1. Which of the following activities (is)are characteristic of businesses?

Select one:

a. Raising money in the capital markets

b. Using money raised to purchase assets, such as land, buildings, and equipment

c. Using the purchased assets to create goods or services

d. Sustaining themselves financially by selling their goods or services

e. All of these are characteristics

2.

Governmental health care organizations are able to raise funds through equity investments.

Select one:

True

False

3.

The useful impact of taxes equation is:

Select one:

a. After-tax income = Before-tax income multiplied by one minus the tax rate

b. Before-tax income = After-tax income multiplied by one minus the tax rate

c. After-tax income = Before-tax income multiplied by one plus the tax rate

d. Before-tax income = After-tax income multiplied by one plus the tax rate

e. After-tax income = Before-tax income divided by one minus the tax rate

4.

Because the organizational and financial goals of for-profit and not-for-profit provider organizations differ, their financial decision-making processes lead to different decisions.

Select one:

True

False

5.

One of the advantages of a nonprofit organization compared with an investor-owned company is that the investor-owned company is subject to federal income taxes.

Select one:

True

False

6.

The primary goal of not-for-profit corporations is expressed in a mission statement and often involves service to the community.

Select one:

True

False

7.

n contextualizingthe healthcare industry and the underlying delivery system that serves it, we can think of healthcare delivery as a three-legged stool of which includes all of the following EXCEPT:

Select one:

a. Cost

b. Quality

c. Taxes

d. Access

8.

From a provider's perspective, which of the following third-party payment methods has utilization risk?

Select one:

a. Capitation

b. Per diem

c. Charge based

d. Diagnosis (DRG) based

e. Cost based

9.

Which of the following individuals are not stakeholders in not-for-profit corporations?

Select one:

a. Patients

b. Stockholders

c. Suppliers

d. Managers

e. Employees

10.

Which of the following statements about hospitals is most correct?

Select one:

a. Patients at general acute care hospitals typically have long patient stays, often 30 or more days.

b. The number of specialty hospitals has declined over the last three decades.

c. The optimal size for a hospital is roughly 50 beds.

d. The majority of hospitals are public or not for profit (as opposed to investor owned).

e. Most physicians involved in hospital services are hospital employees.

11.

Which of the following statements about the legal forms of for-profit business organization is most correct?

Select one:

a. Corporations are easier to form than proprietorships.

b. Partnerships are applicable when there are more than three owners, while proprietorships are used when there are three or fewer owners.

c. Corporations have the advantage of limited liability to owners.

d. Hybrid forms of business cannot be used by healthcare organizations.

e. Corporations' income is taxed only once, and hence they typically are more tax efficient than proprietorships and partnerships.

12.

Medicare covers physician services under which of the following:

Select one:

a. Part A

b. Part B

c. Part C

d. Part D

e. None of these answers are correct

13.

Which of the following statements about regulatory and legal issues is most correct?

Select one:

a. States require licensure of certain healthcare providers to limit the number of providers.

b. The goal of certificate of need regulation is to ensure there is a sufficient number of clinical workers at each hospital and nursing home.

c. Clinicians who are employees of hospitals do not require personal licenses because they can practice under the umbrella of the hospital's license.

d. Most providers' primary legal concern is professional (malpractice) liability.

e. Healthcare managers must grapple with several legal issues but almost no ethical issues.

14.

Which of the following statements about Medicare reimbursement of physicians is most correct?

Select one:

a. The payment is based on relative value units.

b. The payment is based on patient age.

c. The payment amount is the same for an identical service regardless of where the physician is located.

d. The payment is based on patient gender.

e. The payment for an office visit is the same regardless of physician specialty.

15.

MCOs arrange for the delivery of healthcare services by contracting with providers. There are two major MCOs: Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO).

Select one:

True

False

16.

Which of the following statements about fee-for-service reimbursement is incorrect?

Select one:

a. Payment may be cost based.

b. Payment may be charged based.

c. Payment may be on a prospective basis (specified beforehand).

d. Payment may be based on the number of covered lives.

e. Payment may be on a per visit basis.

17.

Which of the following is NOT true?

Select one:

a. Under capitation, the provider is paid a fixed amount per covered life per period (usually a month) regardless of the amount of services provided.

b. Cost-based reimbursement is the least risky for providers because payers more or less ensure that costs will be covered, and hence profits will be earned.

c. Although charge-based reimbursement does encourage providers to contain costs, the incentive is weak because charges can be more easily increased than costs can be reduced.

d. Under prospective payment reimbursement, providers have the incentive to increase costs because the amount of reimbursement is variable and will rise accordingly.

e. Pay for Performance rewards doctors, hospitals, and other health care providers for attaining targeted service goals, like meeting health care quality or efficiency standards.

18.

Which of the following is NOT true?

Select one:

a. The threat of medical malpractice litigation serves as a functional deterrent to agencys problem of adverse selection.

b. The agency problem is mitigated by compensation incentives created to motive owners to act in the best interest of managers.

c. Agency theory distinguishes between the risk preferences of principals (owners) and agents (managers).

d. Improved flow of information can serve to minimize agencys problem of moral hazard, the tendency of the agent (the physician) to take undue risk because he or she usually has more information than the principal while also not having to bear the burden of the costs.

e. In an industry so heavily reliant upon testing and proced

19.

Which of the following statements about not-for-profit corporations is most correct?

Select one:

a. They can issue tax-exempt (municipal) debt.

b. They pay federal income taxes.

c. They pay local and state taxes.

d. Community residents exercise control of such corporations by voting for the board of directors (trustees).

e. They pay dividends to owners.

20.

Which of the following statements about accountable care organizations (ACOs) is most correct?

Select one:

a. ACOs are established and owned by insurance companies.

b. ACOs need only a minimum of managerial systems in place because the payer (primarily Medicare) assumes most of the managerial functions.

c. ACOs must include the following set of providers: hospital, physician group, urgent care center, and home health agency.

d. ACOs are radically different from other attempts to improve the delivery of health services.

e. ACOs can distribute bonuses when targets are met and impose penalties when targets are missed.