Question Details

HSM 340 Week 3 Quiz

Question 1.	Question :	(TCO 3) When considering how changes in volume affect total fixed costs, it is important to consider:

 	

Question 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?

 	
 			 



Question 3.	Question :	(TCO 3) Your controller has told you that the marginal profit of DRG 209 (major joint procedure) for a Medicare patient exceeds the marginal profit for an average charge patient. Why might this occur?

 	


 	



Question 4.	Question :	(TCO 3) What is the main reason that relative value units (RVUs) often are used in health care?

 	
	



Question 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.
 	Square Footage	Direct Expenses	Lab Tests
Utilities	 	200,000	 
Administration	2,000	500,000	 
Laboratory	2,000	625,000	 
Day-op Suite	3,000	1,400,000	4,000
Cystoscopy	1,500	350,000	500
Endoscopy	1,500	300,000	500
Total	10,000	3,375,000	5,000

Based on the scenario above, what are the Day Op Suite's total expenses?

 	
 


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:
Average Charge	$15,000	 
Average LOS	5 Days	 
Routine Charge	$3,600	Cost/Charge 0.80	Variable Cost % 60
Operating Room	2,657	0.80	80
Anesthesiology	293	0.80	80
Lab	1,035	0.70	30
Radiology	345	0.75	50
Medical Supplies	4,524	0.50	90
Pharmacy	1,230	0.50	90
Other Ancillary	1,316	0.80	60
Total Ancillary	$11,400	0.75	50

Estimate the variable cost per MS-DRG 470 using the departmental cost/charge ratios and variable cost percentages.

 	



 	


Question 7.	Question :	(TCO 3) How are costs classified?