HCM 641 Final Examination Page 1 of 4

Fall 2021 – Final Examination ONLIN-HCM-641-B02 – Health Care Finance and Reimbursement Professor Michael Burghardt Instructions

• The examination will be graded based on 100 points, although the examination is worth 15% of your total grade for the course.

• No late examinations will be accepted without permission from Professor Burghardt.

• All answers must be typed and doubled spaced. You must leave a 1-inch margin at the left and right side of your pages. You may not use a font larger than 12 points. You must include page numbers of text material.

• You must cite all material used (except class PowerPoint material), using the APA method.

• You must type the question you are answering before you answer the question.

• You must clearly identify the parts of each question you are answering.

• Every examination is an English examination; grammar, spelling and sentence structure will be included in the grading of your answers.

• You must write in complete sentences. You should not use colloquialisms (i.e., ain’t and gonna).

• You must use clear examples to show that you understand the question and the answer. All examples must be health care examples.

• You must explain terms being used.

If you do not follow the above instructions, your grade will be reduced proportionately.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HCM 641 Final Examination Page 2 of 4

Class: HCM 641 – Health Care Finance and Reimbursement

Final Examination

Name:

Total Points 100

Points Lost

Question 1 Conduct a financial and operations analysis using the Harris Memorial Hospital financial statements and information provided in the dashboard for Harris Memorial Hospital. You must include information provided regarding its nearest competitor, Eastside Medical Center and U.S. Medians. You must address at least 10 of the following 13 Critical Performance Drivers:

A. Market Factors

B. Pricing

C. Coding

D. Contract Negotiation

E. Overall Cost

F. Labor Costs

G. Departmental Costs

H. Supply and Drug Costs

I. Service Intensity

J. Non-operating Income

K. Investment Efficiency

L. Plant Obsolescence

M. Capital Position

For each Critical Performance Driver that you choose to analyze, do not leave out any of the Data Elements under that performance driver in Table 11-1!

50

Question 2

Discuss conclusions relating to the above analysis and recommendations to improve the financial performance of the facility.

50

 

Harris Memorial Hospital

Harris Memorial Hospital is a 430-bed facility. It has one primary competitor, Eastside Healthcare, a 170- bed facility. Harris Memorial Hospital is in Jersey, Ohio. The facility owns and operates the Renee Center, which has 27 skilled nursing beds. During 20X7, Harris opened a continuing care hospital with 92 beds.

 

 

 

HCM 641 Final Examination Page 3 of 4

Memorial Hospital and Harris Community Foundation Combined Balance Sheet (in thousands)

December 31, 20X7

December 31, 20X6

Assets

Current Assets

Cash and Cash Equivalents $82,815 $59,696

Assets Limited as to Use, Current Position

5,327 5,088

Accounts Receivable

Patients, Less Allowance for Doubtful Accounts ($25,302 In 20X7 and $23,014 in 20X6)

70,025 59,939

Other 28,990 24,995

Supplies 7,078 6,663

Total Current Assets 194,235 156,381

 

Assets Limited as to Use

For Donor Restricted Purposes 84,440 67,826

Board Designated for Specific Purposes

382,835 378,4 13

Held by Trustees Under Bond Agreements

51,038 25,937

518,313 472,176

Less Current Portion 5,327 5,088

512,986 467,088

Property and Equipment, Net 563,349 458,829

Other Assets 34,476 34,302

Total Assets $1,305,046 $1,116,600

 

Liabilities and Net Assets

Current Liabilities

Accounts Payable $32,572 $24,631

Accrued Expenses and Other Liabilities

58,878 53,725

Due to Third-Party Payers 7380 12,633

Current Maturities of Long-term Debt

4,692 5,908

Total Current Liabilities 103,522 96,897

 

Long-Term Debt, Less Current Maturities

439,597 332,354

Contingent Professional Liabilities

33,260 48,487

Due to Broker 15,128 19,608

Other Liabilities 20,713 5298

Post-Retirement Benefit Obligation, Other Than Pensions

8,207 7,694

Total Liabilities 620,427 510,338

 

Net Assets

Unrestricted 600,179 538,436

Temporarily Restricted 55,213 40,393

Permanently Restricted 29,227 27,433

Total Net Assets 684,619 606,262

Total Liabilities and Net Assets

$1,305,046 $1,116,600

 

 

 

HCM 641 Final Examination Page 4 of 4

Harris Memorial Hospital Combined Statements of Operations (in thousands)

December 31, 20X7

December 31, 20X6

Unrestricted Revenues and Other Support

 

Net Patient Service Revenue $829,005 $774,662

Other Operating Revenue 27,055 29,334

Total Operating Revenue 856,060 803,996

 

Operating Expenses

Salaries and Wages $371,429 $329,668

Employee Benefits 81,532 77,231

Supplies and Purchased Services 228,244 225,497

Advertising 3,072 2,376

Staff Enrichment 10,767 8,591

Occupancy Cost 14,346 13,442

Depreciation 44,392 41,627

Interest 10,974 6,145

Provision for Bad Debts 55,851 57,975

Operating Expenses 820,627 762,552

 

Excess of Revenue Over Expenses 35,433 41,444

 

Non-Operating Gains (Losses)

Contributions, Gifts, And Bequests 3,189 1,318

Net Assets Released from Restrictions for Research Expenditures

14,070 14,574

Research, Education and Other Non- Operating Expenses

(22,980) (24,773)

Change in Interest Rate Swap Value and Put Agreements

1,578 9,397

Investment Income 30,453 18,402

26,310 18,818

Excess of Revenues and Gains Over Expenses and Losses

$61,743 $60,262