Healthcare Operations & Management Flashcards

A healthcare administrator is evaluating a capital purchase using net present value (NPV) analysis. A positive NPV indicates:

Answer: The investment is expected to generate more value than its cost

A positive NPV means the present value of expected future cash flows exceeds the initial investment cost, signaling a financially viable project.

In healthcare risk management, an occurrence report (incident report) is primarily used to:

Answer: Document and analyze events that could affect patient safety or organizational liability

Incident reports capture data about adverse events or near-misses to support root cause analysis, quality improvement, and liability management.

Which concept describes the practice of comparing an organization's performance metrics against industry leaders or best-in-class peers?

Answer: Benchmarking

Benchmarking compares an organization's processes and outcomes against top performers or industry standards to identify improvement opportunities.

A medical practice wants to verify that a newly hired physician is licensed, board-certified, and has no malpractice history. This process is called:

Answer: Credentialing and privileging

Credentialing verifies a provider's qualifications and background, while privileging grants specific clinical privileges based on training and competence.

Which of the following best describes a capitation payment model?

Answer: Providers receive a fixed monthly payment per enrolled patient regardless of services used

Capitation pays providers a set amount per patient per month to cover all defined services, shifting utilization risk from the payer to the provider.

An administrator notices that a department's supply costs are 20% above budget. The FIRST step in addressing this variance should be:

Answer: Investigate the root cause of the variance before taking corrective action

Effective budget management requires identifying the underlying cause of a variance—whether due to volume increases, pricing changes, or waste—before implementing solutions.

Under CMS Conditions of Participation (CoPs), hospitals must have a governing body that is responsible for:

Answer: Overall conduct and operation of the hospital

CMS CoPs require hospitals to have a governing body legally responsible for the conduct of the hospital as an institution and for adopting and enforcing bylaws.