Health Econ Final

Including younger Americans from the age of _____, almost half of Americans report they currently use alcohol. 12 14 15 16

12

Since the 1970s, the incidence of obesity has risen from 15% of the U.S. population to 20% 25% 30% 35%

30%

According to the text, in 2012, what percentage of the world's total R&D spending in pharmaceuticals was concentrated in the US? 5% 25% 50% 75%

75%

How does the 80-20 rule pertain to Medicare? The patient always pays 20% and Medicare pays 80%. The patient always pays 80% and Medicare pays 20%. 20% of the spending covers 80% of the people. 80% of the spending covers 20% of the people.

80% of the spending covers 20% of the people.

A health maintenance organization where the physicians are salaried employees of the HMO is called: a group-model HMO. a network-model HMO. a staff-model HMO. a direct-contract HMO.

A staff model HMO

. Nonexcludable and nonrival goods are known as a. Public goods. b. Private goods. c. Efficient goods. . d. Those which are the last to be purchased.

A. Public goods

7. When marginal cost to consumer is artificially low, resources are treated as if they have little value. This leads to_____. a. Overconsumption b. Underconsumption c. Contango d. Backwardation

A. overconsumption

The top ten causes of death in the United States in 2010 included all of the following but Cancer Suicide AIDS Heart disease

AIDS

To address the shortage of physicians on the horizon, it will be necessary to build more medical schools. provide more grants and scholarships for medical education. allow the admission of more foreign-educated physicians. all of these are true.

All are true

In the 19th century hospitals had notorious reputations—questionable places to visit, risky places to stay. What advances changed all this? Development of the germ theory of disease. Advances in medical technology. Availability of health insurance to pay the bills. All of the above

All of the above

Which of the following is a way in which medical care differs from normal economics? Unpredictability of demand Barriers to entry Trust All of the above

All of the above

5. Charging higher prices for one category of patients in order to provide free or subsidized care to another group is called a. price discrimination. b. cost-shifting. c. categorical costing. d. reprehensible and unethical. e. creative accounting.

B. Cost shifting

The 1974 federal legislation that exempted employers from certain state laws governing health insurance was a. COBRA b. ERISA c. CON d. HIPAA e. SCHIP

B. ERISA

The "invisible hand" using Adam Smith's terminology refers to a. government control of the market. b. market forces working through the price mechanism. c. the money supply that serves to keep the economy working smoothly. d. the role of innovation in maintaining a steady rate of growth. e. "behind-the-scenes" policy making to influence how markets allocate scarce resources.

B. Market forces working through the price mechanism

An inferior good has a negative income elasticity is one where the demand curve shifts to the left when income goes up exists only in theory Both a and b are true

Both a and b are true

The most common measure(s) used to evaluate health outcomes is/are Life expectancy at birth. Life expectancy from external causes. Infant mortality. Both a and c.

Both a and c

Which is not a mechanism under Utilization Review? 2nd opinion Case Management Authorization Review Capitation

Capitation

According to recent public opinion polls, what percentage of Americans are satisfied with the quality of the medical care they receive? a. 15 percent. b. 40 percent. c. 65 percent. d. 70 percent. e. 90 percent.

D. 70 percent

The opportunity cost of investing in a new lithotripter (a machine that pulverizes kidney stones with sound waves) is a. defined by the dollar cost of the equipment. b. the same for every health care provider. c. measured by the difference between the expected revenues from selling the services of the lithotripter and the invoice cost of the machine. d. defined by the next best use of the money invested in the equipment. e. impossible to calculate.

D. Defined by the next best use of Money invested in the equipment

The health maintenance organization that contracts with individual physicians or group practices to provide care for a specified group of enrollees is called Page 213 a. a group-model HMO. b. a staff-model HMO. c. a network-model HMO. d. an IPA. e. a direct-contract HMO.

D. an IPA

. Opportunity cost is a measure of a. foregone opportunities. b. value based on the alternative not chosen. c. value in terms of the cost of production. d. the difference between production cost and resource cost. e. both a and b.

E. Both A and B

Which of the following statements is based on positive analysis? a. Individuals without health insurance have less access to physicians' services than those who have health insurance. b. The high cost of health insurance places U.S. firms at a competitive disadvantage with their foreign competitors. c. Employers should be required to provide health insurance for all full-time workers and their dependents. d. none of the above. e. Both a and b.

E. Both a and b

Which is not a provider-side provision? Selective Contracting Utilization Review Risk Sharing Arrangements Effectiveness Committees

Effectiveness Committees

The regulatory agency with oversight responsibility for the pharmaceutical industry is the USDA DEA ATF FDA

FDA

A patient presents to the emergency room with a compound fracture (bone through the skin) of the arm. This patient is intoxicated, wearing a Riff Raff shirt, and has no proof of identification nor insurance coverage. The on call physician asks the patient to please go to another hospital, as they are quite busy. Is this legal? True False

False

Not having health insurance equates to not having access to healthcare True False

False

One unintended consequence of the ACA was more young, healthy people took advantage of the plans than estimated. True False

False

TennCare was, and is a successful attempt to control healthcare costs. True False

False

The Consumer Price Index outpaced the average health insurance premium almost 3:1 from 1984-1991. True False

False

Which of the following is not a true statement concerning infant mortality in the United States? Low birth weight infants have a better chance of survival in the U.S. than either Japan or Norway. International comparisons of infant mortality rates are difficult to interpret due to different definitions of infant death. Teenage pregnancy and illegitimacy are highly correlated with infant mortality. Infant mortality rates are among the lowest in the developed world.

Infant mortality rates are among the lowest in the developed world.

Which is true of Adverse Selection? Too many high risk users result in an unrepresentative risk pool; premiums decrease Low-risk users tend to stay in the group Insurer has difficulty identifying prospective risk and charging premiums that reflect risk Arises because people have less information about expected medical expenditures than insurance companies.

Insurer has difficulty identifying prospective risk and charging premiums that reflect risk

Which is true about the Affordable Care Act of 2010? It saved most people money on health insurance premiums It was largely bipartisan It allowed people with pre-existing conditions to be covered It was widely popular with the public

It allowed people with pre-existing conditions to be covered

Which is not one of the ten key economic concepts we discussed in class? Competition Market Failure Market Analysis Self-Interest

Market Analysis

Which of the following is the incidence and probability of illness or disability? Mortality Morbidity Quality of Life Metallica

Morbidity

Which type of managed care organization has become the most popular (as of 2012)? HMO PPO POS HDHP

PPO

Which single process costs the pharmaceutical company the most in terms of dollars and resources? R&D Incorrect Response Marketing Administration Office Supplies

R&D

What word will policy makers rarely use when it comes to resources? Responsible Rationing Quantity Quality

Rationing

Who largely was against passing the ACA of 2010 Democrats Republicans Independents Everybody hated it

Republicans

Suppose the market for hospital outpatient treatment is in equilibrium when a price ceiling is set below the equilibrium price. What do you expect to happen? Surplus Shortage The # of outpatient visits will decrease The demand for outpatient procedures will fall

Shortage

Which is not a model of an HMO? Group Model Staff Model Social Medicine Model Network Model

Social Medicine Model

Medicare and Medicaid were enacted by the Johnson administration in 1965 as amendments to which federal law already in existence? Welfare Act of 1960. Social Security Act. Employee Retirement and Income Security Act. Managed Care Act.

Social Security Act

Surgical specialists earn more than general/family practice physicians. Which of the following statements is not true regarding this income differential? Surgeons earn more because their practice costs, including medical malpractice insurance is higher. Surgeons earn more to compensate them for the extra years spent as residents. Physicians' incomes are determined to a large extent by supply and demand conditions with respect to each specialty. Surgeons will always earn more than general practitioners because they are smarter than general practitioners. Surgeons earn more than general practitioners because cutting into people is messy.

Surgeons will always earn more than general practitioners because they are smarter than general practitioners.

The dominant factor affecting medical care delivery and finance in the 1960s was the Hill-Burton Act. prospective payment for hospitals. the creation of Medicare and Medicaid. the explosive growth of managed care.

The creation of Medicare and Medicaid

Starting salaries for female OB/GYNs are higher than those of male OB/GYNs. What is the best explanation for this? Female OB/GYNs have more human capital than male OB/GYNs. Female OB/GYNs are smarter than male OB/GYNs. More males are in OB/GYN residency programs than females. The demand for female OB/GYNs is greater than the demand for male OB/GYNs.

The demand for female OB/GYNs is greater than the demand for male OB/GYNs.

Physicians salaries increased substantially over the decade 1995-2005 from an average of $215,000 to $315,000. What is the best explanation for this? Physicians were smarter in 2005 than in 1995. The supply of physicians has increased. The demand for physicians has increased. The demand for physicians has decreased.

The demand for physicians has increased

Suppose the U.S. Drug Enforcement Agency steps up its efforts to control the illegal importation of cocaine into the United States. What is the likely effect on the market for illegal drugs in the United States? The price of cocaine and the quantity imported will both increase. The price of cocaine is likely increase and the quantity entering the country decrease. The price of marijuana, a cocaine substitute grown domestically, will fall.

The price of cocaine is likely increase and the quantity entering the country decrease

3. Because private insurance market cannot provide adequate insurance for those with pre-existing conditions, it becomes a collective responsibility. a. True b. False

True

5. Efficiency is not rewarded in a cost-plus environment. a. True b. False

True

A major factor driving health care reform debate is spending. True False

True

Competition improves efficiency & reduces prices True False

True

Economic thinking about optimal resource allocation is marginal, not all-or-nothing True False

True

Economics recognizes the problem of limited resources and unlimited wants and desires. True False

True

Equilibrium is when the price brings a firm's output decisions into balance with consumer desires True False

True

Every congressional session since 1916 generated at least one piece of federal legislation proposingto modify the system of healthcare delivery. True False

True

Freedom of speech is a negative right. True False

True

In general, managed care delivery is not popular among physicians. True False

True

In general, people spending their own money spend more wisely True False

True

Managed Competition was first introduced under the title "Consumer Choice Health Plan" True False

True

Most developed nations have given up on the market as a primary means of delivering healthcare. True False

True

Much of the increased spending is the result of supply side advances in medicine True False

True

Our desires for guaranteed access and lower costs conflict, and may not be achievable True False

True

People enter into insurance contracts to share the uncertainty of financial risk True False

True

Risk sharing relies mostly on capitation so providers don't overuse unnessesary services. True False

True

The Affordable Care Actfocused on a combination of medicaid expansion and subsidized state insurance exchanges funded by taxes on health insurance, pharmaceuticals, and taxpayers whose incomes exceeding $200,000. True False

True

The US spends more on medical care by almost all measures than any other country in the world True False

True

The change in total revenue resulting from the sale of the output produced by an additional unit of a resource is marginal revenue product. True False

True

The dead-weight loss (Surplus Value) from an excise tax is the lost surplus that results from higher prices and lower output resulting from the tax. True False

True

The principle factor driving demand for healthcare is income. True False

True

Under selective contracting, managed care limits the patient's choice of provider through the use of gatekeepers, closed panels, and preferred providers True False

True

The most important source of funding for Medicare is the federal income tax. a 2.9 percent payroll tax paid by all workers, regardless of their age. proceeds from the Medicare Trust Fund. a tax on the health insurance premiums pay by all group plans.

a 2.9 percent payroll tax paid by all workers, regardless of their age.

Compensatory damages are meant to reimburse for: actual losses, economic in nature actual losses, noneconomic in nature all of the above a and b only

a and b only

What is the deductible for a person who is readmitted to a hospital after surgery on the 24th day, due to a secondary infection? a. 0% b. 20% c. 80% d. 100%

a. 0%

What did DiMasi and colleagues (2003) find the fully capitalized cost for a newly approved drug to be in 2005? Page 294 a. 1.3 billion b. 2.6 billion c. 3.1 billion d. 4.6 billion

a. 1.3 billion

Network model HMOs use _______ to shift financial risk back onto providers. Page 213 a. capitation. b. practice guidelines. c. open panels. d. closed panels. e. formularies.

a. Capitation

What effect did DRGs have on hospital behavior? - a. Fewer admissions b. Longer stays c. Increasing Medicare margins between inception and 2003 d. None of the above

a. Fewer admissions

The most significant expansion of Medicaid since its inception occurred in 1997 and is referred to as a. SCHIP. b. SHIP. c. TANF. d. AFDC.

a. SCHIP

What phrase best describes medical care spending in the United States in 1998? a. Total spending of more than $2 trillion represents 17 percent of GDP and approximately $8,000 per capita. b. Total spending of more than $1 trillion represents 14.8 percent of GDP and almost $6,000 per capita. c. Total spending of less than $1 trillion represents less than 13 percent of GDP and almost $3,000 per capita. d. Total spending is rising at double-digit rates and spending is soaring to over $5,000 per capita. e. Total spending is under control and represents a shrinking percentage of GDP.

a. Total spending of more than $2 trillion represents 17 percent of GDP and approximately $8,000 per capita.

Drugs generally decrease in price when they come off of patent. Page 288 a. True b. False

a. True

Pain, suffering and disfigurement are forms of a. compensatory damages b. punitive damages c. economic damages d. all of the above.

a. compensatory damages

The awarding of a patent provides the innovator with P 298 a. monopoly power b. monopsony power c. unlimited years in which to develop and sell the drug d. guaranteed profits

a. monopoly power

2. Cost-conscious decision-making requires economic self-sufficiency. a. True b. False

a. true

If a price ceiling is to accomplish its intended goal of lowering overall spending, which of the following must be true? Demand must be relatively price inelastic. a. Demand must be relative price elastic. b. Demand must be perfectly inelastic. c. Demand must be perfectly elastic. d. Price elasticity of demand has nothing to do with overall spending.

a.Demand must be relative price elastic.

Factors affecting medical care demand include health status demographic characteristics economic standing all of the above

all of the above

When a physician knows more about alternative treatments than her patients, we say that _______ exists. a. rational ignorance. b. perfect information. c. asymmetric information. d. moral hazard.

asymmetric information

The top 25 most frequently used DRGs accounted for approximately _______ percent of all discharges under Medicare. a. 28. b. 38. c. 48. d. 58. e. 68.

b. 38

. Which of the following would increase the supply of physicians? Page 232 a. Increasing the cost of attending medical school. b. More scholarships and grants to cover medical school tuition. c. Increasing the medical school entrance requirements to include 15 hours of economics. d. Making it easier for plaintiffs to prove medical malpractice claims.

b. More scholarships and grants to cover medical school tuition.

Suppose the U.S. Drug Enforcement Agency steps up its efforts to control the illegal importation of cocaine into the United States. What is the likely effect on the market for illegal drugs in the United States? (Supply and Demand) a. The price of cocaine and the quantity imported will both increase. b. The price of cocaine is likely increase and the quantity entering the country decrease. c. The price of marijuana, a cocaine substitute grown domestically, will fall. d. The policy will have the least impact on those individuals whose demand for drugs is elastic. e. Demand for drugs is highly inelastic and these policies have little or no effect on consumption.

b. The price of cocaine is likely increase and the quantity entering the country decrease

Suppose the market for hospital outpatient treatment is in equilibrium when a price ceiling is set below the equilibrium price. What do you expect to happen? (Figure 2.7 Page 41) a. A surplus will develop. b. A shortage will develop. c. Quantity demanded will decrease. d. The number of outpatient visits will rise. e. The demand for outpatient procedures will fall

b. a shortage will develop

1. Efficient hospitals are prime targets for acquisition. a. True b. False

b. false

For part A coverage of Medicare, the patient pays a deductible approximately equal to the cost of the first day in the hospital; Medicare pays a. for days 2-30. b. for days 2-60. c. for days 2-90. d. for the remainder of the hospital stay, however long it may be

b. for days 2-60

The merger of two community hospitals located in the same geographic market is called a. vertical integration. b. horizontal integration. c. a leveraged buyout. d. a real shame since one of the hospitals will likely close.

b. horizontal integration

The economic argument for legalizing drugs a. is morally bankrupt. b. is based on the assumption that demand is relatively price inelastic. c. shows that economists are all libertarians at heart. d. takes into consideration all the externalities associated with drug use.

b. is based on the assumption that demand is relatively price inelastic.

Inoculation programs against certain diseases such as small pox, polio, and whooping cough create a. public goods. b. positive externalities in consumption. c. nonrival goods. d. nonexcludable goods.

b. postive externalities in consumption

Punitive damages in medical malpractice cases a. ensure that successful plaintiffs receive full compensation for their losses. b. serve the same purpose as criminal & civil penalties, such as jail sentences & fines. c. redistribute income from defendants to successful plaintiffs. d. fully compensate victims for their losses.

b. serve the same purpose as criminal & civil penalties, such as jail sentences & fines.

Economists use the term "marginal" to describe costs and benefits a. that are minimal and hardly worth noting. b. that are incremental and thus relevant to decision making. c. that are noteworthy but not the most important. d. whose importance can be minimized through hard work. e. none of the above.

b. that are incremental and thus relevant to decision making

The Medicare pay-as-you-go system is jeopardized by a. an overly generous fee schedule that pays physicians more than private insurance for most procedures. b. the changing demographics of the U.S. population with an increasing percentage over the age of 65. c. a reliance on the premiums paid by the elderly themselves to fund a majority of the total cost of the system. d. allowing physicians to balance bill their patients. e. the rising costs of long-term care.

b. the changing demographics of the U.S. population with an increasing percentage over the age of 65.

Kaiser-Permanente, the nation's largest health maintenance organization, was founded Page 211 a. to provide cost-effective medical care to Kaiser employees. b. to provide access to medical care to Kaiser workers in remote locations where medical services were in short supply. c. to slow the rate of growth in medical spending for Kaiser employees. d. as a group-model HMO. e. as a network-model HMO.

b. to provide access to medical care to Kaiser workers in remote locations where medical services were in short supply.

Self-insurance refers to: ______________________ a. starting one's own insurance company b. buying insurance from a not for profit entity c. setting aside funds to pay for medical care expenses instead of buying insurance d. none of these e. both a and b

c. Setting aside funds to pay for medical care expenses instead of buying insurance

What is the most significant cost of attending medical school? Page 229 a. Tuition and fees. b. Books and incidentals. c. The income foregone. d. Room and board. e. Pain and suffering.

c. The income foregone

Which of the following statements about the distribution of physicians among specialties is true in the United States? Page 233 a. The majority of physicians specialize in general/family practice. b. There are twice as many generalists as there are specialists. c. There are twice as many specialists as there are generalists. d. The specialty distribution in the U.S. is similar to that of the rest of the world. e. None of the above.

c. There are twice as many specialists as there are generalists.

A shortage of hospital beds will likely lead to (Supply and Demand) a. an increase in the supply of hospital beds. b. a decrease in the demand for hospital beds. c. an increase in the price of a hospital stay. d. a decrease in the price of a hospital stay. e. none of the above.

c. an increase in the price of a hospital stay

. Congressional studies report that Medicare payments fall 11 percent below the cost of treating patients while private insurance patients pay 29 percent more than cost. This phenomenon is called a. price discrimination. b. the Medigap. c. cost-shifting. d. cost-plus pricing.

c. cost-shifting

The dead-weight loss from an excise tax (Page 42) a. is greater if demand is perfectly inelastic. b. is caused by a shift in consumer preferences when the tax is raised. c. is the lost surplus that results from higher prices and lower output resulting from the tax. d. is of little concern to policy makers since all excise taxes are "sin" taxes. e. is the difference between consumer surplus and producer surplus.

c. is the lost surplus that results from higher prices and lower output resulting from tax

One of the most serious weaknesses in the Medicare system is that a. patients are not able to choose their own physicians. b. the definition of an episode of illness is too restrictive. c. it provides poor insurance coverage for unusually long hospital stays. d. patients must pay a deductible every time they enter the hospital. e. Part B is voluntary

c. it provides poor insurance coverage for unusually long hospital stays.

The fastest-growing segment of pharmaceutical marketing is: Page 302 a. marketing to physicians b. marketing to nurse practitioners c. marketing to the consumer d. none of these

c. marketing to the consumer

Horizontal integration allows firms to do all of the following except a. reduce administrative costs. b. create brand identity. c. fully integrate with primary care clinics and acute care nursing facilities. d. take advantage of cost savings due to economies of scale.

c.fully integrate with primary care clinics and acute care nursing facilities.

Which country utilizes single payer national health insurance? South Africa United States Switzerland Canada

canada

Annual deaths from medical issues related to tobacco use are approximately a. 100,000 b. 220,000 c. 330,00 d. 440,000

d. 440,000

Of the new drugs introduced in the United States between 1940 and 1990, what percentage were discovered by U.S. firms? Page 290 a. 15. b. 30. c. 45. d. 60. e. 75.

d. 60

Which type of managed care organization has the strictest cost control features? Page 213 a. Group-model HMO. b. IPA. c. POS plan. d. Closed-panel HMO. e. PPO.

d. Closed-panel HMO.

Which of the following is not a characteristic that makes medical care different from other commodities? a. Demand for medical care is irregular. b. Sellers have more information than buyers. c. Third-party payers abound. d. For-profit providers play a major role in delivering medical care. e. The transaction itself if filled with uncertainty.

d. For-profit providers play a major role in delivering medical care.

4. Economic efficiency measures how well resources are being used; Inefficiency is ______. a. Lost opportunity b. Wasteful c. Inefficient d. All of the above

d. all of the above

Health insurance features that tend to reduce moral hazard include (Page 160) a. deductibles. b. coinsurance c. copayments d. all of the above

d. all of the above

To Control spending growth, policy makers rely on a. Mandated Fee Schedules b. Global Budgeting c. Resource Rationing d. All of the above e. A and B only

d. all of the above

To control moral hazard and the increased spending that accompanies it, managed care providers include _______ in contracts with providers. Page 216-217 a. clinical rules b. capitation c. risk sharing d. all of the above

d. all of the above

U.S. medical care spending is a. higher as measured by overall spending. b. Higher as measured by per capita spending. c. Higher as measured by a percentage of GDP. d. All of the above

d. all of the above

Which of the following is a cost containment feature of a fee-for-service system? a. Use of a gate keeper b. Required second surgical opinions c. Prior certification before hospital admissions d. All of the above

d. all of the above

. Empirical studies that suggest differences in utilization rates between fee-for-service and managed care plans Page 247-250 a. are unreliable due to statistical biases. b. conclude that financial incentives are not the reason for differences in the amount of care physician provide. c. show no differences in health status among patient groups. d. are unable to differentiate between the impacts due to financial incentives and those due to clinical rules.

d. are unable to differentiate between the impacts due to financial incentives and those due to clinical rules.

. Capitation Page 216 a. creates pressures to provide fewer services. b. is a fixed payment determined in advance to pay for all medically-necessary care. c. shifts financial risk onto patients. d. Both a and b are correct.

d. both a and b are correct

Health care that actually harms the patient, such as an adverse reaction to a prescription drug is called (Page 145) a. morbidity-related response. b. defensive medicine. c. adverse selection. d. iatrogenic disease. e. moral hazard.

d. iatrogenic disease

Within the framework of economics, optimization means providing a good or service until (Page 29) a. total benefits are maximized. b. total benefits and total costs are equal. c. marginal benefits exceed marginal costs by the greatest amount possible. d. marginal benefits and marginal costs are equal. e. as long as total benefits are greater than total costs, any amount may be optimal under the right circumstances.

d. marginal benefits and marginal costs are equal

A physician's office expenses increase 10 percent, so she decides to raise the price of office visits. Assuming the demand curve for office visits does not shift, what will happen to the total number of office visits and practice revenues? (Table 2.1 page 35) a. Office visits and total revenue stay the same if demand is elastic. b. Office visits and total revenue rise if demand is inelastic. c. Office visits and total revenue fall if demand is inelastic. d. Office visits will fall and total revenue will rise if demand is inelastic. e. Office visits will rise and total revenue will fall if demand is elastic.

d. office visits will fall and total revenue will rise if demand is inelastic

. Which drug became the first billion dollar a year drug in worldwide sales? Page 291 a. Lipitor b. Nexium c. Crestor d. Tagamet

d. tagamet

The optimal level of output may be defined as that level of output where a. average benefit exceeds average cost by the greatest amount. b. total benefit equals total cost. c. marginal benefit exceeds marginal cost by the greatest amount. d. the marginal benefit of the last unit purchased equals its marginal cost.

d. the marginal benefit of the last unit purchased equals its marginal cost

Which of the following would likely lead to the greatest improvement in health status of the population in the United States? a. Higher per capita incomes. b. More spending on public health, such as improved water supply and sanitation. c. More medical care spending overall. d. Improved lifestyles, including reductions in the use of tobacco, alcohol, and drugs.

d.Improved lifestyles, including reductions in the use of tobacco, alcohol, and drugs.

Which of the following statements is not true about managed care? Slide 12 a. Empirical evidence suggests that managed care can reduce health care spending. b. Most of managed care's savings can be traced to reduced hospitalization. c. There is more emphasis on preventive care in managed care. d. There is no credible evidence to suggest lower quality of care for any group of patients in managed care arrangements.

d.There is no credible evidence to suggest lower quality of care for any group of patients in managed care arrangements.

The U.S. has a higher infant mortality rate than other developed countries. This is most likely a result of a. poor medical care. b. poverty. c. poor access to medical care. d. both b and c are true.

d.both b and c are true.

The concept quality-adjusted life year (QALY) (Page 148) a. is a multidisciplinary approach to measuring health status. b. has little application to medical decision making. c. is used extensively in the U.S. to evaluate health care programs. d. is used extensively to evaluate medical care resource allocation within government-run programs on fixed budgets, especially in Europe. e. none of the above.

d.is used extensively to evaluate medical care resource allocation within government-run programs on fixed budgets, especially in Europe.

An inferior good (Page 32) a. has a negative income elasticity. b. is one where the demand curve shifts to the left when income goes up. c. exists only in theory. d. is a low-quality good. e. Both a and b are true.

e. Both a and b are true

. Suppose the demand curve for medical care services is perfectly inelastic. What will happen to the equilibrium price and quantity if supply increases? (Table 2.1 Page 35) a. Price and quantity will rise. b. Price will stay the same and quantity will rise. c. Price and quantity will fall. d. Price will fall and quantity will increase. e. Price will fall and quantity will stay the same

e. Price will fall and quantity will stay the same

According to economic theory what is the optimal percentage of GDP to be spent on medical care? a. 6 percent. b. 8 percent. c. 10 percent. d. 12 percent. e. There is no widely-accepted way to determine the optimal percentage.

e. There is no widely-accepted way to determine the optimal percentage.

Part of the cause of obesity is that food is cheaper; when something is cheaper a. The demand curve slopes upward. b. The demand curve slopes downward. c. Consumers demand more d. Consumers demand less e. Both b and c are correct.

e. both b and c are correct

The spirit of orphan drugs is to encourage development of drugs that are used to treat rare diseases. This means if you develop an orphan drug, it cannot be used to treat other diseases other than what it was originally developed to treat. Page 291 a. True b. False

false

If health care spending is already on the flat-of-the-curve, it may not be possible to buy improved health status by increasing spending. In this situation, the best way to improve health status may be to increase the availability of government health insurance invest in biotechnology to determine the genetic factors that improve health improve life-style decisions by reducing smoking, alcohol consumption, and drug use improve access to medical care

improve life-style decisions by reducing smoking, alcohol consumption, and drug use

One of the most serious weaknesses in the Medicare system is that patients are not able to choose their own physicians. the definition of an episode of illness is too restrictive. it provides enrollees no protection against catastrophic coverage. Part B is voluntary.

it provides enrollees no protection against catastrophic coverage

Economies of scale exist when long-run average costs decline as output increases. long-run average costs are constant. short-run average costs decline. short-run average costs increase.

long-run average costs decline as output increases.

Pharmaceutical companies receive patents as an exclusive right to produce a drug. This results in lower prices for patients requiring the drug. orphan drug status. monopoly status in the production of the drug. fewer new chemical compounds discovered

monopoly status in the production of the drug.

Modern day economists evaluate markets by efficiency equity effectiveness all of the above only A and B

only A and B

Suppose the demand curve for medical care services is perfectly inelastic. What will happen to the equilibrium price and quantity if supply increases? Price and quantity will rise. Price and quantity will fall. Price will fall and quantity will increase. Price will fall and quantity will stay the same.

price will fall and quantity will stay the same

The dominant factor affecting medical care delivery and finance in the 1980s was the Hill-Burton Act. prospective payment for hospitals. creation of Medicare and Medicaid. the explosive growth of managed care

prospective payment for hospitals.

Which is not true about the uninsured? Most are working poor and their dependents Prior to passage of ACA, many earned too much to qualify for Medicaid Almost 1/3 make less than $25,000/year They have a lesser health status than insured people

they have a lesser health status than insured people

Kaiser-Permanente, the nation's largest health maintenance organization, was founded: to slow the rate of growth in medical spending for Kaiser employees. to provide cost-effective medical care to Kaiser employees. to provide access to medical care to Kaiser workers in remote locations where medical services were in short supply. as a network-model HMO. as a group-model HMO.

to provide access to medical care to kaiser workers in remote location where medical services were in short supply

Though we have millions of Americans uninsured, the percentage of the population has remained about 15 % for the last decade. True False

true

Participation in Part B of Medicare is applicable to nursing home stays involuntary. voluntary. none of the above.

voluntary

Which is not a goal of reform What Is covered? Who is covered? Who pays and how much? Who is healthier?

who is healthier