HCMI 3240 FINAL

Currently, per capita health care spending in the USA is about....

10,500 dollars

The U.S. spends about _____ percent of its GDP on medical care

18 percent

Drug development costs has increased over the years? a) True b) False

A

Patents expire 20 years after they are filed. a) True b) False

A

What did Gawande's article influence?

ACA

Both Medicare and Medicaid have similar eligibility requirements. a) True b) False

B

At the optimal quantity: a) Marginal cost is the lowest. b) Total benefit is the highest. c) Total net benefit is the highest. d) Marginal net benefit is positive.

C

True or False: the lead cause of increased medical spending is the aging of the population

False

Bundled payments

incentives to coordinate across sites of care; shift to low-cost sites; reduce re-admissions

what are the reasons why patients receive too much medical care?

malpractice concerns (76 percent); clinical performance measures (52 percent); inadequate time to spend with patients (40 percent)

"choosing widely" campaign

trying to convince MDs to reduce their use of common tests and procedures that have little/ no value; the american academy of orthopedic surgeons suggested reducing the use of dietary supplements, custom shoe inserts, wrist splints after carpal tunnel surgery, and washing a pained knee with saline solution

examples of adverse hospital events

- Decubitus ulcer (bed sores) - Allergic reaction to a prescription drug - Post-operative hemorrhage and hematoma - Post-operative pulmonary embolism and deep vein thrombosis - Post-operative sepsis (infection of the blood) - Iatrogenic pneumothorax

overall performance of the malpractice system

-1 out of every 16 hospital patients who is injured due to negligence sues, and not all of these win -physicians do not face the full financial consequences of negligent behavior -33 percent of malpractice premiums go to the legal system and administrative costs; takes average of 4 years to resolve a malpractice claim

do physicians have the incentive to improve quality?

-procedures by high-skilled MDs were 39 minutes shorter; percent of patients who experienced complications were 5.4% among high skill and 14.5% among low-skill; high skilled patients less likely to develop wound infection, pneumonia, or internal bleeding

What determines average healthcare spending in a geographic area?

-total spending= price x quantity -demand side factors (income, age, health level of population, etc) -supply side factors (conc. and hospitals and physicians, degree of competition, quantity, etc)

perfect system

1. all patients harmed due to negligence would sue 2. they would all win 3. no patients not harmed, or harmed but not due to negligence, would sue/ win 4. MDs/ hospitals who are sued more often pay higher malpractice ins. premiums

two key objectives of the medical malpractice system

1. compensate patients who are injured due to negligent behavior 2. deter future negligence by creating incentives for MDs, hospitals, and other medical providers to consider their actions/ behavior carefully; and to spend time/ money to improve skills/ processes

actual system

1. only 6% of NY hospital patients harmed due to negligence filed a claim 2. 73% received money 3. 38% of claims are from these patients, but 72% receive 0 dollars and payments are small 4. MDs malpractice premiums are not experience rated; hospitals are

what percent of events are due to preventable medical error?

50 percent

Historically (before 1980s) drugs were generally produced from: a) Chemical substances b) Genetics c) Proteins d) Living organisms

A

John values his own life at $7,000,000 per year. He currently works at Hospital A for a salary of $89,000 per year and has a 3/1,000 chance of death from working in the hospital. Hospital B offers John a job that pays $105,000 per year and has a 3/500 chance of dying from working in the hospital. Using the willingness to pay approach, what is the extra payment per life lost life paid by Hospital A. a) 5333333.333 b) 5.33 c) 2666666.667 d) 2.667 e) 16000

A

Marketing to healthcare professionals, e.g., MDs, receives the highest amount of funds from the pharmaceuticals industry's marketing budget. a) True b) False

A

One reason behind the increased market share of generic drugs is the financial incentives provided by the insurers. a) True b) False

A

Per person hospital stay days went down because of the following, except: a) Aging population b) Those who receive inpatient care spend fewer days in hospitals c) More and more medical conditions can be treated in outpatient settings. d) Improved efficiency of prescription drugs

A

Prescription drugs are not considered as search goods. a) true b) false

A

The DRG Payment System aimed to standardize the way Medicare pays hospitals. a) True b) False

A

What is the maximum amount of the actual premium this person would pay for an insurance policy? A. pure premium B. expected cost of medical care C. expected cost of medical care plus risk premium D. cost sharing E. copay

A

Which of the following currently contributes the most to health care funds in the U.S.? a. Medicare b. Private non-group health insurance c. Out-pocket spending d. Medicaid

A

Which of the following is the best example of moral hazard? A. not putting in an alarm system because you have home owner's insurance B. Leaving a broken headlight out on your car because you cannot afford to get it replaced C. choosing to drive a truck instead of an eco-friendly one D. quitting smoking

A

What is the gatekeeper model used by managed care plans?

AN HMOs gatekeeper chooses a primary care physician, who then controls the enrollee's diagnostic and specialist referrals

ACOs

Accountable Care Organizations; an insurer shares cost savings with a health system and its physicians, or global capitation

Deaths due to Type I error are called "statistical deaths." a) True b) False

B

How are hospitals reimbursed by Medicare according to diagnosis-related groups? a) Hospitals are paid their costs for treating a Medicare patient with a particular diagnosis. b) Hospitals are paid a fixed price according to the Medicare patient's diagnosis. c) Hospitals are paid a fixed price that is the same for all their publicly and privately insured patients—on the basis of their diagnoses. d) Hospitals are paid their fixed costs, which are the same for all their publicly and privately insured patients, plus their variable costs for Medicare patients—on the basis of their diagnoses.

B

More than 75 percent of physicians run their own medical practice and have no partners (solo practice). a) True b) False

B

People who are more concerned about future generations would prefer a lower discount rate in calculating the NPV of social projects a) true b) false

B

Person 1 has a discount rate of 10%, and person 2 has a discount rate of 6%. Which person is more likely to seek preventive medical care? a) Person 1 b) Person 2 c) There is no way to determine d) Both of them e) None of them

B

Physicians are generally unhappy with Medicare payment rates. a) True b) False

B

The cumulative probability of success for the drugs that pass the animal tests stage successfully is typically about 50%. a) True b) False

B

Why would anyone pay more than the pure premium for healthcare insurance?

Because avoiding risk is valuable to consumers

All of the following contributed to improvements in health in the U.S. except: A. Economic growth and improved nutrition. B. Public health programs. C. Reduced obesity rates. D. Improvements in medical care. E. Prescription drug discoveries

C

Cost sharing methods are used primarily to manage A. quality B. adverse selection C. excessive healthcare utilization D. stop loss provision E. DRG

C

If marginal benefit of the Covid-19 vaccine for the next individual is positive, a) She should receive the vaccine b) She should not receive the vaccine c) There is not enough information to answer this question d) She should wait six months to receive the vaccine e) Her case should be re-evaluated in six months.

C

If the net present value of a project equals zero: a) One should invest in the project. b) One should not invest in the project. c) The return on the project equals to the return on the most attractive alternative. d) The discount rate is too high. e) The project term is too long

C

In Phase I (of the drug development process), the proposed drug is given to 20 to 80 healthy volunteers: a) To examine the cost-effectiveness of the drug b) To explore the treatment effectiveness of the drug c) To investigate the safety of the drug d) With the hope of helping those who suffer from severe illness

C

It is difficult to reform the Medicare because a) pharmaceutical manufacturers benefit from drug sales under Part D. b) senior congressional leaders do not want their Medicare benefits changed. c) the Medicare population is opposed to the reform and have high voting-participation rates. d) Medicare reform would likely increase the federal deficit. e) different states have different rates of Medicare participation rates.

C

John values his own life at $7,000,000 per year. He currently works at Hospital A for a salary of $89,000 per year and has a 3/1,000 chance of death from working in the hospital. Hospital B offers John a job that pays $105,000 per year and has a 3/500 chance of dying from working in the hospital. Calculate the differential (extra) pay per-life due to increased death risk by hospital A. a) 1000 b) 18000 c) 16000 d) 15000

C

Managed care plans differ according to the restrictiveness of their provider network and access to specialists. Which types of plans are likely to have the lowest premiums? A. Plans that have the largest ratio of primary care physicians to specialists B. Plans that have the most experience and have been in existence the longest C. Plans that have the most restrictive/narrow provider network D. Plans that have received the highest quality and outcome measures

C

Medicare pays physicians about _______ less than how much private insurers pay on average. a) 5% to 10% b) 40% to 50% c) 20% to 25% d) 75% to 80% e) 45% to 55%

C

What is the difference between coinsurance and deductibles?

Coinsurance is when insurance only covers a fraction of health expenditure; deductible is the amount you have to pay before insurance kicks in

How are we trying to address the shortage of physicians in the United States? a) Increase the supply of medical schools. b) Increase the responsibilities of "physician extenders" c) Incentivize the profession of medicine by making the medical school admissions process more selective. d) Both A and B. e) All of the above.

D

If the USA, regulates (controls) prescription drug prices, the following may be expected in the short run: a) Consumers would be at a loss. b) Drug prices would increase. c) Consumers would benefit. d) Innovation would increase. e) Both consumers and producers would benefit

D

In which of the following specialties, physicians make the lowest income? a) Plastic Surgery b) Orthopedics c) Dermatology d) Pediatrics e) Cardiac surgery

D

John values his own life at $7,000,000 per year. He currently works at Hospital A for a salary of $89,000 per year and has a 3/1,000 chance of death from working in the hospital. Hospital B offers John a job that pays $105,000 per year and has a 3/500 chance of dying from working in the hospital. Calculate the differential risk in mortality between Hospital A and Hospital B. a) 3/500 b) 0.006 c) 6/1000 d) 3/1000 e) 3/100

D

Medicare and Medicaid a) Were enacted in 1965 b) Increased government financing on medical care c) Decreased out of pocket health expenditure d) All of the above

D

Reimbursement is directed towards which group in the health care system? A. Patients/ consumers B. Insurers C. Sponsors D. medical care providers

D

Tax-exempt employer-purchased health insurance A. is of equal value to all employees regardless of their income. B. is primarily preferred by low-income employees who cannot afford health insurance. C. stimulates the demand for high-deductible coverage. D. results in a greater reduction of health insurance price for high-income employees.

D

Which of the following is not a factor behind the persistent growth of U.S. health care spending? A. Innovation: development of new medical technologies B. Expansion of public insurance programs to pay for them C. Generous reimbursement rates to health care providers D. increased cost-sharing by consumers E. Patients don't face the full price of medical care at the point of care

D

D and O program

Disclosure and Offer; if an internal hospital investigation concludes that negligence occurred, hospital and physicians admit fault to patient and offer to pay

At the optimal level of pollution: a) Pollution is the highest b) Pollution is the lowest c) Total benefit of pollution equals total cost of pollution d) Marginal benefit of pollution equals zero e) Marginal net benefit of pollution equals zero

E

In a market-based health care system: A. Choices are decided by a government or a central authority B. The output is uniformly distributed C. The overall healthcare system has a greater ability to exploit any large-sized economies D. The overall healthcare system has a lower ability to exploit any large-sized economies

E

In which quality measure did the United States healthcare system performs equally well or better than other comparable nations? A. Female life expectancy at birth B. Male life expectancy at birth C. Youth life expectancy D. Infant mortality rate per 1,000 births E. Breast cancer 5-year survival rates

E

Which of the following is not among the macro-level public health interventions? a. Filtering and chlorinating water supplies b. Building sanitation systems c. Draining swamps d. Pasteurizing milk e. Producing sulfa drugs

E

True or False: Decentralized health care systems are better suited to achieve large-scale coordination

False

True or False: Health care providers include physicians, hospitals, and insurance companies

False

True or False: In the 18th and 19th centuries, high infant mortality rates were mainly due to premature births

False

True or False: National health expenditure equals medical care personal expenditure

False

True or False: One reason behind why prescription drug expenditures in the USA are higher than they are in similar affluent countries is that Americans are in worse health.

False

True or False: One reason behind why prescription drug expenditures in the USA are higher than they are in similar affluent countries is that Americans consume more medicine on average.

False

True or False: Rationing is a heavily utilized cost containment method in the United States.

False

True or False: The Pareto principle of consumption (also known as the 80-20 rule) does not apply to medical care

False

True or False: The highest amount of healthcare funds in the United States go to public health and home healthcare services

False

PFPs

Pay for performance; higher pay for higher quality, and lower pay for lower quality

how can the quality of care be improved?

Policy 1: health care IT to the rescue (doctors need to resort to literature because too much for one person to actually remember); EMR system Policy 2: publicize information on quality of health plans, physicians, and hospitals, and hope patients shun low-quality providers/ plans; the hope is the increased transparency about quality will induce patients to reduce their demand for low quality providers therefore, providers will increase efforts to improve the quality of care Policy 3: change the way physicians and hospitals are paid to reward high-quality medical care and penalize low-quality care

True or False: Employees within a firm have community-based premiums

True

True or False: Private insurers usually pay MDs by adjusting the Medicare fee schedule. Larger and more powerful physician practices usually receive higher private fees

True

True or False: Pure premium equals expected medical cost

True

True or False: The U.S. health care spending is greater than other comparable nations partly because of higher prices in the USA

True

True or False: The primary purpose of cost-sharing is to reduce adverse selection

True

True or False: The stop-loss provision represents the ceiling (maximum) of the dollar amount that a patient can be hold responsible to pay out of pocket during the policy period

True

True or False: Third party payers include employers and the government

True

When did employer-sponsored healthcare become popular in the U.S.?

WWII

what percent of medicare patients used to be re-admitted to a hospital within 30 days of discharge? how much does it cost?

about 20 percent; about 18 million dollars in additional hospital payments

what percent of doctors receive malpractice claims

about 7.4 percent annually; about 19 percent in neurosurgery and 2.6 in psychiatry

average annual malpractice premiums highest in what specialties

are higher in neuro and OB/GYN

what was the 2003 RAND study by McGlynn

between 1998 and 2000, 6,700 patients' medical records were compared against 439 indicators of quality care for 30 health conditions; on average only 55% of patients were receiving the recommended care; example where only 24% of diabetics received three hemoglobin tests over a 2-year period; only 38 percent of appropriate patients had been screened for colorectal cancer every five years; the authors repeated the study in 2007 for children and only 47% of 2-year olds received recommend medical care

how do OB/GYNs respond to reducing malpractice?

by performing more c-sections

Why is the quality of medical care in the US, by traditional measures, worse than it should be?

four underlying reasons according to the institute of medicine: 1. growing complexity of medicine 2. increase in chronic conditions among patients 3. little financial incentive for physicians/ hospitals to invest time and money to improve quality 4. failure to exploit the revolution in information technology

higher costs appear to be driven by:

greater availability of physicians and hospital beds, uncertainty regarding the best way to treat patients, belief that more care is better, combined with financial, incentives for MDs and hospitals to do more

medical malpractice

harm or injury or death to a patient due to: neglecting to provide appropriate care, omitting to take an appropriate action, providing substandard treatment

With a combination of variable reimbursement to providers and low consumer cost sharing, the likelihood of a large volume of medical expenditures will most likely be ________. high moderate low very low

high

examples of outcome quality

hospital readmission rates, one year mortality upon discharge, medical malpractice is an example of bad outcome quality

What is the Dartmouth group explanation?

it was an explanation for physician practice variations; lack of scientific evidence to guide many clinical decisions creates uncertainty for physicians; when in doubt, patients and physicians believe that more care means better care; physicians and hospitals are rewarded for being busy in a fee-for-service health care system; in areas where there are plenty of specialist physicians and hospital beds, primary care physicians are more likely to refer patients to specialists; specialists then use the expensive medical; technology

how is the quality of medical care measured?

outcome (the impact of care on the patient's health and welfare), process (reflected in the specific actions taken by providers), and structure (reflected in differences in physical and human resources of the provider); outcome quality is the ultimate goal

2009 "stimulus" law

provided strong financial incentives for physicians and hospitals to adopt EMRs -The carrots: an MD who adopted an EMR system in 2011 or 2012 received extra payments of $44,000 from the federal government to defray the start-up cost; an additional $64,000 per physician was available from state Medicaid programs -the stick: MDs who did not adopt an EMR system by 2015, would have their Medicare fees reduced by 5%; hospitals could secure millions of dollars each to help offset the cost of implementing information technology

Medical spending is equal to...

quantity of medical care X price + admin costs

Dartmouth Atlas conclusion

some regions have gone past the flat of the curve; eventually, more medical care actually harms patients

What does Gawande highlight?

the spending differences between McAllen, TX and El Paso, TX; Rochester, MN; and national average where McAllen is the highest average annual medical spending per medicare beneficiary and the least is Rochester MN; national average is 8,000

what percent of malpractice accounts for total health care spending

total direct spending on malpractice (premiums and legal defense costs) accounts for less than 1 percent of total healthcare spending in the US