Economic Evaluation in Healthcare Study Guide Questions
Course Introduction
Economic Evaluation in Healthcare introduces students to the fundamental methods and applications of economic evaluation in the context of healthcare decision-making. The course covers key concepts such as cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis, providing practical tools to assess the value and efficiency of healthcare interventions and policies. Students will learn how to identify, measure, and compare costs and outcomes, critically appraise published economic evaluations, and understand the implications for healthcare resource allocation. Emphasis is placed on real-world case studies and the ethical considerations involved in maximizing health outcomes within constrained budgets.
Recommended Textbook
Health Economics 6th Edition by Rexford
E. Santerre
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16 Chapters
240 Verified Questions
240 Flashcards
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Page 2
Chapter 1: Introduction
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Sample Questions
Q1) All points along the production possibilities frontier maximize equity.
A)True
B)False
Answer: False
Q2) The components of the three-legged stool of medical care are _______.
A) costs, access, efficiency
B) costs, equity, access
C) access, equity, efficiency
D) efficiency, costs, quality
E) costs, access, quality
Answer: E
Q3) _______ is the largest source of health care funds in the U.S.
A) Out-of-pocket
B) Medicaid
C) Medicare
D) Private health insurance
E) Workers' compensation
Answer: D
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Chapter 2: Health and Medical Care: an Economic Perspective
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Sample Questions
Q1) The _______ states that distribution of income directly impacts health.
A) absolute income hypothesis
B) relative income hypothesis
C) relative position hypothesis
D) income inequality hypothesis
E) absolute position hypothesis
Answer: D
Q2) Better macroeconomic conditions have a positive overall impact on health.
A)True
B)False
Answer: False
Q3) _______ occurs when more patients are treated by a new medical intervention.
A) Income inequality
B) Treatment substitution
C) Social influence
D) Environmental impact
E) Treatment expansion
Answer: E
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Chapter 3: Cost and Benefit Analysis
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Sample Questions
Q1) Rationality implies that people will always make the correct choice.
A)True
B)False
Answer: False
Q2) Which of the following is a limitation of cost-benefit analysis?
A) Difficulty choosing the correct discount rate
B) Difficulty measuring the value of a human life
C) Difficulty measuring the dollar value of gains / losses in utility
D) Both a and c are correct
E) All of the above
Answer: E
Q3) The _______ equates the value of a life to the market value of the output produced by an individual during his / her expected lifetime.
A) willingness-to-pay approach
B) cost-benefit approach
C) cost-effectiveness approach
D) human capital approach
E) cost-utility approach
Answer: D
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Page 5
Chapter 4: Health Care Systems and Institutions
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Sample Questions
Q1) Which of the following refers to a situation where the health insurer reimburses 100% of the amount spent on medical services?
A) Patient Protection and Affordable Care Act of 2010
B) Managed care
C) Coinsurance
D) First dollar coverage
E) both c and d
Q2) Not-for-profit firms rely on _______ for initial capital.
A) ownership investments
B) pre-orders
C) donations
D) tax exemptions
E) non-distribution constraints
Q3) Medical care providers in the U.S. are reimbursed through the use of _______.
A) fixed payment systems
B) variable payment systems
C) out-of-pocket fees
D) All of the above
E) both a and c
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Page 6
Chapter 5: The Demand for Medical Care
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Sample Questions
Q1) When will the marginal utility per dollar spent on medical care equal the marginal utility per dollar spent on entertainment for a consumer?
A) This will only occur when the consumer becomes ill.
B) This will only occur when the consumer is healthy.
C) This will only occur if the consumer seeks to maximize utility.
D) This will only occur if the consumer does not enjoy most forms of entertainment.
E) This will never occur.
Q2) A negative income elasticity of demand for out-patient services would imply that it is an inferior good.
A)True
B)False
Q3) Since the demand for medical care is derived from the demand for good health, an increase in income will decrease the demand for medical care.
A)True
B)False
Q4) Demand for most medical services in the U.S. has been found to be inelastic.
A)True
B)False
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Chapter 6: The Demand for Medical Insurance: Traditional and Managed Care Coverage
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Sample Questions
Q1) Individuals with higher annual incomes possess a greater incentive to purchase more comprehensive health insurance coverage.
A)True
B)False
Q2) An increase in income tax rates _______ the opportunity cost of purchasing employer-sponsored health insurance.
A) increases
B) decreases C) does not affect
D) eliminates E) transfers
Q3) If Sarah has an income of $50,000 when healthy, and faces a probability of 0.15 of losing $10,000 of this due to an illness, what is her expected income?
A) $17,500
B) $40,000
C) $48,500
D) $44,000
E) $16,000
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Chapter 7: Medical Care Production and Costs
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Sample Questions
Q1) If a hospital is cost-minimizing, then the marginal productivity per dollar spent on physicians must be equal to the marginal productivity per dollar spent on nurses.
A)True
B)False
Q2) Assuming that a hospital seeks to minimize total costs, what should it do if the marginal productivity per dollar spent on nurses is less than the marginal productivity per dollar spent on physicians?
A) The hospital should utilize more nurses and fewer physicians.
B) The hospital should utilize fewer nurses and more physicians.
C) The hospital should utilize fewer nurses and fewer physicians.
D) The hospital should utilize more nurses and more physicians.
E) There is not enough information to determine the appropriate action.
Q3) Short-run average variable costs decrease initially, but then begin to rise due to diminishing marginal productivity of labor.
A)True
B)False
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9
Chapter 8: Structure, Conduct, Performance, and Market Analysis
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Sample Questions
Q1) If there is an increase in the number of registered nurses and the demand for medical services remains unchanged, what should be expected to happen to the real hourly wage for registered nurses?
A) The real hourly wage should increase.
B) The real hourly wage should only increase if the demand for medical services is inelastic.
C) The real hourly wage should only decrease if the demand for medical services is elastic.
D) The real hourly wage should decrease.
E) The real hourly wage should only increase if the demand for medical services is elastic.
Q2) If the real hourly wage paid to physicians increase, the real hourly wage paid to nurses will _______.
A) increase
B) decrease
C) stay the same
D) increase only if the number of physicians increases
E) none of the above
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Chapter 9: Government, Health, and Medical Care
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Sample Questions
Q1) Medical care is a public good, as it is both non-rival and non-excludable.
A)True
B)False
Q2) Medicare and Medicaid are both demand-side subsidies.
A)True
B)False
Q3) Suppose a hospital agrees not to charge an insurer a higher price than any other insurer. This would be an example of a _______.
A) exclusive dealing contract
B) most favored nation clause
C) tying contract
D) price ceiling
E) both a and b
Q4) Cigarette smoking is an example of _______.
A) positive demand-side externality
B) negative supply-side externality
C) no externality
D) negative demand-side externality
E) positive supply-side externality
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Chapter 10: Government As Health Insurer
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Sample Questions
Q1) Doughnut hole benefits refers to the system of coverage under _______.
A) Medicare Part A
B) Medicaid
C) Medicare Part C
D) Medicare Part D
E) Medicare Part B
Q2) The majority of financing for Medicaid programs comes from _______.
A) the federal government
B) state governments
C) individual premiums
D) charitable care
E) none of the above
Q3) The Diagnosis-Related Groups System is a prospective payment system used by Medicare to reimburse physicians for medical care.
A)True
B)False
Q4) At the age of 65, individuals are automatically enrolled in Medicare Part B.
A)True
B)False
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Chapter 11: The Private Health Insurance Industry
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Sample Questions
Q1) _______ occurs when insurance companies structure plans that provide an incentive for healthier consumers to enroll while discouraging enrollment of higher-risk individuals.
A) Moral Hazard
B) Asymmetric Information
C) Cherry-picking
D) Guaranteed renewability
E) Adverse Selection
Q2) Which of the following reasons might explain why health insurance purchased as a group might be less costly than coverage purchased individually?
A) Greater bargaining power
B) Risk spreading over a larger number of people
C) Lower marketing costs for the provider
D) Both a and b
E) All of the above
Q3) People obtaining health insurance as part of a group are likely to pay higher premiums than those who acquire coverage individually.
A)True
B)False
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Page 13
Chapter 12: The Physician Services Industry
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Sample Questions
Q1) Using a staff-model HMO, if there is an increase in the wages of physicians, how would the HMO likely respond to provide its current level of medical care?
A) Increase the number of physicians and decrease the number of physician extenders utilized.
B) Decrease the number of physicians and decrease the number of physician extenders utilized.
C) Increase the number of physicians and increase the number of physician extenders utilized.
D) Decrease the number of physicians and increase the number of physician extenders utilized.
E) None of the above
Q2) What are the two primary goals of the malpractice system?
A) Reduce the number of claims and deter negligence
B) Compensate victims and deter negligence
C) Reduce the number of claims and limit the size of awards
D) Increase the number of claims and compensate victims
E) none of the above
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14
Chapter 13: The Hospital Services Industry
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Sample Questions
Q1) An increased HMO presence in insurance markets will likely increase premiums for consumers.
A)True
B)False
Q2) The managerial expertise model helps to explain why executives of non-profit hospitals may be overcompensated.
A)True
B)False
Q3) Which of the following reasons might serve as a barrier to entry within the hospital services industry?
A) Scale economies
B) Standardized products
C) Certificate of need
D) Both a and c
E) All of the above
Q4) Certificates of need promote price competition amongst hospitals.
A)True
B)False
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Page 15
Chapter 14: The Pharmaceutical Industry
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Sample Questions
Q1) Patents award pharmaceutical firms the sole right to produce a product for _______ years and _______ the financial incentive for firms to develop new drugs.
A) 25; increase
B) 18; decrease
C) 20; increase
D) 15; increase
E) 25; decrease
Q2) While pharmaceutical manufacturers compete in a _______ concentrated industry than pharmacy benefit management companies, mergers between the two help to _______ costs.
A) less; increase B) less; decrease
C) more; increase D) more; decrease E) similarly; decrease
Q3) The U.S. government decreases competition within the pharmaceutical industry through the issuing of patents.
A)True
B)False
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Page 16
Chapter 15: The Long-Term Care Industry
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Sample Questions
Q1) Which of the following might cause an increase in the demand for long-term care?
A) Aging population
B) Increased prevalence of HIV
C) Advances in medical technology
D) Increased utilization of primary care
E) Increased health
Q2) Retrospective payment systems _______ costs, _______ quality, and result in _______ severe patient case-mixes.
A) raise; diminish; more
B) raise; improve; less C) decrease; improve; more D) raise; improve; more E) decrease; diminish; less
Q3) Evidence suggests that nursing homes can substantially reduce their average total cost of production by increasing the amount of patients served due to substantial economies of scale.
A)True
B)False
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Chapter 16: Health Insurance Reform
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Sample Questions
Q1) _______ spends more per capita on medical care than all other developed countries.
A) The United Kingdom
B) Canada
C) The United States
D) Switzerland
E) Germany
Q2) Which of the generic health plans would provide the greatest variety of insurance plan offerings?
A) Managed competition
B) National health insurance
C) Medical savings accounts
D) Individual mandates
E) Both a and c
Q3) While the U.S. spends more per capita on medical care, it possesses the lowest infant mortality rate amongst developed countries.
A)True
B)False
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