MHA 706 MIDTERM EXAM QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS VERIFIED
Alternative forms of business organization
1. proprietorships and partnerships
2. corporations
3. hybrid forms
proprietorships and partnerships
pros: ease of information, subject to a few regulations, no corporation income taxes.
cons: limited life, difficult to transfer, unlimited liability, difficult to raise capital.
corporations
pros: unlimited life, easy transfer of ownership, limited liability, ease of raising capital.
cons: cost of formation and reporting, double or triple tax must be paid.
Hybrid forms of business organizations
LLP, LLC,PC, PA
Non-profit organization
exempt from taxes - goal is to improve community
For-profit organization
investor owned
goal is to maximize shareholder return - owes taxes
agency problem
, hire someone to carry out a job function, but they go out of their interests instead of best
interest of company
Third party payor system
private vs public insurance
private insurance
blue cross blue shield, commercial insurers, self-insurers
public insurance
Medicare and Medicaid both offer services to different levels
safety net
lowest reimbursement rates
reimbursement methods
fee for service
cost based
charged base
prospective payment
capitation
fee for service
payment is tied to amount of services provided (decades ago)
dental industry
cost based
payer pays all allowable cost
ex. payment to critical access hospitals
charged based
WITH COMPLETE SOLUTIONS VERIFIED
Alternative forms of business organization
1. proprietorships and partnerships
2. corporations
3. hybrid forms
proprietorships and partnerships
pros: ease of information, subject to a few regulations, no corporation income taxes.
cons: limited life, difficult to transfer, unlimited liability, difficult to raise capital.
corporations
pros: unlimited life, easy transfer of ownership, limited liability, ease of raising capital.
cons: cost of formation and reporting, double or triple tax must be paid.
Hybrid forms of business organizations
LLP, LLC,PC, PA
Non-profit organization
exempt from taxes - goal is to improve community
For-profit organization
investor owned
goal is to maximize shareholder return - owes taxes
agency problem
, hire someone to carry out a job function, but they go out of their interests instead of best
interest of company
Third party payor system
private vs public insurance
private insurance
blue cross blue shield, commercial insurers, self-insurers
public insurance
Medicare and Medicaid both offer services to different levels
safety net
lowest reimbursement rates
reimbursement methods
fee for service
cost based
charged base
prospective payment
capitation
fee for service
payment is tied to amount of services provided (decades ago)
dental industry
cost based
payer pays all allowable cost
ex. payment to critical access hospitals
charged based
