1. Question : (TCO 4) Your hospital has just been told that all of your cardiovascular surgeons are transferring their practice to a competitive hospital beginning next year. How would this affect a forecast of volume?

Student Answer: First and foremost, if a hospital is suddenly lost all of its cardiovascular surgeons...heads will roll. However, if there are a major lost of service such as the cardiovascular surgeon...there will be a decrease in the volume due to the lost of services. Thus when the hospital have a reduce in the total volume it will also have a reduce in total cost. If the hospital is operating under statistics budget...in the long run, through the development or discontinuation of certain programs volume may be changed, most healthcare firms implicitly assume while developing their statistics budget that they cannot affect their overall volume during the next budgetary period. (Essentials of Health Care Finance, 7th Edition. Jones & Bartlett Publishers p. 362).

2. Question : (TCO 7) Explain the difference between a horizontal merger and a vertical merger.

Student Answer: Horizontal mergers involve two firms operating in the same kind of business...i.e...The merger between Hospital A and Hospital B is considered to be a horizonal mergers. Both have the same service or product. Vertical mergers A merger between two companies producing different goods or services for one specific finished product..i.e..Laboratory services and Radiology services...these two have different services or products thus it considered a vertical mergers. (Essentials of Health Care Finance, 7th Edition. Jones & Bartlett Publishers p. 443).

3. Question : (TCO 1) Describe the Outpatient Code Editor.

Student Answer: A software package developed to review each HCPCS code to ensure accurate coding of claim data. An Intergrated Outpatient Code Editor will