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HSM 340 Health Services FinanceWeek 3 Discussions and QuizWeek 3 DQ 1Discuss the four types of costs that might be relevant when considering alternative projects.Week 3 DQ 2Describe how cost information relates to the three key activities of management: planning, budgeting, and control.Week 3 Quiz1. Question : (TCO 3) From a hospital’s perspective, what is most likely to be the highest risk arrangement with a payer? 2. Question : (TCO 3) SKF Primary Care Clinic is deciding whether to purchase MRI equipment that would enable it to perform MRI imaging services in-house rather than sending its patients to its competitor’s hospital three miles away. From a financial position, if SKF were to make its decision without using net present value analysis, the clinic would need to know (or at least reasonably estimate) which of the following information? 3. Question : (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: 4. Question : (TCO 3) Which of the following is the first step in any budgetary process? 5. Question : (TCO 3) David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer the question. 6. Question : (TCO 3) Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases (major joint procedures). They have offered a flat price of $10,000 per case. You have reviewed your charges for MS-DRG 470 during the last year and found the following profile:The HMO in the above example has indicated that their doctors use less expensive joint implants. If this less expensive implant were used, your medical supply charges would be reduced by $2,000. What is the estimated reduction in variable cost?

HSM 340 Health Services FinanceWeek 3 Discussions and QuizWeek 3 DQ 1Discuss the four types of costs that might be relevant when considering alternative projects.Week 3 DQ 2Describe how cost information relates to the three key activities of management: planning, budgeting, and control.Week 3 Quiz1. Question : (TCO 3) From a hospital’s perspective, what is most likely to be the highest risk arrangement with a payer? 2. Question : (TCO 3) SKF Primary Care Clinic is deciding whether to purchase MRI equipment that would enable it to perform MRI imaging services in-house rather than sending its patients to its competitor’s hospital three miles away. From a financial position, if SKF were to make its decision without using net present value analysis, the clinic would need to know (or at least reasonably estimate) which of the following information? 3. Question : (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: 4. Question : (TCO 3) Which of the following is the first step in any budgetary process? 5. Question : (TCO 3) David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer the question. 6. Question : (TCO 3) Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases (major joint procedures). They have offered a flat price of $10,000 per case. You have reviewed your charges for MS-DRG 470 during the last year and found the following profile:The HMO in the above example has indicated that their doctors use less expensive joint implants. If this less expensive implant were used, your medical supply charges would be reduced by $2,000. What is the estimated reduction in variable cost?

HSM 340 Health Services FinanceWeek 3 Discussions and QuizWeek 3 DQ 1Discuss the four types of costs that might be relevant when considering alternative projects.Week 3 DQ 2Describe how cost information relates to the three key activities of management: planning, budgeting, and control.Week 3 Quiz1. Question : (TCO 3) From a hospital’s perspective, what is most likely to be the highest risk arrangement with a payer? 2. Question : (TCO 3) SKF Primary Care Clinic is deciding whether to purchase MRI equipment that would enable it to perform MRI imaging services in-house rather than sending its patients to its competitor’s hospital three miles away. From a financial position, if SKF were to make its decision without using net present value analysis, the clinic would need to know (or at least reasonably estimate) which of the following information? 3. Question : (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: 4. Question : (TCO 3) Which of the following is the first step in any budgetary process? 5. Question : (TCO 3) David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer the question. 6. Question : (TCO 3) Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases (major joint procedures). They have offered a flat price of $10,000 per case. You have reviewed your charges for MS-DRG 470 during the last year and found the following profile:The HMO in the above example has indicated that their doctors use less expensive joint implants. If this less expensive implant were used, your medical supply charges would be reduced by $2,000. What is the estimated reduction in variable cost?

HSM 340 Health Services FinanceWeek 3 Discussions and QuizWeek 3 DQ 1Discuss the four types of costs that might be relevant when considering alternative projects.Week 3 DQ 2Describe how cost information relates to the three key activities of management: planning, budgeting, and control.Week 3 Quiz1. Question : (TCO 3) From a hospital’s perspective, what is most likely to be the highest risk arrangement with a payer? 2. Question : (TCO 3) SKF Primary Care Clinic is deciding whether to purchase MRI equipment that would enable it to perform MRI imaging services in-house rather than sending its patients to its competitor’s hospital three miles away. From a financial position, if SKF were to make its decision without using net present value analysis, the clinic would need to know (or at least reasonably estimate) which of the following information? 3. Question : (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: 4. Question : (TCO 3) Which of the following is the first step in any budgetary process? 5. Question : (TCO 3) David Jones, the new administrator for a surgical clinic, was trying to determine how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer the question. 6. Question : (TCO 3) Your hospital has been approached by a major HMO to perform all their MS-DRG 470 cases (major joint procedures). They have offered a flat price of $10,000 per case. You have reviewed your charges for MS-DRG 470 during the last year and found the following profile:The HMO in the above example has indicated that their doctors use less expensive joint implants. If this less expensive implant were used, your medical supply charges would be reduced by $2,000. What is the estimated reduction in variable cost?

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