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
Total Points 100
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
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!
Discuss conclusions relating to the above analysis and recommendations to improve the financial performance of the facility.
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
Cash and Cash Equivalents $82,815 $59,696
Assets Limited as to Use, Current Position
Patients, Less Allowance for Doubtful Accounts ($25,302 In 20X7 and $23,014 in 20X6)
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
Less Current Portion 5,327 5,088
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
Accounts Payable $32,572 $24,631
Accrued Expenses and Other Liabilities
Due to Third-Party Payers 7380 12,633
Current Maturities of Long-term Debt
Total Current Liabilities 103,522 96,897
Long-Term Debt, Less Current Maturities
Contingent Professional Liabilities
Due to Broker 15,128 19,608
Other Liabilities 20,713 5298
Post-Retirement Benefit Obligation, Other Than Pensions
Total Liabilities 620,427 510,338
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
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
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
Research, Education and Other Non- Operating Expenses
Change in Interest Rate Swap Value and Put Agreements
Investment Income 30,453 18,402
Excess of Revenues and Gains Over Expenses and Losses
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