provide an appropriate medical screening to determine whether an emergency condition exists and, if so, stabilize the condition. c. The hospital may inquire as to the individual's method of payment or insurance status prior to rendering services. d. If the individual is uninsured, the hospital must transfer the patient to the nearest public hospital designated for the care and treatment of medically indigent persons. - Correct Answer: b. The hospital must provide an appropriate medical screening to determine whether an emergency condition exists and, if so, stabilize the condition. What was the first major law to have a significant impact on individual privacy in the workplace? a. Civil Rights Act b. Fair Credit Reporting Act c. Polygraph Protection Act d. Privacy Act - Correct Answer: a. Civil Rights Act How does physician self-referral or Stark laws apply to Medicare payments? a. The law applies to private party insurance and does not apply to Medicare payments. b. The law establishes an additional payment to the normal Medicare payment fees due to the added complexity of referrals. c. The law allows a claim to be filed with Medicare for a service provided by a physician who has a financial interest in the DHS. d. The law prohibits a provider from presenting a claim to Medicare or to any person or other entity for a prohibited DHS referral. - Correct Answer: d. The law prohibits a provider from presenting a claim to Medicare or to any person or other entity for a prohibited DHS referral. Which of the following is not an advantage of an effective Corporate Compliance Program for a healthcare organization? a. Initiating immediate and appropriate corrective actions. b. Costs of implementation and operations. c. Developing processes to allow employees to report potential problems d. Identifying and preventing criminal and unethical conduct. - Correct Answer: b. Costs of implementation and operations. A privilege of confidentiality exists in a physician-patient relationship when the physician-acquired information is: a. Documented in the patient's medical records. b. Substantiated by the patient's nurse. c. Related to the care and treatment of the patient. d. Confirmed and documented by the patient. - Correct Answer: c. Related to the care and treatment of the patient. Participating providers in the federal Medicare program must: a. Be accredited by the Joint Commission. b. Serve Medicaid beneficiaries. c. Meet the Conditions of Participation. d. Be in compliance with state Certificate of Need laws. - Correct Answer: c. Meet the Conditions of Participation. Which physician organization is responsible for accrediting residency training programs? a. ACGME b. AAMC c. CAT d. BPQA - Correct Answer: a. ACGME Which of the following are important aspects to consider when establishing a joint venture? a. Joint ventures involve independent management teams and independent governance structures. b. Joint ventures involve capital investment by all parties, can be difficult to dissolve, and are usually expected to be permanent. c. Joint ventures are managed like an internal organization and are usually renegotiated annually. d. Joint ventures are developed to acquire portions of the parent organizations and are generally accepted as irreversible. - Correct Answer: b. Joint ventures involve capital investment by all parties, can be difficult to dissolve, and are usually expected to be permanent. A balanced scorecard is a set of performance measurements used to: a. Assess patient satisfaction. b. Ensure the organization does not exceed one performance metric at the expense of another. c. Provide a scorecard for annual performance monitoring. d. Gather and monitor financial data. - Correct Answer: b. Ensure the organization does not exceed one performance metric at the expense of another. What is the correct order, from bottom to top, of Maslow's Hierarchy of Needs? a. Physiological, safety, esteem, belonging, self-actualization. b. Safety, physiological, belonging, esteem, self-actualization. c. Physiological, safety, belonging, esteem, self-actualization. d. Safety, esteem, physiological, belonging, esteem, self-actualization. - Correct Answer: c. Physiological, safety, belonging, esteem, self-actualization. Communication Health Intranet Networks (CHINs) were developed for what purpose? Performance improvement teams should consist of: a. Experts in process management. b. Members from the involved Microsystems. c. Middle managers with experience. d. Physicians and other users. - Correct Answer: b. Members from the involved Microsystems. The four important aspects of clinical support services are technical quality, patient satisfaction, continuity or integration, and: a. Cost-benefit analysis. b. Outcome. c. Appropriateness. d. Health promotion. - Correct Answer: c. Appropriateness. A bar chart format, with the items rank ordered on a dependent variable, such as cost, profit, or satisfaction that Examines the components of a problem in terms of their contribution to it is known as: a. A run chart. b. A frequency table. c. Pareto analysis. d. Deming cycle. - Correct Answer: c. Pareto analysis Governing boards are typically more effective at what size? a. 10 to 15 members. b. 15 to 25 members. c. 5 to 10 members. d. More than 25 members. - Correct Answer: a. 10 to 15 members. What type of review involves evaluation of management staff by their superiors, subordinates, and internal and external customers? a. Annual review. b. 360-degree review. c. Competency review. d. Peer review. - Correct Answer: b. 360-degree review. The role of a not-for-profit healthcare organization's governing board includes all of the following except: a. Delineate clinical privileges. b. Ensuring that quality healthcare is delivered. c. Overseeing the day to day operations. d. Setting broad institutional policy. - Correct Answer: c. Overseeing the day to day operations. Medicare Conditions of Participation for hospitals require that a prescribing practitioner authenticate a verbal order within , if not defined by the state. a. 24 hours. b. 48 hours. c. 7 days. d. 30 days. - Correct Answer: b. 48 hours. Cost accounting is an important tool which enables the CFO to: a. Meet Joint Commission fiscal requirements. b. Ensure supplies are competitively purchased. c. Determine the actual cost of providing patient care. d. Improve revenue cycle returns. - Correct Answer: c. Determine the actual cost of providing patient care. What is true about the relationship between acute care hospitals and longterm care organization? a. Hospitals and patients frequently have difficulty arranging for nursing home care services. b. Hospitals generally do not want to refer patients to nursing homes since part of the patient care revenue must be shared. c. Nursing homes generally do not want to refer patients to hospitals since this interferes with state or federal length-of stay requirements. d. Nursing homes are generally thought to be superior to hospitals at chronic disease management. - Correct Answer: a. Hospitals and patients frequently have difficulty arranging for nursing home care services. The first step in any strategic management scenario planning is to: a. Develop "what if" scenarios b. Gather information from as many sources as possible. c. Develop courses of action that fit within future organizational resources. d. Conduct a make vs. buy analysis. - Correct Answer: b. Gather information from as many sources as possible. Which of the following is the least serious limitation to decision analysis? a. Oversimplifying the problem. b. Inadequate data. c. The decision maker's values. d. The statistical model. - Correct Answer: d. The statistical model. In a unionized organization, what is the most effective contract dispute resolution finalization alternative? a. Mediation. b. Corporate Campaigns. c. Arbitration. d. Strike. - Correct Answer: c. Arbitration. What does a liquidity ratio measure? a. A firm's ability to meet its current obligations in a timely manner. b. Size of dividends to be paid to shareholders. c. The percent of total funds provided by creditors. Determining whether the help desk function is effective and whether projects are well managed are examples of measuring an information system department's: a. Strategic competency. b. Political competency. c. Vendor competency. d. Operational competency. - Correct Answer: d. Operational competency. When seeking information about fixed assets, payroll, regulatory and tax reporting, and accounts payable, an administrator will access what information management system? a. Physician practice management. b. Patient administration and management. c. Home health management. d. General financial management. - Correct Answer: d. General financial management. The main role of the board is: a. Selecting the CEO. b. Overseeing operations. c. Setting institutional policy. d. Running the institution in the absence of the CEO. - Correct Answer: c. Setting institutional policy. Which of the following is not considered part of the labor budget? a. Staff salaries. b. Hourly wages. c. Employee benefits. d. Contract staff expenses. - Correct Answer: d. Contract staff expenses. Health Savings Accounts (HSAs), were established through which law? a. Consolidated Omnibus Budget Reconciliation Act b. Medicare Prescription Drug Improvement and Modernization Act c. Health Insurance Portability and Accountability Act d. Americans with Disabilities Act - Correct Answer: b. Medicare Prescription Drug Improvement and Modernization Act The only law that mandates a particular type of payment for time not worked. a. FMLA b. EMTALA c. ADA d. CMS - Correct Answer: a. FMLA Which position is included in the NRLB Bargaining rules? a. Physician independent contractor b. Nurse supervisors c. Pharmacists. d. Certified accountants - Correct Answer: c. Pharmacists. One method for evaluating relative value of different jobs is: a. Broad banding. b. Gant charting. c. Scalability. d. Benchmarking. - Correct Answer: d. Benchmarking. When discharging a patient from a hospital, the institution can be held liable: a. For providing post-discharge medications for ongoing care. b. If the patient uses public transportation after discharge and is involved in an accident resulting in injuries. c. For abandoning the patient if the patient is in need of further medical care. d. When patients are transferred to a less costly setting where adequate care can be provided. - Correct Answer: c. For abandoning the patient if the patient is in need of further medical care. Under the Emergency Medical Treatment and Active Labor Act (EMTALA): a. Benefits only those who are uninsured and unable to pay. b. Originated due to concerns of patient dumping. c. Excludes women in active labor. d. Does not require facility to forward medical records to the second facility. - Correct Answer: b. Originated due to concerns of patient dumping. Which of the following health maintenance organization models exerts maximum control over physician providers? a. Closed panel. b. Open panel. c. Network. d. Point of service. - Correct Answer: a. Closed panel. What is generally prohibited by Stark II Laws? a. A hospital paying a physician for admissions. b. A physician receiving payment from another physician for a referral. c. A physician referring a patient to a service owned by the physician. d. A hospital referring a patient to its own home health agency. - Correct Answer: c. A physician referring a patient to a service owned by the physician. Under HIPAA, Congress required the Secretary of HHS to adopt standards to: a. Create Pay-for-Performance Standards for CMS. b. Provide for standard data elements and code sets. c. Require electronic health records by 2010. a. The board. b. The medical staff. c. The board executive committee. d. The medical staff executive committee. - Correct Answer: a. The board. Which of the following courts is often given jurisdiction to hear cases involving such matters as surgery for an incompetent person or the involuntary commitment of a mentally ill person? a. Family court. b. Juvenile court. c. Appellate court. d. Probate court. - Correct Answer: d. Probate court. To guard against the loss of assets, an administrator should do which of the following? a. Encourage off-site storage of equipment. b. Allow service directors to determine the frequency of asset inventories. c. Ensure that billing and collections are handled by the same team. d. Implement detailed procedures, risk control and annual outside audits. - Correct Answer: d. Implement detailed procedures, risk control and annual outside audits. A food service director is assigned responsibility for environmental services. This is an Example of: a. Redundant management. b. Matrix management. c. Oversight management. d. Service line management. - Correct Answer: b. Matrix management. Which of the following management styles allows the highest subordinate freedom and lowest personal authority? a. Autocratic. b. Participative. c. Democratic. d. Laissez-faire. - Correct Answer: d. Laissez-faire. Under the regulations of the IRS, a tax exempt entity: a. Must provide a private benefit to those institutions operating or affiliated with the entity. b. Must limit the benefit to any private individual. c. Must provide a public benefit to the community. d. Can minimize penalties if it limits private benefits to less than 50%. - Correct Answer: c. Must provide a public benefit to the community. Network of hospitals, physicians and other healthcare providers that provide services for a negotiated fee are called: a. HMOs. b. PSOs. c. PPOs. d. MSOs. - Correct Answer: c. PPOs. The practice of a provider seeing a patient more often than is medically necessary, primarily to increase revenue through an increased number of services, is called: a. Cost shifting. b. Buffering. c. Turfing. d. Churning. - Correct Answer: d. Churning. Which of the following regulations exempted self-funded employer sponsored health insurance plans from state insurance regulation? a. BBA b. TEFRA c. COBRA d. ERISA - Correct Answer: d. ERISA Hospitals that were acquired by hospital systems generally have which characteristic? a. They operate at a net gain. b. They incur higher debt levels. c. They are located in markets with a smaller number of HMOs. d. They are younger, not-for-profit hospitals with higher occupied beds. - Correct Answer: b. They incur higher debt levels. Hospitals known for their ability to attract and retain nurses despite the significant nursing shortages are called: a. Professional excellence centers. b. Shared Governance facilities. c. Magnet hospitals. d. Baldrige award winners. - Correct Answer: c. Magnet hospitals. The reimbursement method that was first adopted by Medicare and later by most third party payers is known as: a. ICD-9. b. RBRVS. c. RUG. d. DRG. - Correct Answer: d. DRG. The principal goal of a Health Service Organization's medical/hospital model is a. Security. b. Disease treatment. c. Quality of life. d. Comfort. - Correct Answer: b. Disease treatment. Which segment of the healthcare delivery system is exclusively dedicated to terminally ill patients? a. The medical staff appointments are exempt from antitrust litigation. b. They are subject to antitrust law relative to price fixing and boycotts. c. They are exempt from most antitrust principles because they are "charitable." d. They are subject to antitrust law, just as any other industry is. - Correct Answer: d. They are subject to antitrust law, just as any other industry is. Which of the following best summarizes the legal status of the physician patient relationship? a. It is based on an expressed or implied contract, from which certain elements of duty arise. b. It is based on acceptance of remuneration for services rendered unless charity care is designated. c. It has no legal status in that it is a private business relationship, unless the patient is a Medicare beneficiary. d. It is governed by the hospital or health system's medical staff bylaws. - Correct Answer: a. It is based on an expressed or implied contract, from which certain elements of duty arise. A major advantage of capitation for primary care gatekeepers is it: a. Guarantees primary care physicians will make more money than they ever made in fee-for-service. b. Encourages primary care physicians to be more judicious in their referrals to specialists. c. Elevates the primary care physician's status in the eyes of his/her patients. d. Makes it easier for health plans to collect utilization data from physicians. - Correct Answer: b. Encourages primary care physicians to be more judicious in their referrals to specialists. Bundled pricing (paying a single fee for all services) for such services as total hip replacement or coronary artery bypass surgery affects physician hospital relationships by: a. Reducing the need to devote administrative effort to measuring outcomes and performance indicators. b. Putting the physician and hospital at each other's throat fighting over the distribution of the fee c. Promoting efforts to collaborate and integrate efforts to provide more efficient care. d. Guaranteeing that only top quality physicians will be allowed to participate in such programs. - Correct Answer: c. Promoting efforts to collaborate and integrate efforts to provide more efficient care. A healthcare executive is serving on the board of a community mental health center. The mental health center board is evaluating proposals for inpatient psychiatric services. Proposals were received from the executive's facility and several other facilities. The healthcare executive should: a. Participate in the discussion and the vote if the benefits to the community outweigh possible conflicts of interest. b. Not participate in the discussion or the vote. c. Declare a potential conflict-of-interest and excuse himself or herself from participating in both the discussion and the vote. d. Participate in the discussion but not vote on the proposals. - Correct Answer: d. Participate in the discussion but not vote on the proposals. What is a primary reason for conducting continuing education for staff? a. Staff will think the organization cares about them. b. There are significant short-term operating efficiencies. c. It is a long-term commitment to the patient. d. The Joint Commission and NCQA required it. - Correct Answer: c. It is a long-term commitment to the patient. What is the first effect of demographic trends on a health services organization's strategic planning process? a. Appraising financing sources and payment levels for programs. b. Establishing future staff by type and estimating staffing levels. c. Determining the locations of delivery units for the next period. d. Determining the range and types of services to be offered. - Correct Answer: d. Determining the range and types of services to be offered. Managers who use their authority to greatly enhance their salaries, benefits, and accoutrements of office may be causing a disbenefit to patients. This personal aggrandizement is known as self dealing and can: a. Be seen most commonly in for-profit HMOs. b. Occur only in for-profit organizations. c. Occur in any health service organization. d. Be seen only in non-health services field charities. - Correct Answer: c. Occur in any health service organization. The primary stimuli that causes educational programs to be made available to and required of staff are the: a. Legal demands resulting from medical malpractice. b. Regulations issued by governments at all levels. c. Demands and expectations of stakeholders. d. Increasingly stringent expectations of consumers. - Correct Answer: c. Demands and expectations of stakeholders. Research in behavioral science has consistently found that once basic needs are met, staff is motivated most: a. By an incentive payment program. b. Only by a significant increase in salary. c. By factors such as being kept informed. d. When performance sets them apart from the group. - Correct Answer: c. By factors such as being kept informed. Resource allocation in health services organizations involves balancing the needs of organization, staff, and patients. However, the essential primary focus on patients can be met only if the: a. Strategic planning process has been effective and thorough. b. Mission and vision statements are appropriate to the task. c. Organizational culture makes a basic commitment to it. d. Basic needs of the organization and staff are addressed first. - Correct Answer: d. Basic needs of the organization and staff are addressed first. Which of the following best describes a healthcare organization's recognized service reputation that has been earned over the long-term within its market? a. Soft assets. Healthcare organizations are routinely faced with accommodating competing space needs. The key considerations in resolving such issues should be based upon which of the following? a. Long-range facility plan. b. Return on investment for each use. c. Prospective donor's interest in the program. d. Board of trustee preference. - Correct Answer: a. Long-range facility plan. Information systems management security is concerned with the policies and procedures for ensuring the security of: a. Data. b. Software. c. Hardware. d. Firmware. - Correct Answer: a. Data. A patient files a complaint relating to a negative hospital experience. The proper handling of this patient's complaint is to: a. Cite organizational policy. b. Side against the organization. c. Minimize the complaint. d. Clarify the problem. - Correct Answer: d. Clarify the problem. The single most important way patients can help prevent medical errors from affecting them is to: a. Interact with their caregivers. b. Research medical error rates among organizations. c. Read and understand consent forms. d. Choose large, reputable healthcare providers. - Correct Answer: a. Interact with their caregivers. In a hospital setting, a critical pathway is best described as: a. A document that focuses on efficiency and describes a standard set of activities to be performed for a defined category of patients. b. A set of guidelines that focus on identifying those decision points which should lead to the consistent provision of appropriate clinical practice. c. Any attempt to standardize clinical activities based upon diagnostic categories and projected outcomes. d. Decision tree that focuses on physician decision making. - Correct Answer: a. A document that focuses on efficiency and describes a standard set of activities to be performed for a defined category of patients. One reason healthcare entities should document their credentialing procedures is to: a. Meet federal compliance mandates. b. Maximize medical staff understanding of the process. c. Minimize inconsistency and liability. d. Assist with practitioner auditing. - Correct Answer: c. Minimize inconsistency and liability. One feature that distinguishes nonintegrated healthcare organizations from integrated organizations is a: a. Regional community vision. b. Widely accepted brand identity. c. Seamless continuum of care. d. Define market image. - Correct Answer: d. Define market image. Hospitals pursuing strategic alliances are faced with issues of vertical integration. One Example of vertical integration is: a. Acquiring a long-term care facility. b. Creating a "super" physician-hospital organization. c. Developing a system of local hospitals. d. Outsourcing laboratory services. - Correct Answer: a. Acquiring a long-term care facility. Governance challenges faced by fully integrated healthcare delivery systems are more complex than those faced by nonasset merged multihospital systems because: a. The components of integrated systems function in a highly interdependent manner. b. Multi-hospital systems usually have been in existence for a long time. c. Multi-hospital systems often have an independent governance structure. d. Boards of multi-hospital systems have a different board selection process. - Correct Answer: a. The components of integrated systems function in a highly interdependent manner. The purpose of the ACHE Ethics Committee is to review and recommend action on ethical violations to which group? a. Executive Committee. b. Board of Governors. c. Council of Regents. d. Membership Committee. - Correct Answer: b. Board of Governors. According to the ACHE Code of Ethics, what action can the Ethics Committee take against an affiliate after a grievance procedure has been initiated? a. Fine the affiliate. b. Report the violation to the affiliate's employer. c. Issue a written reprimand to the affiliate. d. Recommend expulsion of the affiliate. - Correct Answer: d. Recommend expulsion of the affiliate. ACHE's Ethical Policy Statement on Ethical Issues Related to Downsizing recommends that healthcare executives should consider providing which of the following when downsizing? a. Financial aid. b. Child care. c. Family counseling d. Out-placement assistance. - Correct Answer: d. Out-placement assistance. a. Number of years to recover the original investment. b. Discounted future cash flows. c. Discount rate at which the net present value is zero. d. Discount rate that the firm uses in computing the cost of capital. - Correct Answer: c. Discount rate at which the net present value is zero. The Statement of Cash Flows is typically organized into three sections: Cash Flow From Operations; Cash Flow From Investing Activities; and Cash Flow From: a. Bad Debt Recovery. b. Regulatory Recapture. c. Financing Activities. d. Donations & Foundation Support. - Correct Answer: c. Financing Activities. Which of the following combines data from a balance sheet and an income statement to create a single number that facilitates easy interpretation? a. Financial ratio analysis. b. Acid test ratio. c. Operating margin ratio. d. Cash flow analysis. - Correct Answer: a. Financial ratio analysis. In a healthcare organization, who has ultimate fiduciary responsibility? a. Chief financial officer b. Board of directors. c. Medical staff officers. d. Senior management. - Correct Answer: b. Board of directors. Medicare DRG payment is highly dependent upon a hospital's case mix index. This index represents the average relative weight for all Medicare patients treated in a: a. Specific nursing unit or specialty area. b. Specific period. c. Common geographic market. d. Specific facility. - Correct Answer: b. Specific period. If a CEO wanted to look at a "snapshot" of the financial condition of the healthcare organization, he/she would review which of the following? a. Income Statement. b. Balance Sheet. c. Retained Earnings Statement. d. Investment Portfolio. - Correct Answer: b. Balance Sheet. Where should charity care be shown in a healthcare organization's financial statement? a. In the balance sheet. b. In the statement of operations. c. In the statement of changes in net assets. d. In the notes to the financial statements. - Correct Answer: d. In the notes to the financial statements. Which of the following is the best way to assign costs in responsibility management? a. Allow each department manager to be responsible for a different type of fixed cost. b. Allow each department manager to choose the cost that he/she prefers to control. c. Assign costs to the department manager who is responsible for making decisions about those costs. d. Assign costs equally to all managers thus allowing equal responsibility for costs. - Correct Answer: c. Assign costs to the department manager who is responsible for making decisions about those costs. You are planning to conduct an assessment of the utilization patterns in your organization's emergency department over the past three years. Which of the following techniques would be most appropriate? a. Strategic Planning. b. Trend Analysis. c. Situational Analysis. d. Survey Research. - Correct Answer: b. Trend Analysis. A manager who seeks input from others prior to making a decision is engaging in which leadership style? a. Autocratic. b. Participative. c. Democratic. d. Laissez-faire. - Correct Answer: b. Participative. When a specialist within the organization provides a directive or states an opinion, there is recognition of that individual as an expert in the field. This is an Example of what type of authority? a. Positional. b. Functional. c. Personal. d. Charismatic. - Correct Answer: b. Functional. Which of the following is not an Example of marketing function? a. Promoting the organization. b. Convincing patients to select the organization. c. Managing external relationships. d. Reviewing organizational costs. - Correct Answer: d. Reviewing organizational costs. The arrival of women for obstetrical deliveries or patient flow in an emergency department can best be analyzed through the use of which technique? a. Pert Charting b. Stochastic Modeling. c. Gant Charting. d. Monte Carlo Simulation. - Correct Answer: b. Stochastic Modeling. a. The time or length of the payment cycle. b. The dollar amount of credit granted to individuals. c. The total dollar amount of receivables carried on the books. d. Working capital management. - Correct Answer: a. The time or length of the payment cycle. Operational planning can be correctly defined as: a. A function of establishing the annual budget by accumulating departmental information. b. The process by which short-range objectives and actions are established and implemented in accordance with the strategic plan. c. An annual process of developing, evaluating and implementing goals based on community needs. d. Determining the major types of services offered based on profit margins. - Correct Answer: b. The process by which short-range objectives and actions are established and implemented in accordance with the strategic plan. Short-range planning is enhanced if a strategic plan has been adopted because: a. Potential program can be eliminated easily if not part of the strategic plan. b. Use of space has already been determined. c. A frame of reference is already in place. d. Operational problems can be quickly resolved. - Correct Answer: c. A frame of reference is already in place. In the field of healthcare services, which of the following trends has significantly increased the need to develop more comprehensive and more systematic credentialing processes in healthcare facilities? a. The increased number of independent healthcare practitioners. b. The expansion of governmental regulations covering the operation of healthcare facilities. c. The growth of ambulatory healthcare services. d. The growth of liability of healthcare facilities for malpractice by health practitioners. - Correct Answer: d. The growth of liability of healthcare facilities for malpractice by health practitioners. In a sound human resources program, the primary purpose of the job classification system is to: a. Develop position descriptions for employees. b. Establish a total wage and salary administration program. c. Rank jobs by kind and level of work performed. d. Define an effective organizational structure. - Correct Answer: c. Rank jobs by kind and level of work performed. Which of the following statements best defines increased productivity? a. An increase in productivity occurs when the number of units of service rendered in a given year increases over the number rendered in the previous year. b. An increase in productivity occurs when an increase occurs in the volume or number of units of service rendered. c. An increase in productivity occurs when a reduction occurs in the ratio of hours worked to the number of units of service rendered. d. An increase in productivity occurs when an increase occurs in the revenue from a given number of full- time equivalent employees. - Correct Answer: c. An increase in productivity occurs when a reduction occurs in the ratio of hours worked to the number of units of service rendered. Which of the following is the depreciation method that best recognizes changes in the general purchasing power of the dollar and/or changes in the replacement cost of specific assets? a. Declining-balance depreciation. b. Straight-line depreciation. c. Price-level depreciation. d. Sum of the years' digits depreciation. - Correct Answer: c. Price-level depreciation. When third-party policies and programs impede the healthcare facility's fiscal capacity to renovate and model its plant as routinely scheduled, the healthcare facility—to protect itself—should first: a. Delay capital improvements until funds are available. b. Reduce the level of operating services c. Limit the number of admissions from selected third-party payments sources. d. Resort to the regulatory agency to obtain a waiver. - Correct Answer: a. Delay capital improvements until funds are available. The method referred to as value analysis is used in inventory control activities to: a. Make adequate substitutions for requisitioned items. b. Reduce the quantity of items issued to the various departments. c. Reduce cost without impairing functional efficiency. d. Relate quantity and quality of items. - Correct Answer: c. Reduce cost without impairing functional efficiency. Under generally accepted accounting standards, bad debts are reported as a/an: a. Operating expense. b. Deduction from net revenue. c. Contractual allowance. d. Deduction from gross revenue. - Correct Answer: a. Operating expense. Incident reports should be initiated by: a. A member of the medical/professional staff or by any employee. b. Any person with direct patient-care responsibilities. c. The department director or supervisor. d. The risk manager/quality assurance coordinator. - Correct Answer: a. A member of the medical/professional staff or by any employee. The governing authority of a healthcare facility can terminate the privileges of any member of the medical/professional staff: a. At any time, if it follows its own adopted procedures. b. At any time, with or without due process. c. Only if termination is recommended by the medical/professional executive committee. d. Only if termination is recommended by the medical/professional staff. - Correct Answer: a. At any time, if it follows its own adopted procedures. d. Recommend that the personnel committee formulate an effective accident prevention program. - Correct Answer: a. Form a safety committee of key personnel to review reports of all accidents and make recommendations for corrections. If a physician abuses a patient in the healthcare organization, initial corrective action should be taken by the: a. Chief of staff. b. Chief of services (department chairman). c. Nursing unit supervisor. d. Chief executive officer. - Correct Answer: b. Chief of services (department chairman). A successful healthcare organization usually has a unique and wellarticulated company philosophy that presents a clear picture of the organization's objectives, norms and values. Employee motivation to support this philosophy would be greatest when the company: a. Maintains a program that provides employees with a wide variety of social, cultural and recreational activities. b. Emphasizes financial rewards, including strong employee benefits. c. Provides a training program that is well communicated, understood by employees and enforced by executive management. d. Continues a major effort to articulate employee rights in such areas as grievances, affirmative action and human rights issues. - Correct Answer: c. Provides a training program that is well communicated, understood by employees and enforced by executive management. One of the techniques most frequently used in industry to aid management in interpreting a form's balance sheet is computation of the acid-test ratio, which is the ratio of: a. Current assets to current liabilities. b. Total assets to total liabilities. c. Cash to short-term department. d. Cash, marketable securities and accounts receivable to current liabilities. - Correct Answer: d. Cash, marketable securities and accounts receivable to current liabilities. The primary reason for the decision to move from a freestanding voluntary facility to an investor-owned healthcare organization: a. Economy of scale. b. Access to the equity market. c. Access to patients. d. Improved visibility in the community. - Correct Answer: b. Access to the equity market. Most products and services enter a period of decline. Unless compelling reasons prevail, continuing a declining product or service is costly because: a. Increased turnover of personnel will occur. b. Continuation will set an undesirable precedent concerned with maintaining the status quo. c. The program will consume a disproportionate amount of management time and delay the search for a replacement. d. The organization will be perceived as being insensitive to the marketplace. - Correct Answer: c. The program will consume a disproportionate amount of management time and delay the search for a replacement. After a marketing research problem has been identified, the researcher's next step is to: a. Conduct a literature search. b. Conduct focus groups and collect data. c. Specify information needs. d. Design a data-collection instrument. - Correct Answer: c. Specify information needs. Which of the following statements is in accordance with the principle of delegation? a. The executive who subscribes to the principle of delegation knows what he/she wants to accomplish and exercises control over the work schedule of subordinates. b. An executive explains how he/she wants things done and points out how the subordinate's contribution fits into the overall plan. c. A successful executive gives instructions, telling subordinates exactly how and in what sequence things should be done. d. In applying the principle of delegation, an executive makes relatively few decisions personally and frames orders in broad general terms. - Correct Answer: d. In applying the principle of delegation, an executive makes relatively few decisions personally and frames orders in broad general terms. Before submission of the annual business plan to the governing authority, the plan should be developed by: a. Recommendations from the finance committee, on the basis of its estimate of income for the budget year. b. The heads of the profit centers, considering each center's anticipated revenues and expenses, with the CEO collating. c. Key executives, after receiving recommendations from the head of operating divisions. d. The heads of the operating divisions, with the CEO collating. - Correct Answer: c. Key executives, after receiving recommendations from the head of operating divisions. Memorial Hospital offers a screening test as a public service for $0.50 per test. Variable costs per unit are $0.32. Fixed costs are $43,200 per month for the department performing the test. It is the only test done by this special department. The break-even point in tests is: a. 240,000 tests. b. 172,000 tests. c. 135,000 tests. d. 86,400 tests. - Correct Answer: a. 240,000 tests. A positive net present value indicates that the investment has a rate of return: a. Higher than the discount rate used in the calculation. b. Lower than the discount rate used in the calculation. c. Equal to the discount rate used in the calculation. d. Equal to the accounting profit averaged over the life of the investment - Correct Answer: a. Higher than the discount rate used in the calculation. The asset turnover ratio is useful in measuring managerial performance because it indicates the: a. Amount of resources required to generate a dollar of revenue. b. Profitability per dollar of revenue. c. Effectiveness of capital structure decisions. d. Effective use of current assets. - Correct Answer: a. Amount of resources required to generate a dollar of revenue.