16.What is the general rule of thumb about when to borrow long-term or short-term?The general rule of thumb is to borrow short-term for short-term needs and long-term for long-term needs. This often results in a mixed strategy for health care providers.Is this statement TRUE or FALSE?

17.Why is a dollar today worth more than a dollar received in the future?Answer: The value of money changes over time. There are three primary reasons for this. The main reason is inflation or the general rise in the price of goods, and therefore the purchasing power of a dollar decreases over time. The second reason are the costs of uncertainty, or the risk associated with actually receiving the promised cash flow in the future. The third factor is the opportunity cost, or the alternative interest you could earn by investing this money elsewhere.Is this statement TRUE or False?

18. An HMO has just proposed an offer to promote your facility as the region's Center of Excellence for obstetrical deliveries. The HMO covers 700,000 lives in the community served by your facility. The HMO has provided the following information for your consideration: the hospital cost for a normal uncomplicated delivery is $1,800 and for a complicated cesarean delivery is $3,500. Furthermore, the annual rate per 100,000 lives for a normal uncomplicated delivery is 6.0 while for a complicated Cesarean delivery is 1.5. The HMO proposes a capitated per member per month (PMPM) premium to the hospital to provide obstetrical services to their members. What would the break-even premium be?

A.	$0.01783 PMPM
B.	$0.01830 PMPM
C.	$0.01336 PMPM
D.	$0.016050 PMPM
E.	none of the above

hat are the differences between efficiency and effectiveness.

Answer:Efficiencyis one of the two objectives of management control.Efficiencyrefers to the relationship between specific outputs and inputs, or cost. Cost per patient day would be an efficiency measure.Efficiencycan be measured in most circumstances and is fairly objective.Effectivenessis the second objective of management control and is concerned with the relationship between outputs and facility goals and objectives. The contribution of an outpatient clinic to patient access would be an effectiveness measure. Ofteneffectivenessmeasures are more subjective and difficult to measure.

Is this statement TRUE or FALSE?

20.

A High Deductible Health Plan with a Savings Optiondoes notinclude the following?

A.	first dollar payment for health services
B.	a bank administered medical savings account.
C.	high deductibles
D.	Links to traditional health plans such as HMOs and PPOs