Exam 18: Revenue Cycle and Financial Management

Use the following information to answer the questions below. In the process of long-range planning at Rocky Mountain Hospital, Health Information Services defined its future business opportunities.A commitment was made to an optical imaging system and service to be implemented at the first of the year.The system would have the capacity for serving physician offices through a space rental and service program in addition to meeting the needs of the department.It was estimated by the health information manager that the hardware and software components of the optical imaging system would cost approximately $100,000 (with an estimated useful life of 5 years), and a 3-year lease for one van (with a useful life of 5 years) would cost $7000 annually.The goal was to service 100 offices the first year, 200 offices the second year, and 300 offices the third and successive years at $150 a month.The accounting department uses straight-line depreciation; that is, equal amounts of depreciation expenses are recognized for each year the asset is assumed to be used. -Before the Capital Evaluation Committee authorizes the acquisition of the proposed imaging system, it will also examine other capital evaluation measures. All the following are capital evaluation measures except

After the imaging proposal was approved, the health information manager was able to complete the operating budget for consolidation in the hospital's ____________________ budget.

Use the information below to answer the following question. -Referring to the information given, compute the operating margin ratio.

Use the following information to answer the questions below. In the process of long-range planning at Rocky Mountain Hospital, Health Information Services defined its future business opportunities.A commitment was made to an optical imaging system and service to be implemented at the first of the year.The system would have the capacity for serving physician offices through a space rental and service program in addition to meeting the needs of the department.It was estimated by the health information manager that the hardware and software components of the optical imaging system would cost approximately $100,000 (with an estimated useful life of 5 years), and a 3-year lease for one van (with a useful life of 5 years) would cost $7000 annually.The goal was to service 100 offices the first year, 200 offices the second year, and 300 offices the third and successive years at $150 a month.The accounting department uses straight-line depreciation; that is, equal amounts of depreciation expenses are recognized for each year the asset is assumed to be used. -The monthly fee for leasing the van in the health information imaging service is considered a fixed cost.

In preparation for implementing the system, the health information manager assigned a fee to the various services that will be provided by the Health Information Services department, including that for the new health information imaging service for physician offices. These charges will be incorporated in the ______________________________ by the managerial accountant.

Use the following information to answer the questions below. In the process of long-range planning at Rocky Mountain Hospital, Health Information Services defined its future business opportunities.A commitment was made to an optical imaging system and service to be implemented at the first of the year.The system would have the capacity for serving physician offices through a space rental and service program in addition to meeting the needs of the department.It was estimated by the health information manager that the hardware and software components of the optical imaging system would cost approximately $100,000 (with an estimated useful life of 5 years), and a 3-year lease for one van (with a useful life of 5 years) would cost $7000 annually.The goal was to service 100 offices the first year, 200 offices the second year, and 300 offices the third and successive years at $150 a month.The accounting department uses straight-line depreciation; that is, equal amounts of depreciation expenses are recognized for each year the asset is assumed to be used. -In addition, the Capital Expenditure Committee will examine the _______ to determine objectively whether the benefits to be received from the optical imaging system are the best alternative use of the organization's investment funds.

Explain the benefits of performing ratio analysis.

____________________ is an example of fixed costs.

Use the following information to answer the questions below. In the process of long-range planning at Rocky Mountain Hospital, Health Information Services defined its future business opportunities.A commitment was made to an optical imaging system and service to be implemented at the first of the year.The system would have the capacity for serving physician offices through a space rental and service program in addition to meeting the needs of the department.It was estimated by the health information manager that the hardware and software components of the optical imaging system would cost approximately $100,000 (with an estimated useful life of 5 years), and a 3-year lease for one van (with a useful life of 5 years) would cost $7000 annually.The goal was to service 100 offices the first year, 200 offices the second year, and 300 offices the third and successive years at $150 a month.The accounting department uses straight-line depreciation; that is, equal amounts of depreciation expenses are recognized for each year the asset is assumed to be used. -Because the revenue from the approved imaging system will be significant, the Health Information Services department will now be considered an indirect cost department.

On what report would the manager locate the gross revenue for health information imaging services to use as the numerator when calculating the accounts receivable turnover for the new imaging service?

Why is the cash budget so important in managing a health care institution?

During the planning process, the health information manager had no internal historical data (except for the number of physicians on the staff) available to predict the volume of outpatient clinic use it could accurately anticipate for an optical imaging service. Because of this, a ____________________ budget would not be possible for the first year of service.

To analyze what has actually been expended compared with that which was budgeted can be determined from the ____________________ report.

Use the information below to answer the following questions. -Referring to the information given, compute the days of revenue in patient accounts receivable.

In addition, the health information manager wants to monitor the accounts receivable carefully for the newly implemented system to track the (number of days) of revenue in accounts receivable. What financial statement would supply the needed information?

The health information manager wants to calculate the accounts receivable turnover for the new imaging service. To do this, the manager will need what numerical data for the numerator of this equation?

You have submitted a request to the board of directors to purchase a computer-based patient record system. The system is anticipated to save $45,000 in personnel operating costs each year for the next 3 years and will cost $110,000 to install. Operating and maintenance costs for the 3 years are estimated to be $5000 per year. The money to buy the equipment would come from an equipment fund, which is now earning 8%. Calculate the payback period for the investment.

The condition of the ____________________ budget will be examined to determine whether sufficient cash will be available to meet the upcoming expenses for implementing the new service and also the one-time expense associated with the acquisition of the equipment and software.

The manager wants to calculate the operating margin ratio to evaluate the use of the department's resources in achieving its desired goals. What formula (data) should be used?

One of the first steps in the budgeting process is to develop the statistics budget. Why?