Deck 6: Finances

Question 1

Which of the following best defines productivity?

A)Productivity is the output per unit of input.
B)Productivity is the input needed per unit of output.
C)Productivity is revenue generated per unit of output.
D)Productivity is the liabilities incurred per unit of input.

Answer 1

Productivity is the output per unit of input.

Question 2

You are the director of the special care units in a university medical center. Your spouse is the CFO of a small manufacturing company that produces educational toys for children. Who has the most complex challenges in respect to productivity measurement?

A)You have the greatest challenges because there are more staff members in your department than employees in your spouse's company.
B)You have the greatest challenges because the measurement of output is far more complex in health care settings than it is in manufacturing.
C)Your spouse has the greatest challenges because the ability of a manufacturing company to survive is far greater than a medical center.
D)Your spouse has the greatest challenges because the measurement of output is far more complex in manufacturing than it is in a health care setting.

Answer 2

You have the greatest challenges because the measurement of output is far more complex in health care settings than it is in manufacturing.

Question 3

What are some of the most qualitative factors that impact on productivity in health care?

A)Size and location of the health care facility
B)Number of inpatients and Medicare reimbursement rates.
C)Salaries and unanticipated overtime wages
D)Quality of care and staff competencies.

Answer 3

Quality of care and staff competencies.

Question 4

Which of the following is a PPPV model that is used to measure profitability as a function of productivity and other variables?

A)The Japanese Kurosawa model
B)The Greek Entropy model
C)The American Valence model
D)The Finnish Variance model

Question 5

You have been asked to prepare an annual Profit and Loss Statement for your department. What should you be aware of while preparing this financial management statement?

A)Profit and Loss Statements are less complex and less detailed than Balance Sheets.
B)Variable costs, such as the cost of electricity, are not included in a Profit and Loss Statement.
C)You can include current and prior year data on the Profit and Loss Statement.
D)All entries on the Profit and Loss Statement must be in terms of dollars, not % of increase.

Question 6

Your department has received a grant from a philanthropic group. This grant money is formatted under which area of Revenue and Expenses financial report?

A)Mixed revenues
B)Revenues
C)Variable revenues
D)Unexpected revenues

Question 7

The Healthcare Integrated General Ledger Accounting System (HIGLAS) is an accepted financial accounting format for:

A)All integrated health care systems.
B)All home care and community health providers.
C)Medicare Parts A and B providers.
D)All U.S. government-funded health care facilities.

Question 8

Which of the following is formatted under liabilities on a Balance Sheet?

A)Accounts receivable
B)Accounts payable
C)Capital
D)Equipment

Question 9

Payroll tax deductions, such federal withholding and state withholding taxes, are formatted in what section and subsection of a Balance Sheet?

A)Payroll Taxes Payable: Liability
B)Payroll Taxes Payable: Asset
C)Direct Costs: Expense
D)Direct Costs: Indirect Cost

Question 10

State hospitals are:

A)Not-for-profit health care facilities that are established with federal legislation.
B)Proprietary health care facilities that are established with state legislation.
C)Governmental health care facilities that are established with federal legislation.
D)Governmental health care facilities that are established with state legislation.

Question 11

A community outpatient health agency will be reimbursed for some preventive health care under what legislation?

A)Federal government Medicare Part A legislation
B)Federal government Medicare Part B legislation
C)State government Medicaid Part A legislation
D)State government Medicaid Part B legislation

Question 12

The Children's Health Insurance Program is:

A)Legislated by and administered by the federal government.
B)Legislated by and administered by the individual states.
C)Legislated by the federal government and administered by the states.
D)Legislated by the states and administered by the federal government.

Question 13

Medigap is best described as:

A)A state approved supplemental health insurance policy that is paid for by individuals.
B)A state approved supplemental health insurance policy that is paid for by Medicaid.
C)A federally approved supplemental health insurance policy that is paid for by individuals.
D)A federally approved supplemental health insurance policy that is paid for by Medicare.

Question 14

A major financial threat to the integrity of the Medicare and Medicaid programs is:

A)Fraud.
B)The lack of accessibility to necessary health care.
C)The paucity of rural health care services.
D)The severe and projected nursing shortage.

Question 15

Which of the following is a major type of a budget?

A)A cash budget
B)A deficit budget
C)An expense and revenue budget
D)A variable budget.

Question 16

Costs are classified as fixed, variable or mixed. Which is an example of a fixed cost?

A)Pro-rated utilities according to the square footage of the department or area
B)Patient census and levels of acuity
C)Medicare and Medicaid prospective reimbursement
D)Staff nurse salaries negotiated with the union in a five year contract

Question 17

Which financial management function can be described as the process of determining the nature of any discrepancies between the actual and projected figures that were documented in the budget?

A)Budget analysis
B)Variance analysis
C)Mixed cost analysis
D)A pivot table

Question 18

Which of these costs is a part of a capital budget?

A)Staff salaries and benefits
B)Grants and endowments
C)Major medical equipment
D)Routine patient care supplies

Question 19

Who should be actively engaged, and involved, in the entire budgetary process, including variance analysis?

A)Upper and middle management
B)All members of the organization
C)All department heads and upper management
D)The CEO, the CFO and department heads

Question 20

What is the primary purpose of expense forecasting?

A)To balance the profits and loss statement
B)To predict and manage budget variances
C)To ensure financial viability
D)To adjust Medicare reimbursement rates

Question 21

You, as the nurse manager, have done the budget on an annual basis for the last 5 years. What data should you consider in order to forecast your pro-rated share of the organization's utilities costs?

A)Utility costs for healthcare facilities like yours in the community
B)The average percentage of your utility cost changes over the last 5 years
C)The average of all of your utility cost changes over the last 5 years

Question 22

You have just begun the role of the Director of Emergency Services in a new Los Angeles community hospital. How can you best project, or forecast, expenses for this department after having 5 years of experience in a similar role located in Tampa, Florida?

A)Systematically collect expense data for similar departments of similar size in the Los Angeles area.
B)Use the expense data that you have collected in Tampa, Florida as a baseline.
C)Consult with the CFO and ask for their recommendation because you do not have any data.
D)Understand that a forecast is not possible because historical data is not available.

Question 23

Budgets must be attainable, reasonable and realistic. Accurate expense and revenue forecasting facilitates:

A)Attainable budgets without variance.
B)A reasonable approach to the mission and goals of the facility.
C)Realistic approaches to effective cost containment.
D)Attainable strategic goals for the organization's strategic plan.

Question 24

Which complex skill is necessary for accurate expense forecasting?

A)Inductive reasoning
B)Intuitive thinking
C)Evidence based clinical practice
D)Complex data collection and analysis

Question 25

Your hospital is in a rural area where the construction of a nuclear power plant has been recently completed. This plant will be fully operational in January of next year. What expenses can you reasonably forecast for next year?

A)Operating expenses relating to major decontamination equipment
B)Capital expenses relating to personal protective equipment like gowns and gloves
C)Increased staff relating to these increased community needs
D)Pro-rated property tax increases because the plant will become operational

Question 26

What part of Medicare covers the cost of durable medical equipment like wheelchairs and blood glucose monitors?

A)Part A
B)Part B
C)Part C
D)Part D

Question 27

Medicare reimbursement is a type of what type of reimbursement?

A)Retrospective
B)Prospective
C)Capitation
D)MDS

Question 28

A major difference between Medicare and Medicaid is that Medicare:

A)Is only used for those 65 years of age and older.
B)Is intended to facilitate health care access for the indigent.
C)Is a regulatory and accreditation body and Medicaid is not.
D)Covers seriously disabled people less than 65 years old.

Question 29

Which health care services are reimbursed according to resource utilization groups?

A)Home care
B)Hospice care
C)Acute care
D)Long-term care

Question 30

The established standards and guidelines used by the Centers for Medicare and Medicaid Services (CMS) are referred to as:

A)Standards of Care.
B)JCAHO standards.
C)Conditions of Participation.
D)Standards of Practice.

Question 31

A budget variance can be interpreted, or analyzed, as something that:

A)Is always controllable by the manager and staff.
B)Is not controllable by the manager and staff.
C)Can be both controllable and uncontrollable.
D)Results from incompetent budgeting processes.

Question 32

Your department's total assets of $ 405,900, when compared to your department's total liabilities of $412,987, indicates that your department has an Asset/Liability Ratio of 0.98. How would you interpret this data?

A)The department has significant liquidity.
B)The department has very little liquidity.
C)The department has significant assets.
D)The department has no assets.

Question 33

Your department's Asset/Liability Ratio is 0.87. You belong to a community nursing administrators' group where you learn that the mean, or average, Asset/Liability Ratios for all departments like yours is 2.27. What are the implications of this comparative data?

A)You should dismiss this data because all departments are different, and you have to accept this fact without further exploration
B)You should view this data as an indication that your department has more liquidity and better financial health than others
C)You should further explore this data and determine what things you can do in order to decrease your Asset/Liability Ratio
D)You should further explore this data and determine what things you can do in order to increase your Asset/Liability Ratio

Question 34

You observe a positive variance in terms of your operating expenses during your monthly review of the departmental budget. After analysis, you have determined that the source of the variance is patient care supplies. What should you do?

A)Praise the staff because they have successfully conserved patient supplies.
B)Immediately report this over spending to your immediate supervisor.
C)Have a staff meeting and inform the staff that they have to conserve patient care supplies.
D)Nothing at all because this variance is probably not at all accurate.

Question 35

Select a type of variance that is paired with a possible corrective action.

A)Positive variance: Increase productivity
B)Positive variance: Decrease salaries
C)Negative variance: Increase efficiency
D)Negative variance: Decrease patient census