Operational planning can be correctly defined as:

A function of establishing the annual budget by accumulating departmental information.

The process by which short-range objectives and actions are established and implemented in accordance with the strategic plan.

An annual process of developing, evaluating and implementing goals based on community needs.

Determining the major types of services offered based on profit margins.

Short-range planning is enhanced if a strategic plan has been adopted because:

Potential program can be eliminated easily if not part of the strategic plan.

Use of space has already been determined.

A frame of reference is already in place.

Operational problems can be quickly resolved.

In the field of healthcare services, which of the following trends has significantly increased the need to develop more comprehensive and more systematic credentialing processes in healthcare facilities?

The increased number of independent healthcare practitioners.

The expansion of governmental regulations covering the operation of healthcare facilities.

The growth of ambulatory healthcare services.

The growth of liability of healthcare facilities for malpractice by health practitioners.

In a sound human resources program, the primary purpose of the job classification system is to:

Develop position descriptions for employees.

Establish a total wage and salary administration program.

Rank jobs by kind and level of work performed.

Define an effective organizational structure.

Which of the following statements best defines increased productivity?

An increase in productivity occurs when the number of units of service rendered in a given year increases over the number rendered in the previous year.

An increase in productivity occurs when an increase occurs in the volume or number of units of service rendered.

An increase in productivity occurs when a reduction occurs in the ratio of hours worked to the number of units of service rendered.

An increase in productivity occurs when an increase occurs in the revenue from a given number of full-time equivalent employees.

Which of the following is the depreciation method that best recognizes changes in the general purchasing power of the dollar and/or changes in the replacement cost of specific assets?

Declining-balance depreciation.

Straight-line depreciation.

Price-level depreciation.

Sum of the years’ digits depreciation.

When third-party policies and programs impede the healthcare facility’s fiscal capacity to renovate and model its plant as routinely scheduled, the healthcare facility—to protect itself—should first:

Delay capital improvements until funds are available.

Reduce the level of operating services

Limit the number of admissions from selected third-party payments sources.

Resort to the regulatory agency to obtain a waiver.

The method referred to as value analysis is used in inventory control activities to:

Make adequate substitutions for requisitioned items.

Reduce the quantity of items issued to the various departments.

Reduce cost without impairing functional efficiency.

Relate quantity and quality of items.

Under generally accepted accounting standards, bad debts are reported as a/an:

Operating expense.

Deduction from net revenue.

Contractual allowance.

Deduction from gross revenue.

Incident reports should be initiated by:

A member of the medical/professional staff or by any employee.

Any person with direct patient-care responsibilities.

The department director or supervisor.

The risk manager/quality assurance coordinator.

The governing authority of a healthcare facility can terminate the privileges of any member of the medical/professional staff:

At any time, if it follows its own adopted procedures.

At any time, with or without due process.

Only if termination is recommended by the medical/professional executive committee.

Only if termination is recommended by the medical/professional staff.

Materials management can best be defined as a system of effective:

Purchasing of materials at the lowest possible cost.

Distribution of materials on a scheduled basis.

Allocation of materials.

Control of inventories.

When facility maintenance is deferred, which of the following outcomes is predictable?

Higher costs.

Lower costs.

Deferred risk.

Higher liability exposure.

The major purpose of a code of ethics for members of a healthcare executives association is to:

Provide guidance to members in their own professional conducts.

Increase public understanding of the professional association.

Provide a framework for disciplining members when necessary.

Provide a framework for annually evaluating professional performance.

The volume that would be realized if each prospective consumer were to purchase a specified amount of a particular service during a defined future time frame is called:

A sales forecast.

A market forecast.

Operational capacity.

Market potential.

As an internal control method, a budget is most commonly used to:

Allow managers to control expenditures in the current year and to justify increases in future budgets.

Provide feedback concerning operational expenditures to the governing authority and to allow management to satisfy the governing authority’s requirements of accountability.

Serve as a numerical specification of plans and to function as a standard of control against which results can be compared.

Allow management to monitor operational expenditures and to justify future requests for decreased or increased expenditures to rate-setting agencies.

The most useful way for a healthcare organization to deal with outside regulatory and credentialing bodies is to:

Identify opportunities to influence political outcomes.

Regularly maintain both formal and informal relationships with these agencies.

Deal with these agencies only in written form so as to have a clear paper trail for subsequent review and analysis.

Provide only the minimum amount of information required to comply with the regulations of the agency.

The cultural climate of an organization affects its recruiting procedure because:

It reduces employee turnover and absenteeism.

Organizations seek applicants whose attitudes, values and goals are consistent with those of the organization.

Applicants who cannot support a given culture will be unwilling to work for that organization.

Applicants look only to organizations that portray a positive cultural climate.

Accident rates among personnel continue to rise and are distributed among all departments. What would be your best initial action in finding a comprehensive solution to this problem?

Form a safety committee of key personnel to review reports of all accidents and make recommendations for corrections.

Require each department head to analyze his/her department’s accidents in order to determine the causes and find methods of correction.

Institute a safety education program by departments.

Recommend that the personnel committee formulate an effective accidentprevention program.

If a physician abuses a patient in the healthcare organization, initial corrective action should be taken by the:

Chief of staff.

Chief of services (department chairman).

Nursing unit supervisor.

Chief executive officer.

A successful healthcare organization usually has a unique and wellarticulated company philosophy that presents a clear picture of the organization’s objectives, norms and values. Employee motivation to support this philosophy would be greatest when the company:

Maintains a program that provides employees with a wide variety of social, cultural and recreational activities.

Emphasizes financial rewards, including strong employee benefits.

Provides a training program that is well communicated, understood by employees and enforced by executive management.

Continues a major effort to articulate employee rights in such areas as grievances, affirmative action and human rights issues.

One of the techniques most frequently used in industry to aid management in interpreting a form’s balance sheet is computation of the acid-test ratio, which is the ratio of:

Current assets to current liabilities.

Total assets to total liabilities.

Cash to short-term department.

Cash, marketable securities and accounts receivable to current liabilities.

The primary reason for the decision to move from a freestanding voluntary facility to an investor-owned healthcare organization:

Economy of scale.

Access to the equity market.

Access to patients.

Improved visibility in the community.

Most products and services enter a period of decline. Unless compelling reasons prevail, continuing a declining product or service is costly because:

Increased turnover of personnel will occur.

Continuation will set an undesirable precedent concerned with maintaining the status quo.

The program will consume a disproportionate amount of management time and delay the search for a replacement.

The organization will be perceived as being insensitive to the marketplace.

After a marketing research problem has been identified, the researcher’s next step is to:

Conduct a literature search.

Conduct focus groups and collect data.

Specify information needs.

Design a data-collection instrument.

Which of the following statements is in accordance with the principle of delegation?

The executive who subscribes to the principle of delegation knows what he/she wants to accomplish and exercises control over the work schedule of subordinates.

An executive explains how he/she wants things done and points out how the subordinate’s contribution fits into the overall plan.

A successful executive gives instructions, telling subordinates exactly how and in what sequence things should be done.

In applying the principle of delegation, an executive makes relatively few decisions personally and frames orders in broad general terms.

Before submission of the annual business plan to the governing authority, the plan should be developed by:

Recommendations from the finance committee, on the basis of its estimate of income for the budget year.

The heads of the profit centers, considering each center’s anticipated revenues and expenses, with the CEO collating.

Key executives, after receiving recommendations from the head of operating divisions.

The heads of the operating divisions, with the CEO collating.

Memorial Hospital offers a screening test as a public service for $0.50 per test. Variable costs per unit are $0.32. Fixed costs are $43,200 per month for the department performing the test. It is the only test done by this special department. The break-even point in tests is:

240,000 tests.

172,000 tests.

135,000 tests.

86,400 tests.

A positive net present value indicates that the investment has a rate of return:

Higher than the discount rate used in the calculation.

Lower than the discount rate used in the calculation.

Equal to the discount rate used in the calculation.

Equal to the accounting profit averaged over the life of the investment.

The asset turnover ratio is useful in measuring managerial performance because it indicates the:

Amount of resources required to generate a dollar of revenue.

Profitability per dollar of revenue.

Effectiveness of capital structure decisions.

Effective use of current assets.

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