HPA 455 EXAM 1 QUESTIONS
WITH 100% VERIFIED ANSWERS
Business models - Answer- Core elements of an org and how its structured to deliver
value to its customers and generate revenues
Four components to business models (NOVEL) - Answer- 1.Value to customers
2.Input
3. Processes
4.Revenue generation
Problems with the healthcare business models - Answer- -No incentive to keep people
healthy
-Based on treating illness not wellness
-inputs: high cost structures
-Lack of evidence based treatment
First movers - Answer- First in industry; Advantages: tech, acquisition, customer loyalty
Fast followers - Answer- Second in industry; Enjoy free ride, take advantage of rest.
Growth strategies - Answer- 1. Internal expansion
2. Acquisition
3. Network Alliances
Internal expansion - Answer- Developing of new products and services
-less risk
-long time in development
Acquisition - Answer- -Rapid market entry
-Reduced competition
-Instant volume and market acceptance
-High costs
Network Alliances - Answer- -Quick entry with minimal risk
-less control and ability to manage
-possible loss of proprietary knowledge
Vertical expansion - Answer- When an org acquires a business that
Backward expansion: source of suppliers
Forward expansion: an entity that may purchase from the org
, Horizontal integration - Answer- When a similar org merges or is acquired
Diversification: - Answer- Acquisition of orgs in different businesses
Virtual integration - Answer- two orgs come together for common goal, do not mix
Transfer pricing - Answer- Price charged for a transaction between two divisions of an
org
Three methods of transfer pricing: - Answer- 1. Cost based prices
2. Full market pricing
3. Discounted prices
Cost based prices - Answer- Price based on actual fixed and variable costs
Full market pricing - Answer- Price based on actual market prices
Discounted pricing - Answer- Prices discounted from an actual market prices
Four areas of integration: - Answer- 1. Operational integration
2. Intellectual integration
3. Social integration
4. Emotional integration
Accountable Care Organization - Answer- -New approach to hold health care to higher
accountability
-Could pull orgs apart or bring them together
Horizontal expansion - Answer- -Merger of two orgs that produce the same service or
product
-Happens a lot w/ insurance
Two types of horizontal integration - Answer- 1.Widely dispersed
2.Concentrated
Related (concentric) diversification - Answer- -Enters into business that uses similar
tech.
-Offers new products to current offerings
Unrelated (conglomerate) diversification - Answer- -Adds new products or services that
have little or no overlap with current products
Strategic Alliances - Answer- A mutual beneficial long term relationship between two or
more orgs to pursue a set of agreed upon goals to meet a business need
WITH 100% VERIFIED ANSWERS
Business models - Answer- Core elements of an org and how its structured to deliver
value to its customers and generate revenues
Four components to business models (NOVEL) - Answer- 1.Value to customers
2.Input
3. Processes
4.Revenue generation
Problems with the healthcare business models - Answer- -No incentive to keep people
healthy
-Based on treating illness not wellness
-inputs: high cost structures
-Lack of evidence based treatment
First movers - Answer- First in industry; Advantages: tech, acquisition, customer loyalty
Fast followers - Answer- Second in industry; Enjoy free ride, take advantage of rest.
Growth strategies - Answer- 1. Internal expansion
2. Acquisition
3. Network Alliances
Internal expansion - Answer- Developing of new products and services
-less risk
-long time in development
Acquisition - Answer- -Rapid market entry
-Reduced competition
-Instant volume and market acceptance
-High costs
Network Alliances - Answer- -Quick entry with minimal risk
-less control and ability to manage
-possible loss of proprietary knowledge
Vertical expansion - Answer- When an org acquires a business that
Backward expansion: source of suppliers
Forward expansion: an entity that may purchase from the org
, Horizontal integration - Answer- When a similar org merges or is acquired
Diversification: - Answer- Acquisition of orgs in different businesses
Virtual integration - Answer- two orgs come together for common goal, do not mix
Transfer pricing - Answer- Price charged for a transaction between two divisions of an
org
Three methods of transfer pricing: - Answer- 1. Cost based prices
2. Full market pricing
3. Discounted prices
Cost based prices - Answer- Price based on actual fixed and variable costs
Full market pricing - Answer- Price based on actual market prices
Discounted pricing - Answer- Prices discounted from an actual market prices
Four areas of integration: - Answer- 1. Operational integration
2. Intellectual integration
3. Social integration
4. Emotional integration
Accountable Care Organization - Answer- -New approach to hold health care to higher
accountability
-Could pull orgs apart or bring them together
Horizontal expansion - Answer- -Merger of two orgs that produce the same service or
product
-Happens a lot w/ insurance
Two types of horizontal integration - Answer- 1.Widely dispersed
2.Concentrated
Related (concentric) diversification - Answer- -Enters into business that uses similar
tech.
-Offers new products to current offerings
Unrelated (conglomerate) diversification - Answer- -Adds new products or services that
have little or no overlap with current products
Strategic Alliances - Answer- A mutual beneficial long term relationship between two or
more orgs to pursue a set of agreed upon goals to meet a business need
