Question 1

An understanding of finance is important in managing operations in a healthcare organization.

Accepted Answer

Understanding finance is crucial in healthcare operations as it helps in budgeting, resource allocation, cost control, and ensuring the financial sustainability of the organization.

Question 2

Dealing with insurers is a minor concern to healthcare provider organizations, since the patient is ultimately responsible for paying the bill.

Accepted Answer

While the patient may have some nominal amount to pay for hospital services, the vast majority of payments for hospital services come from third-party payers

Question 3

The Patient Protection and Affordable Care Act includes fee reductions to healthcare providers.

Accepted Answer

The Patient Protection and Affordable Care Act (ACA) includes provisions aimed at reducing healthcare costs, which can involve fee reductions or adjustments for healthcare providers as part of its broader cost-containment strategies.

Question 4

Discounting fees in healthcare services is not a common practice, since the Charge Description Master price determines the realizable revenue for an account.

Accepted Answer

A hospital's gross billings, however, do not represent what will be realized, given that sizable discounts are taken based on contract negotiations (i.e., for private insurers) and for other rate caps, allowances, exclusions, or limitations

Question 5

More than one-third of hospitals in the United States have a negative operating margin.

Accepted Answer

As of recent reports, many hospitals in the United States are experiencing financial difficulties, with more than one-third having negative operating margins due to factors like rising costs and reimbursement challenges.

Question 6

The income statement and the balance sheet are the most common financial statements used in healthcare organizations.

Accepted Answer

The common financial statements are the income statement, balance sheet, and cash flow statement

Question 7

Benchmarking hospital financial performance using audited financial statements is fairly easy since all hospitals operate under the same financial disclosure rules.

Accepted Answer

Obtaining financial statements for benchmark comparisons with other hospitals is very difficult. For-profit, or publicly traded, firms are required to disclose their statements to the public as a condition of being listed on a stock exchange, but most hospitals are nonprofit and so are not regulated by the same rules.

Question 8

Which of the following is not a financial statement used in management of healthcare organizations?

Accepted Answer

Working capital ledger is not a financial statement used in management of healthcare organizations.

Question 9

Which of the following describes the amount that a healthcare provider will actually realize from billings for services?

Accepted Answer

Net patient revenues represent the actual amount a healthcare provider expects to collect from billings after accounting for deductions like contractual adjustments and discounts.

Question 10

Non-patient related financial activities include:

Accepted Answer

The answer of Non-patient related financial activities include:
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Question 11

Supply ratios include all of the following except:

Accepted Answer

Supply ratios typically focus on patient-related metrics, such as per discharge or per bed, rather than per employee.

Question 12

Which of the following describes the accounting equation?

Accepted Answer

The accounting equation is Assets = Liabilities + Equity, which is the foundation of the double-entry bookkeeping system.

Question 13

Working capital is represented by:

Accepted Answer

Levels of inventory, cash, and accounts receivable on the books at any point in time, net of any current liabilities that will consume cash

Question 14

Which of the following is not a form of debt used by health care organizations?

Accepted Answer

Discounts on patient accounts are not a form of debt; they are reductions in the amount owed by patients.

Question 15

Many hospitals are currently experiencing losses from operations. Describe ways that a hospital can improve financial performance outside of its routine operations.

Accepted Answer

The answer of Many hospitals are currently experiencing losses from...

Question 16

Describe how ratio analysis can be useful to operations management

Accepted Answer

The answer of Describe how ratio analysis can be useful...

Question 17

Describe the common organization of a balance sheet.

Accepted Answer

The answer of Describe the common organization of a balance...

Question 18

Describe the relationship between operations and working capital management.

Accepted Answer

The answer of Describe the relationship between operations and working...

Quiz 3: Operational Finance