Healthcare Finance Final Exam
Chapters 1-11 Question and answers
100% correct 2025/2026
Organization structure and key positions found in the finance dpt of large healthcare organizations? -
correct answer ✔1-CEO (chief executive officer): responsible for all finance activities within the
organization
2- CFO (chief financial officer): head of the finance dpt...directs two senior managers that help.
Comptroller & treasurer
What is the primary legal issue facing healthcare providers today? - correct answer ✔Professional
liability
2-3 of the major concerns of healthcare managers today? - correct answer ✔*financial concerns is the
major concern*
-The major current concern of CEO's is reimbursement with Medicare, Medicaid, and bad debt losses.
-For CFO's it is balancing clinical and financial issues.
1-2 differences/advantages of being a for-profit organization/investor-owned? - correct answer ✔-may
be either publicly held or privately held.
-The stockholders (aka shareholders) are the owners and they have these basic rights
-also subject to various forms of taxation at the local, state, and federal levels.
1-2 differences/advantages of being a not-for-profit organization? - correct answer ✔-Tax-exempt
corporation.
- Must be organized and run so that it operates exclusively for the public, rather than private interest.
-They have no shareholders, which means no single body of individuals has ownership rights to the firms
residual earnings or exercises control of the firm.
, -They are also exempt from taxation and have the right to issue tax-exempt debt.
Difference between fee for service and capitation reimbursement? - correct answer ✔-FFS
reimbursement provides payment each time a service is provided.
-Capitation is based on the # of covered lives as opposed to the amount of services provided.
What do HMO and PPO stand for? - correct answer ✔-HMO: health maintenance organization
-PPO: preferred provider organization
Which stakeholders have the primary interest in a for-profit organization? - correct answer
✔stockholders
Difference between the income statement and the balance sheet in regards to timing? - correct answer
✔balance sheet is a snapshot in time and the income statement reports results over a period of time
The best cost structure when a provider is capitated? - correct answer ✔fixed cost structure
The best cost structure when a provider is fee-for-service? - correct answer ✔variable cost structure
Two characteristics of effective cost drivers? - correct answer ✔fair and controls costs
What is most likely to be considered non-operating income on the income statement? - correct answer
✔Non-operating income is the earnings of a business that are unrelated to core activities. ex:
contributions, investment income, cafeteria and parking garage operations,
What is most likely considered to be operating income on the income statement? - correct answer
✔Operating income is the earnings of a business directly related to core activities. ex: patient services,
premium revenue, government appropriations
Chapters 1-11 Question and answers
100% correct 2025/2026
Organization structure and key positions found in the finance dpt of large healthcare organizations? -
correct answer ✔1-CEO (chief executive officer): responsible for all finance activities within the
organization
2- CFO (chief financial officer): head of the finance dpt...directs two senior managers that help.
Comptroller & treasurer
What is the primary legal issue facing healthcare providers today? - correct answer ✔Professional
liability
2-3 of the major concerns of healthcare managers today? - correct answer ✔*financial concerns is the
major concern*
-The major current concern of CEO's is reimbursement with Medicare, Medicaid, and bad debt losses.
-For CFO's it is balancing clinical and financial issues.
1-2 differences/advantages of being a for-profit organization/investor-owned? - correct answer ✔-may
be either publicly held or privately held.
-The stockholders (aka shareholders) are the owners and they have these basic rights
-also subject to various forms of taxation at the local, state, and federal levels.
1-2 differences/advantages of being a not-for-profit organization? - correct answer ✔-Tax-exempt
corporation.
- Must be organized and run so that it operates exclusively for the public, rather than private interest.
-They have no shareholders, which means no single body of individuals has ownership rights to the firms
residual earnings or exercises control of the firm.
, -They are also exempt from taxation and have the right to issue tax-exempt debt.
Difference between fee for service and capitation reimbursement? - correct answer ✔-FFS
reimbursement provides payment each time a service is provided.
-Capitation is based on the # of covered lives as opposed to the amount of services provided.
What do HMO and PPO stand for? - correct answer ✔-HMO: health maintenance organization
-PPO: preferred provider organization
Which stakeholders have the primary interest in a for-profit organization? - correct answer
✔stockholders
Difference between the income statement and the balance sheet in regards to timing? - correct answer
✔balance sheet is a snapshot in time and the income statement reports results over a period of time
The best cost structure when a provider is capitated? - correct answer ✔fixed cost structure
The best cost structure when a provider is fee-for-service? - correct answer ✔variable cost structure
Two characteristics of effective cost drivers? - correct answer ✔fair and controls costs
What is most likely to be considered non-operating income on the income statement? - correct answer
✔Non-operating income is the earnings of a business that are unrelated to core activities. ex:
contributions, investment income, cafeteria and parking garage operations,
What is most likely considered to be operating income on the income statement? - correct answer
✔Operating income is the earnings of a business directly related to core activities. ex: patient services,
premium revenue, government appropriations
