Deck 17: Financial Management and Health Care

Question 1

Henry Ford demonstrated the impact a manager can have on productivity. His introduction of the assembly line reduced the time to assemble a car chassis by

A) 37.5%
B) 50.0%
C) 62.5%
D) 75.0%
E) 87.5%

Answer 1

E

Question 2

Budgeting rests primarily on

A) Accounting, finance, and economics
B) Management, marketing, and economics
C) Finance, operations management, and economics
D) Accounting, management, and marketing
E) Accounting, finance, and marketing

Answer 2

A

Question 3

The economic concepts that guide budgeting include marginalism, opportunity costs, and efficient markets. Efficient markets holds that

A) Expanding an activity will eventually lead to diminishing returns
B) Every activity undertaken necessitates foregoing other alternatives
C) People always seek to maximize their own well-being so unexploited profit opportunities will be short-lived
D) Market failure does not occur.

Answer 3

C

Question 4

The first step in building a budget is

A) Collecting data
B) Forecasting output
C) Estimating revenue
D) Estimating expenses
E) Identifying the type of budget to be constructed

Question 5

The last step in building a budget is

A) Assessing feasibility
B) Forecasting output
C) Estimating revenue
D) Estimating expenses
E) Identifying the type of budget to be constructed

Question 6

The budgeting systems that are most appropriate for operating managers are

A) Incremental, activity-based, and flexible budgeting
B) Activity-based, flexible, and zero-base budgeting
C) Flexible, zero-base, and program budgeting
D) Program, incremental, and activity-based budgeting

Question 7

The two budgeting systems that are most appropriate for senior management are

A) Incremental and flexible budgeting
B) Flexible and activity-based budgeting
C) Activity-based and zero-base budgeting
D) Zero-base and program budgeting
E) Program and activity-based budgeting

Question 8

The primary interaction operating managers have with finance is

A) Budgeting
B) Capital investment
C) Financial reporting
D) Financing capital structure

Question 9

Which of the following was NOT identified as a supporting skill needed by all managers?

A) Finance, including budgeting and variance analysis
B) Human resource, including interpersonal skill
C) Legal, including the ability to interpret regulations
D) Information technology, including the ability to extract data from databases

Question 10

The primary use of ratios and operating indicators is

A) To construct budgets
B) To determine why actual operations differ from the budget
C) To assess where an organization should be
D) To evaluate the effectiveness of managers

Question 11

The cost per admission in community hospitals since 1991 has been

A) Similar for all hospitals
B) Lower for for-profit hospitals compared to non-profit and public hospitals
C) Lower for non-profit hospitals compared to for-profit and public hospitals
D) Lower for public hospitals compared to for-profit and non-profit hospitals

Question 12

U.S. health expenditures between 2000 and 2015

A) Whether measured in dollars or as a percentage of GDP have increased each year
B) Measured as a percent of GDP have been stable, while when measured in dollars have increased each year
C) Measured in dollars have been stable, while when measure as a percent of GDP have increased each year
D) Measured in dollars have increased each year, while when measured as a percent of GDP have increased overall but has experienced multiple years of relative stability

Question 13

Which of the following was NOT given as a reason for the growth in percentage of GDP consumed by health expenditures?

A) An increase in the elderly population
B) A labor-intensive production process
C) Excessive wages for healthcare wages
D) Cost-increasing technology

Question 14

Which of the following was given as a reason for the growth in percentage of GDP consumed by health expenditures?

A) An increase in malpractice claims
B) A labor-intensive production process
C) Excessive wages for healthcare wages
D) High profits of health insurers

Question 15

Value equals

A) Output/input
B) Output/throughput
C) Output/cost
D) Output/outcome

Question 16

Value in health care can be increased by

A) Increasing output and maintaining current costs
B) Maintaining current output and reducing costs
C) Increasing output at a faster rate than the increase in costs
D) Reducing output at a slower rate than the decrease in cost
E) All of the above

Question 17

Value is determined by

A) What is produced and how it is produced
B) What is produced, i.e., output
C) Production cost
D) The price of the output produced

Question 18

Which of the following is NOT required to maximize the effectiveness and efficiency of healthcare resources?

A) Budgets that focus employee attention on output and outcomes
B) Accurate output forecasts
C) Budgets that are used to manage operations
D) The incorporation of budget into employee evaluation and compensation processes

Question 19

Which of the following is NOT required to control the rate of increase in healthcare costs?

A) Cost must be better understood
B) Budgets must provide incentives to control costs
C) Employees must internalize the idea that value is output/cost
D) Cost must be a key component of future electronic health records

Question 20

Which of the following is NOT required to control the rate of increase in healthcare costs?

A) Cost must be better understood
B) Budgets must provide incentives to control costs
C) Employees must internalize the idea that value is output/cost
D) All of the preceding must occur to control future healthcare costs

Question 21

The objective and appropriate budget system changes as managers climb the organization.

Question 22

Managers are only promoted after they have mastered the skills needed to succeed in the new, higher position.

Question 23

Budgeting is a science where definitive relationships exist between variables and can be used to create accurate revenue and expenses estimates.

Question 24

All managers are responsible for an organization's financial performance.

Question 25

Ratios provide more insight into organizational performance than operating indicators.

Question 26

As managers advance in an organization their financial skills must broaden beyond budgeting, variance analysis, and capital budgeting.