Description

1. Healthcare is more heavily regulated than most other businesses in the United States.

ANS: T PTS: 1 REF: Introduction

1. Capitated payment plans were common before 1965.

ANS: F PTS: 1 REF: Financing Healthcare in America

1. A recent trend in healthcare is the growth of public corporations that own multiple hospitals and other healthcare facilities.

ANS: T PTS: 1 REF: Types of Medical Businesses

1. Home healthcare services are in decline because providing services at home is not cost effective.

ANS: F PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

1. Ambulatory care refers to services provided by paramedics or emergency medical technologists while transporting a patient to a hospital.

ANS: F PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

MULTIPLE CHOICE

1. Which of the following financial management issues differentiates healthcare from other businesses?
2. operating budgets c. third-party payers
   1. need for cash flow d. accounting method ANS: C PTS: 1 REF: Introduction
   2. Which type of healthcare reimbursement system pays a fixed amount per patient?
   3. Medicaid c. third-party insurance
      1. capitation d. healthcare maintenance organization ANS: B PTS: 1 REF: Introduction
      2. Prior to 1930, hospitals in America received most of their funding from.
      3. charitable donations c. patient payments
      4. city governments d. physician organizations

ANS: A PTS: 1 REF: Financing Healthcare in America

1. Which of the following private-sector companies provides hospitalization insurance?
2. Medicare c. Blue Shield
3. Medicaid d. Blue Cross

ANS: D PTS: 1 REF: Financing Healthcare in America

1. What situation resulted in the rapid increase of employer-sponsored healthcare insurance during World War II?
2. rationing c. socialism
3. wage freezes d. government mandate

ANS: B PTS: 1 REF: Financing Healthcare in America

1. When Medicare and Medicaid were established in 1965, their costs increased much more than government planners expected. What was changed in 1982 in an attempt to keep costs down?
2. Physicians were given incentives to use fewer resources.
3. Patients were given incentives to improve their health.
4. Hospital budgets were controlled by the federal government.
5. Payments to healthcare providers were based on patients’ diagnoses.

ANS: D PTS: 1 REF: Financing Healthcare in America

1. Which type of healthcare insurance plan uses primary care clinician gatekeepers to coordinate the care of plan participants?
2. capitation plan c. preferred provider plan
3. health maintenance organization d. fee-for-service plan

ANS: B PTS: 1 REF: Financing Healthcare in America

1. Most proprietorships form professional corporations in order to .
2. reduce taxes c. reduce malpractice liabilities
   1. raise capital by selling shares d. reduce financial liabilities ANS: D PTS: 1 REF: Types of Medical Businesses
   2. A small, closely held corporation is owned by .
   3. a parent corporation c. private investors
   4. public stockholders d. a proprietorship

ANS: C PTS: 1 REF: Types of Medical Businesses

1. If you own stock in a publicly-held corporation that becomes bankrupt, you will .
2. be billed for a portion of legal costs
3. lose only the value of your stocks
4. owe a portion of the corporation’s debt
5. owe a portion of the corporation’s unpaid taxes

ANS: B PTS: 1 REF: Types of Medical Businesses

1. Federal tax revenues are based on a C Corporation’s .
2. gross revenues c. dividends
3. net revenues and profits d. profits and dividends

ANS: D PTS: 1 REF: Types of Medical Businesses

1. A not-for-profit hospital must .
2. be operated by a religious organization
3. adopt a corporate structure
4. have annual stockholder meetings
5. be staffed by volunteers

ANS: B PTS: 1 REF: Types of Medical Businesses

1. The emergency department of a hospital is .
2. an in-patient facility c. a tax-exempt facility
3. an out-patient facility d. a non-classified facility

ANS: B PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

1. The Hospital Survey and Construction Act of 1946 produced.
2. an increase in the availability of in-patient hospital services
3. a doubling in the number of not-for-profit hospitals
4. a decrease in hospital charges due to greater competition
5. a five-year increase in life expectancy of Americans

ANS: A PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

1. The Tax Equity and Fiscal Responsibility Act of 1982 resulted in .
2. fee-for-service plans for Medicare
3. preferred provider insurance plans
4. a prospective payment system for Medicare
5. for-profit hospital corporations

ANS: C PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

1. Home healthcare services .
2. have been decreasing since the 1980s
3. are less cost-effective than hospitals
4. are eligible for Medicaid and Medicare reimbursement
5. must be overseen by a physician

ANS: C PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

1. Nursing home costs for elderly Americans .
2. are covered by Medicare
3. are mostly covered by long-term care insurance
4. are decreasing because of improved medications
5. are mostly covered by Medicaid

ANS: D PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

1. The change that had the biggest financial impact on hospitals in the 1980s and 1990s was .
2. the unionization of nurses and other caregivers
3. the loss of federal tax-exemptions
4. the reimbursement based on patient diagnoses
5. federal grants for new hospitals and hospital expansions

ANS: C PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

1. Hospice care .
2. extends the life of patients
3. requires a dedicated facility
4. is for patients and their families
5. is not reimbursed by insurers or Medicare

ANS: C PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

1. The responsibility for medical services at most hospitals lies with .
2. the chief executive officer c. the board of directors
3. the chief of staff d. the board of trustees

ANS: A PTS: 1

REF: Medical Facilities: The Evolving Process of Healthcare Delivery

COMPLETION

1. The legal document required in most states for expanding a hospital is a(n) .

ANS: Certificate of Need

PTS: 1 REF: Introduction

1. The original Medicare and Medicaid programs reimbursed hospitals using a(n)

system.

ANS:

cost-based retrospective

PTS: 1 REF: Financing Healthcare in America

1. A group of physicians who do not want to incorporate but want to reduce their financial risks should form a(n) .

ANS:

LLP (limited liability partnership) limited liability partnership (LLP) LLP

limited liability partnership

PTS: 1 REF: Types of Medical Businesses

1. A not-for-profit healthcare business must be structured as a(n) .

ANS: corporation

PTS: 1 REF: Types of Medical Businesses

1. The controlling entity of a for-profit, investor-owned hospital is the .

ANS: board of directors

PTS: 1 REF: Medical Facilities: The Evolving Process of Healthcare Delivery

SHORT ANSWER

1. Explain why employer-sponsored healthcare insurance in America increased during World War II. ANS:

The federal government froze worker wages during the war. Employers used benefits such as healthcare insurance to help retain their existing workers and attract new workers.

PTS: 1 REF: Introduction

1. What circumstances in the first half of the twentieth century caused many hospitals in America to charge fees for their services?

ANS:

The stock market crash and the Great Depression reduced wealth. Charitable donations to hospitals fell below the amounts needed to keep them in operation. Hospitals had to charge patients for their care.

PTS: 1 REF: Financing Healthcare in America

1. What factors contributed to the rapid cost increases of the Medicare and Medicaid programs in the 1960s, 1970s, and early 1980s?

ANS:

Reimbursement was based on a percentage of typical fee-for-service charges. Longer hospital stays resulted in greater reimbursements to the hospitals and the attending physicians. There was no incentive to reduce costs. Low costs to patients meant that they could demand premium care for medical problems and seek care for trivial afflictions.

PTS: 1 REF: Financing Healthcare in America

1. Describe the financial advantages of a not-for-profit hospital over a for-profit hospital.

ANS:

A non-for-profit hospital pays no income or property taxes. It does not need to generate profits for stockholders. It can receive charitable donations to help cover operating costs and expansions.

PTS: 1 REF: Types of Medical Businesses

1. Describe recent trends in long-term care services in America.

ANS:

Life-care facilities and continuing care retirement communities have become more common. These meet the healthcare and daily living needs of people who do not need continual care in nursing homes. Another trend is increased government funding of long-term care primarily through Medicaid (after patients spend-down their financial resources).

PTS: 1 REF: Medical Facilities: The Evolving Process of Healthcare Delivery