HSM 340 Midterm exam

1. (TCO 4) Budgets normally cover a period of:

2. (TCO 4) The flexible budget attempts to improve the recognition of deviations caused by changes in:

3. (TCO 4) Because prices are often fixed in the health care industry, it is increasingly important to:

4. (TCO 3) Estimate the total variable cost (i.e., including both routine and ancillary) per MSDRG 505 using the departmental cost/charge ratios and variable cost percentages. (Your answer might be slightly different due to rounding. Pick the closest.)

Your hospital has been approached by a major HMO to perform all their MSDRG 505 cases (foot surgeries). They have offered a flat payment of $8,000 per case. You have reviewed your charges for MSDRG 505 during the last year and found the following profile:

Average Charge: $11,300
Average LOS: 4.5 Days

5. (TCO 3) Assume that the clinic used the price that they need to exactly break even at 10,000 shots. Fewer people than expected showed up and purchased the flu shot. The clinic would

6. (TCO 2) The heading of every financial statement should contain the

7. (TCO 2) The _____ is a way for organizations to improve the collection and communication of financial and operating information.

1. (TCO 4) Based on the below information, what dollar effect did the increased admission rate have on cost?

You have been asked by management to explain the variances in costs under your inpatient capitated contract. The following data is provided. Use the following data to calculate the variances.
	Budget	Actual
Inpatient Costs	$12,568,500	$16,618,350
Members	42,000	42,000
Admission Rate	0.070	0.095
Case Mix Index	0.90	0.85
Cost per Case (CMI = 1.0)	$4,750	$4,900

2. (TCO 4) Based on the information below, what rate must be set to generate the required $80,000 in profit in the preceding example?

You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:

Budgeted Procedures	$10,000
Budgeted Cost	$400,000
Desired Profit	$80,000

It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below

3. (TCO 4) What is the amount of variance that is attributed to the difference between the budgeted and actual wage rate per hour?

Use the following data to calculate the variances.
The following information has been prepared for a home health agency.