Financial Management and Business Strategy Flashcards
7 cards from real CPE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Management and Business Strategy flashcards as text
A hospital is evaluating whether to lease or purchase an MRI machine. Which financial analysis best compares the two options?
Answer: Net present value analysis of lease vs. purchase cash flows
NPV analysis accounts for the time value of money and compares total costs of each financing option across the same period.
Which metric measures how efficiently a hospital uses its assets to generate revenue?
Answer: Asset turnover ratio
Asset turnover ratio is calculated as total revenue divided by total assets, reflecting operational efficiency.
A physician executive notices that accounts receivable days outstanding has increased from 45 to 72 days. This most likely indicates:
Answer: Deteriorating revenue cycle performance
Rising days in accounts receivable signals slower collection, which strains cash flow and may indicate billing or payer issues.
In a SWOT analysis for a physician group considering expansion, a new competitor hospital entering the market would be categorized as:
Answer: Threat
External factors that may negatively impact the organization are classified as threats in a SWOT analysis.
Which of the following best describes a 'contribution margin' in healthcare financial management?
Answer: Revenue minus variable costs for a specific service line
Contribution margin equals revenue minus variable costs, showing how much a service contributes to covering fixed costs.
A medical group is considering adding a new specialty service line. The break-even analysis shows 2,400 patient visits annually are required. If projected volume is 1,800 visits, the executive should:
Answer: Re-examine assumptions or reconsider the investment
Projected volume below break-even means the service line would operate at a loss, requiring re-evaluation of costs, pricing, or volume assumptions.
Which payment model shifts financial risk for patient care most significantly to the provider?
Answer: Global capitation
Global capitation pays a fixed per-member-per-month rate regardless of services used, placing full utilization risk on the provider.