Eliminate Risk of Failure with AHIP AHM-520 Exam Dumps

The Jade Health Plan used a profitability index (PI) to rank the following capital proposals:

Proposal PI

A0.45

B1.05

This information indicates that, of these two projects, Jade would most likely select:

The following statements are about the capital budgeting technique known as the payback method. Select the answer choice containing the correct statement:

An investor deposited $1,000 in an interest-bearing account today. That sum will accumulate to $1,200 two years from now. One true statement about this transaction is that:

A health plan may experience negative working capital whenever healthcare expenses generated by plan members exceed the premium income the health plan receives.

Ways in which a health plan can manage the volatility in claims payments, and therefore reduce the risk of negative working capital, include:

Accurately estimating incurred but not reported (IBNR) claims

Using capitation contracts for provider reimbursement

The Amethyst Health Plan uses a budgeting approach that requires each line of business within Amethyst's operation to justify its continued operation. Amethyst begins with the premise that no resources will be allocated for the following period unless each dollar to be spent is justified and is shown to be within departmental plans and corporate goals and objectives. The budgeting approach used by Amethyst is known as: