HCM 480- Section 3

Question 1

Know what happens economically as a result of unemployment and loss of insurance

Answer 1

When demand for medical services goes down- like during periods of unemployment when people lose their insurance coverage. Prices will Decline

Question 2

Generally speaking, when demand for medical services goes down- like during periods of unemployment when people lose their insurance coverage- prices will:
A) Rise gradually
B) Rise sharply
C) Decline
D) Demand and prices are not related

Answer 2

C) Decline

Question 3

Define Deductible

Answer 3

money the patient has to spend out of pocket before insurance will agree to pay for services.

Question 4

Define Premium

Answer 4

amount paid, usually per month, for the insurance policy.

Question 5

Define Co-Payment

Answer 5

a fixed amount the patient pays for different services based on plan benefits.

Question 6

The amount paid by the insured patient directly to the health care provider before he may access any benefits under the insurance contract:
A) Deductible
B) Copayment
C) Coinsurance
D) Premium

Answer 6

A) Deductible

Question 7

The differences between for-profit and not-for-profit hospitals

Answer 7

Mission, Pricing, and Quality; not-for-profit hospitals do not pay state or federal taxes; they don’t distribute profits to shareholders; they can receive tax exempt gifts

Question 8

How are for profit and not-for-profit hospitals the most different?
A) Price
B) Quality
C) Amount of charity care provided
D) Mission

Answer 8

D) Mission

Question 9

What is the difference between For Profit and Not For Profit?

Answer 9

Residual Earnings

Question 10

Which of the following is not a true statement about not-for-profit hospitals?
A) A majority of studies indicate quality of care is much lower in not-for-profit hospitals
B) Not-for-profit hospitals can receive tax-deductible charitable gifts
C) Members of not-for-profit hospitals can be compensated
D) Not-for-profit hospitals are exempt from paying both state and federal taxes

Answer 10

A) A majority of studies indicate quality of care is much lower in not-for-profit hospitals

Question 11

The majority of hospitals in the United States are:

Answer 11

Voluntary not for profit, short stay, general hospitals

Question 12

How is consumer choice limited?

Answer 12

Often employers, not consumers, choose health insurance options. Insurance companies sometimes restrict patients to particular physicians. Patients can’t “walk away” from life-saving services they believe to be overpriced.

Question 13

How is consumer choice limited in the medical market?
A) Often employers, not consumers, choose health insurance options
B) Insurance companies sometimes restrict patients to particular physicians
C) Patients can’t “walk away” from life-saving services they believe to be overpriced
D) All of the above

Answer 13

D) All of the above

Question 14

Define Opportunity Cost

Answer 14

The number of lives that could have been realized if the expenditures were made elsewhere. To consider the opportunity cost, you must know: the marginal cost, the marginal benefit, and the alternatives.

Question 15

Which of the following actions would likely increase competition in the medical market?
A) 30 to 50 million new patients get health insurance foe the first time after passage of federal regulations
B) One of four area hospitals goes out of business after several years of financial hardship
C) Congress lowers the eligibility age of Medicare to 57 years old
D) A financial crisis continues for 3 more years and unemployment rises to a historic high

Answer 15

D) A financial crisis continues for 3 more years and unemployment rises to a historic high

Question 16

Validity indicates that a measurement actually measures what it intends to measure. Which are the more theoretically valid measures of medical care outcomes?
A) Longer life expectancy, lower infant mortality, healthcare costs represent a lower percent of GDP
B) Five years of survival following a diagnosis of cancer, higher treatment rates for persons in the population with hypertension
C) Lower administrative costs but longer wait times
D) All of these are equally valid measures of medical care outcomes

Answer 16

B) Five years of survival following a diagnosis of cancer, higher treatment rates for persons in the population with hypertension

Question 17

Define Medical Loss Ratio

Answer 17

The proportion of costs paid to providers to what is collected by the insurance company.

Question 18

Define Adverse Selection

Answer 18

occurs when high risk individuals have more information on their health status that the insurer and are thus able to buy insurance at the premium based on a lower risk group.

Question 19

Emilio is young, healthy male with a full time job and no significant, family history of health issues- he doesn’t really see the value in paying for health insurance each month/ Martin’s father died of health problems when he was very young. Martin have always been a bit overweight and gets sick several times a year. Who would be the adverse selection?

Answer 19

Martin

Question 20

The idea that chronically ill or high risk people are more likely to desire health insurance know as:

Answer 20

Adverse selection