Chapter 1 Healthcare Finance Basics well answered already passed, Exams of Nursing

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Chapter 1 Healthcare Finance Basics

Healthcare finance is the practice of finance, including? - correct answer ✔✔both accounting and financial management, within health services (provider) organizations. Accounting concerns the measurement in? - correct answer ✔✔financial (dollar) terms, of events that reflect the resources, operations, and financing of an organization. Financial management provides? - correct answer ✔✔the theory, concepts, and tools necessary to help managers make better financial decisions. A business has the following characteristics: - correct answer ✔✔obtains financing from the marketplace uses the funds to buy assets operates the assets to provide goods or services sells the goods or services to create revenue. What is the difference between a business and a pure charity? - correct answer ✔✔a business functions by selling goods and services (a hospital or medical practice), but a pure charity does not sell goods or services. The primary role of finance within any organization is? - correct answer ✔✔plan for, acquire, and utilize resources to maximize the efficiency(and hence value) of the enterprise. Finance activities include: - correct answer ✔✔- Planning and budgeting

• Financial reporting
• Capital investment decisions
• Financing decisions
• Working capital management
• Contract management
• Financial risk management

Finance activities can be summarized by the four Cs: - correct answer ✔✔- Cost minimization

• Cash sufficiency
• Capital access
• Control of financial resources Comptroller does what? - correct answer ✔✔budgets and reports activities and payables and receivables management. Treasurer does what? - correct answer ✔✔- Acquisitions and employment of capital
• Debt management
• Financial risk management There are four major categories of business organization, and they are? - correct answer ✔✔proprietorship (sole proprietorship), partnership, corporation, and hybrid forms. How much does the organizational form influence the practice of healthcare finance? - correct answer ✔✔ What are some of the advantages of proprietorships & partnerships? - correct answer ✔✔ease of formation, subject to few regulations, no corporate income taxes. What are some of the disadvantages of proprietorships & partnerships? - correct answer ✔✔limited life, difficult to transfer ownership, unlimited liability, and difficult to raise capital. What are some advantages of corporations? - correct answer ✔✔unlimited life, easy transfer of ownership, limited liability, and ease of raising capital. What are disadvantages of corporations? - correct answer ✔✔cost of formation and reporting and double (or triple) taxation for investor-owned corporations. Hybrid Forms of Organization's consist of? - correct answer ✔✔- Limited liability partnership (LLP)

• Limited Liability company (LLC)
• Professional corporation (PC) or professional association (PA) Limited liability partnership (LLP) have? - correct answer ✔✔partners that share general business liability, but partners are liable only for their own malpractice actions. Limited Liability company (LLC) have? - correct answer ✔✔members that are taxed like partners, and liability like stockholders. Professional corporation (PC) or professional association (PA) have? - correct answer ✔✔Owners with benefits of incorporation, however; owners are still liable for malpractice. They are also often used by individual clinicians. In most industries, the only form of ownership is the? - correct answer ✔✔investor-owned(for-profit) business. n the health services industry, a significant proportion of businesses, particularly hospitals, are organized as? - correct answer ✔✔not-for-profit corporations. How much does ownership influence the practice of healthcare finance? - correct answer ✔✔ Investors become owners by purchasing shares of? - correct answer ✔✔common stock. Stockholders have? - correct answer ✔✔- right of control
• claim on residual earnings and residual liquidation proceeds
• typically expect a return on their investment in the form of dividends and/or capital gains Investor-owned corporations must pay? - correct answer ✔✔property taxes, income taxes, and sales taxes If a business meets a stringent set of requirements, it can qualify as a? - correct answer ✔✔not-for- profit(nonprofit) corporation.

Nonprofit corporation firms are also called? - correct answer ✔✔tax-exemptor 501(c)(3)or (c)(4) corporations. Not-for-Profit Corporations generally have? - correct answer ✔✔no shareholders. not-for-Profit corporations are exempt from? - correct answer ✔✔property, income, and sales taxes. The primary goal of investor-owned corporations is? - correct answer ✔✔shareholder wealth (stock price) maximization. The primary goal of not-for-profit corporations is? - correct answer ✔✔given by a mission statement, often in terms of service to the community. All businesses have? - correct answer ✔✔stakeholders. Stakeholders have an? - correct answer ✔✔interest (usually financial) in the business. Not-for-profit managers must? - correct answer ✔✔satisfy all stakeholders. For-profit managers are primarily concerned with? - correct answer ✔✔satisfying stockholders. The primary financial goal of investor-owned corporations stems from their? - correct answer ✔✔organizational goal: shareholder wealth (stock price) maximization. The primary financial goal of not-for-profit corporations is to? - correct answer ✔✔ensure the financial viability of the organization. Do NFP hospitals provide community care equal to the value of their tax exemptions? - correct answer ✔✔

Should these hospitals be required to provide indigent (charity) services equal to the tax benefits received? - correct answer ✔✔ Does the difference in financial goals lead to appreciably different behavior? - correct answer ✔✔ Health reform (the Affordable Care Act) has had a significant impact on provider organizations, including the following: - correct answer ✔✔Accountable care organizations (ACOs) Industry consolidation Emphasis on population health Clinical integration Requirement for more data analytics Staffing shortages in selected areas