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HFMA CHFP MODULE 1 BUSINESS OF HEALTHCARE COMPLETE EXAM 2024
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HFMA CHFP MODULE 1 BUSINESS OF HEALTHCARE COMPLETE EXAM 2024
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HFMA CHFP MODULE 1Business of Healthcare
COMPLETE EXAM
2024
A:
1. A hospital is planning to expand its services by adding a new wing with 50
beds and a state-of-the-art diagnostic center. The hospital has conducted a
market analysis and projected the demand and revenue for the new services.
The hospital also has estimated the capital and operating costs of the
expansion project. What is the next step in the financial strategic planning
process for the hospital?
a) Develop a financing plan to raise funds for the project
b) Conduct a sensitivity analysis to assess the impact of uncertainties on the
project
c) Evaluate the feasibility and profitability of the project using financial ratios
and indicators
d) *All of the above*
Rationale: The next step in the financial strategic planning process is to
evaluate the feasibility and profitability of the project using financial ratios
and indicators, such as net present value, internal rate of return, payback
period, break-even point, etc. The hospital also needs to develop a financing
plan to raise funds for the project from various sources, such as debt, equity,
grants, donations, etc. The hospital also needs to conduct a sensitivity
analysis to assess the impact of uncertainties on the project, such as changes
in demand, revenue, costs, interest rates, etc.
2. A primary care clinic is facing increasing competition from other providers
in its service area. The clinic has decided to adopt a differentiation strategy to
attract and retain patients by offering high-quality care and superior
customer service. The clinic has set a goal to achieve a patient satisfaction
score of 90% or higher in the next year. How should the clinic align its
budgeting process with its strategic goal?
a) *The clinic should use a zero-based budgeting approach to allocate
resources based on the needs and priorities of each department and
,program*
b) The clinic should use an incremental budgeting approach to increase or
decrease the budget of each department and program by a fixed percentage
c) The clinic should use a flexible budgeting approach to adjust the budget of
each department and program based on the actual volume of services
provided
d) The clinic should use a performance-based budgeting approach to link the
budget of each department and program to specific outcomes and indicators
Rationale: The clinic should use a zero-based budgeting approach to allocate
resources based on the needs and priorities of each department and program.
This approach allows the clinic to review and justify each expense item in the
budget and eliminate any unnecessary or inefficient spending. This way, the
clinic can ensure that it allocates sufficient resources to support its strategic
goal of achieving high patient satisfaction by offering high-quality care and
superior customer service.
3. A nursing home is facing rising costs due to inflation, regulatory
compliance, staff turnover, and aging facilities. The nursing home has
decided to implement a cost reduction strategy to improve its financial
performance and sustainability. The nursing home has identified several
areas where it can reduce costs, such as purchasing, staffing, utilities,
maintenance, etc. How should the nursing home determine the optimal level
of cost reduction for each area?
a) *The nursing home should use a cost-volume-profit analysis to identify the
break-even point for each area and determine how much cost reduction is
needed to achieve a target profit margin*
b) The nursing home should use a cost-benefit analysis to compare the costs
and benefits of reducing costs in each area and select the option that
maximizes net benefits
c) The nursing home should use a cost-effectiveness analysis to compare the
costs and outcomes of reducing costs in each area and select the option that
minimizes cost per unit of outcome
d) The nursing home should use a cost-utility analysis to compare the costs
and utilities of reducing costs in each area and select the option that
maximizes utility per unit of cost
Rationale: The nursing home should use a cost-volume-profit analysis to
identify the break-even point for each area and determine how much cost
reduction is needed to achieve a target profit margin. This analysis helps the
nursing home to understand how changes in costs, volume, and price affect
its profit. By using this analysis, the nursing home can determine how much
, it can reduce costs in each area without compromising its quality of care or
losing its market share.
4. A health insurance company is planning to launch a new product that
offers comprehensive coverage for chronic diseases, such as diabetes,
hypertension, asthma, etc. The company has conducted a market research
and estimated the potential demand and price elasticity for the new product.
The company also has calculated the expected claims and administrative
costs for the new product. How should the company set the premium price
for the new product?
a) *The company should use a cost-plus pricing method to add a markup
percentage to its total costs per enrollee*
b) The company should use a value-based pricing method to set its price
based on the perceived value of the new product to the customers
c) The company should use a competitive pricing method to match its price
with the prices of similar products offered by its competitors
d) The company should use a demand-based pricing method to set its price
based on the demand and price elasticity for the new product
Rationale: The company should use a cost-plus pricing method to add a
markup percentage to its total costs per enrollee. This method ensures that
the company covers its costs and earns a reasonable profit margin. The
company can adjust its markup percentage based on its target market share,
competitive position, and risk tolerance. This method is suitable for the new
product because it is a relatively standardized and regulated product that
has low price sensitivity among customers.
5. A public health agency is responsible for planning and delivering health
promotion and disease prevention programs in its jurisdiction. The agency
has a limited budget and needs to prioritize its programs based on their
impact and cost-effectiveness. The agency has collected data on the
prevalence, incidence, mortality, morbidity, and quality of life of various
health conditions and risk factors in its population. The agency also has
estimated the costs and outcomes of various interventions for each condition
and risk factor. How should the agency rank its programs using this data?
a) *The agency should use a cost-utility analysis to calculate the incremental
cost-utility ratio (ICUR) for each program and rank them from lowest to
highest ICUR*
b) The agency should use a cost-benefit analysis to calculate the net present
value (NPV) for each program and rank them from highest to lowest NPV
c) The agency should use a cost-effectiveness analysis to calculate the
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