ANM Financial Management and Budgeting 5

Question 1

An ANM is tasked with reducing length of stay (LOS) to improve financial performance. Reducing LOS primarily improves finances by:

Accepted Answer

Allowing more patients to be treated within the same fixed DRG payment

Answer

Under prospective payment, shorter LOS means the fixed DRG reimbursement covers fewer days of care, improving the margin per case while freeing capacity for additional admissions.

Question 2

When a unit's cost per case is higher than the DRG reimbursement received, the unit is said to be operating at a:

Accepted Answer

Financial loss on that case type

Answer

When costs exceed the fixed DRG reimbursement, the hospital loses money on that case, underscoring the importance of cost management.

Question 3

Fixed costs in a hospital nursing unit are BEST characterized as costs that:

Accepted Answer

Remain constant regardless of the number of patients served

Answer

Fixed costs, such as rent, salaried management positions, and depreciation, do not change with patient volume in the short term.

Question 4

The ANM is comparing two vendors for a medical supply contract. Vendor A has a lower unit price but higher minimum order quantities. The ANM should evaluate this using:

Accepted Answer

Total cost of ownership analysis

Answer

Total cost of ownership accounts for all costs including storage, waste, and ordering frequency, not just unit price, providing a full financial comparison.

Question 5

Which metric is MOST useful for evaluating whether a nursing unit is generating revenue that exceeds its total costs?

Accepted Answer

Operating margin

Answer

Operating margin (operating income divided by net revenue) shows the percentage of revenue remaining after all operating expenses, indicating financial sustainability.

(ANM) Assistant Nurse Manager Certification Practice Test

(ANM) Assistant Nurse Manager Certification Practice Test

ANM Financial Management and Budgeting 5