Fundamentals of Healthcare Finance
Terms Questions with complete
solution 2025/2026
healthcare financing - correct answer ✔the system that a society uses to pay for healthcare services
health services organizations - correct answer ✔Those that provide patient care services. Examples
include hospitals, medical practices, clinics, and nursing homes. Also called providers.
accounting - correct answer ✔The measurement and recording of events that reflect the operations,
assets, and financing of an organization.
financial management - correct answer ✔The use of theory, principles, and concepts developed to help
managers make better financial decisions.
Chief Financial Officer (CFO) - correct answer ✔The senior manager (or top finance dog) in a large
organization's finance department. Also called vice president-finance.
The four Cs - correct answer ✔Cost measurement and minimization, cash management, capital
acquisition, and control of resources
comptroller - correct answer ✔The finance department manager who handles accounting, budgeting,
and reporting activities. Pronounced as and sometimes spelled as controller
treasurer - correct answer ✔The finance department manager who handles capital acquisition,
investment management, and risk management activities
,business manager - correct answer ✔The manager responsible for the finance function in a small
healthcare organization, such as a medical practice with one or few clinicians. Also called practice
manager
horizontal system - correct answer ✔A single business entity that owns a group of similar providers,
such as hospitals.
vertical system - correct answer ✔A single business entity that owns a group of related, but not
identical, providers, such as hospitals, medical practices, and nursing homes
The Joint Comission - correct answer ✔The main accreditation body for hospitals and other health
services organizations
general acute care hospital - correct answer ✔A hospital that treats all conditions that require a
relatively short hospitalization (e.g., less than 30 days).
Specialty Hospital - correct answer ✔A hospital that treats patients with a common characteristic or
condition, such as a children's or cancer hospital.
Government hospital - correct answer ✔-A hospital owned by a government entity
-Federal hospitals are owned by the federal government, while public hospitals are owned (or funded)
by state or local governments
private not-for-profit hospital - correct answer ✔A hospital that is not governmental but is operated for
the exclusive benefit of the community
investor-owned hospital - correct answer ✔a hospital that is owned by investors who benefit financially
from its operation. Also called a for-profit hospital.
, Ambulatory (outpatient) care - correct answer ✔Care that is provided to patients who are not
institutionalized. Typical settings include physicians' offices, outpatient surgery centers, and walk-in
clinics.
Long-term care - correct answer ✔Care that is provided in either an institutional or outpatient setting
that covers an extended period of time.
Patient capture - correct answer ✔The concept that once a patient enters the system at one point (e.g.,
a doctor's office), all services needed by that patient will be provided within the system.
Integrated Delivery System (IDS) - correct answer ✔A system that combines the financial and clinical
aspects of healthcare and uses a group of healthcare providers, selected on the basis of quality and cost
management criteria, to furnish comprehensive health services across the continuum of care
licensure - correct answer ✔The process of granting "permission" for healthcare (and other)
professionals to practice. Most professional licenses are granted by states with the goal of protecting
the public from incompetent practitioners.
Certificate of Need (CON) - correct answer ✔A state-directed program that requires healthcare
facilities to submit detailed plans and justifications for the purchase of new equipment, new buildings,
or new service offerings that cost in excess of a certain amount
Cost-containment programs - correct answer ✔state programs that require providers (primarily
hospitals) to submit budgets each year for approval
Professional liability - correct answer ✔The responsibility of organizations and individuals who provide
professional services, such as hospitals and physicians, for losses that result from malpractice.
Legal forms of Business - correct answer ✔proprietorship or partnership, corporation, or hybrid
Terms Questions with complete
solution 2025/2026
healthcare financing - correct answer ✔the system that a society uses to pay for healthcare services
health services organizations - correct answer ✔Those that provide patient care services. Examples
include hospitals, medical practices, clinics, and nursing homes. Also called providers.
accounting - correct answer ✔The measurement and recording of events that reflect the operations,
assets, and financing of an organization.
financial management - correct answer ✔The use of theory, principles, and concepts developed to help
managers make better financial decisions.
Chief Financial Officer (CFO) - correct answer ✔The senior manager (or top finance dog) in a large
organization's finance department. Also called vice president-finance.
The four Cs - correct answer ✔Cost measurement and minimization, cash management, capital
acquisition, and control of resources
comptroller - correct answer ✔The finance department manager who handles accounting, budgeting,
and reporting activities. Pronounced as and sometimes spelled as controller
treasurer - correct answer ✔The finance department manager who handles capital acquisition,
investment management, and risk management activities
,business manager - correct answer ✔The manager responsible for the finance function in a small
healthcare organization, such as a medical practice with one or few clinicians. Also called practice
manager
horizontal system - correct answer ✔A single business entity that owns a group of similar providers,
such as hospitals.
vertical system - correct answer ✔A single business entity that owns a group of related, but not
identical, providers, such as hospitals, medical practices, and nursing homes
The Joint Comission - correct answer ✔The main accreditation body for hospitals and other health
services organizations
general acute care hospital - correct answer ✔A hospital that treats all conditions that require a
relatively short hospitalization (e.g., less than 30 days).
Specialty Hospital - correct answer ✔A hospital that treats patients with a common characteristic or
condition, such as a children's or cancer hospital.
Government hospital - correct answer ✔-A hospital owned by a government entity
-Federal hospitals are owned by the federal government, while public hospitals are owned (or funded)
by state or local governments
private not-for-profit hospital - correct answer ✔A hospital that is not governmental but is operated for
the exclusive benefit of the community
investor-owned hospital - correct answer ✔a hospital that is owned by investors who benefit financially
from its operation. Also called a for-profit hospital.
, Ambulatory (outpatient) care - correct answer ✔Care that is provided to patients who are not
institutionalized. Typical settings include physicians' offices, outpatient surgery centers, and walk-in
clinics.
Long-term care - correct answer ✔Care that is provided in either an institutional or outpatient setting
that covers an extended period of time.
Patient capture - correct answer ✔The concept that once a patient enters the system at one point (e.g.,
a doctor's office), all services needed by that patient will be provided within the system.
Integrated Delivery System (IDS) - correct answer ✔A system that combines the financial and clinical
aspects of healthcare and uses a group of healthcare providers, selected on the basis of quality and cost
management criteria, to furnish comprehensive health services across the continuum of care
licensure - correct answer ✔The process of granting "permission" for healthcare (and other)
professionals to practice. Most professional licenses are granted by states with the goal of protecting
the public from incompetent practitioners.
Certificate of Need (CON) - correct answer ✔A state-directed program that requires healthcare
facilities to submit detailed plans and justifications for the purchase of new equipment, new buildings,
or new service offerings that cost in excess of a certain amount
Cost-containment programs - correct answer ✔state programs that require providers (primarily
hospitals) to submit budgets each year for approval
Professional liability - correct answer ✔The responsibility of organizations and individuals who provide
professional services, such as hospitals and physicians, for losses that result from malpractice.
Legal forms of Business - correct answer ✔proprietorship or partnership, corporation, or hybrid
