Health Care Management
Midterm Exam
Course Introduction
Health Care Management is a dynamic course designed to introduce students to the principles and practices involved in leading and organizing health care institutions. The course explores topics such as the structure of health care systems, strategic planning, quality improvement, leadership, financial management, human resource management, and the impact of health policy and regulations. Students will examine contemporary challenges, ethical considerations, and emerging trends in the field, preparing them to effectively manage resources and teams in various health care settings. Through real-world case studies and practical applications, learners develop foundational knowledge and skills essential for successful careers in health care administration and management.
Recommended Textbook
Health Care Economics 7th Edition by Paul J. Feldstein
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18 Chapters
357 Verified Questions
357 Flashcards
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Page 2
Chapter 1: An Introduction to the Economics of Medical Care
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20 Verified Questions
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Sample Questions
Q1) Suppose the government institutes new regulations on physicians requiring physicians to take additional years of training before practicing medicine.What will happen to the wages and quantity of physicians?
A)Wages decrease;number of physicians increases
B)Wages increase;number of physicians increases
C)Wages decrease;number of physicians decreases
D)Wages increase;number of physicians decreases
Answer: D
Q2) In the graph above,the equilibrium price is regulated to equal P*.This price is a
A)Price ceiling and the market will have a shortage.
B)Price floor and the market will have a shortage.
C)Price ceiling and the market will have a surplus.
D)Price floor and the market will have a surplus.
Answer: B
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3
Chapter 2: The Role of Government in Health and Medical Care
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20 Verified Questions
20 Flashcards
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Sample Questions
Q1) The arguments against price competition in the medical care market is
A)Lack of responsiveness to patient demand
B)Lack of medical innovation
C)Lack of sufficient consumer protection
D)Lack of efficiency
Answer: C
Q2) Given both the marginal external benefit and the marginal external cost,what is the net effect on society of producing at the private optimum?
Answer: The private outcome is Q = 200.The social outcome is Q = 225.Society is under-producing the optimal number of inpatient days once we take into account all the social cost and benefits.
Q3) Which of the following is not an example of a demand subsidy?
A)Medicare
B)Medicaid
C)SCHIP
D)Veterans Administration medical system
Answer: D
Q4) Graph the Marginal Private Cost (MPC)and the Marginal Private Benefit.
Answer: 11ea48be_8914_81ef_b057_a5da371a5ee7_TB2105_00
Page 4
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Chapter 3: Health Policy and the Legislative Marketplace
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Sample Questions
Q1) Explain why the AMA supports a requirement of employer sponsored health insurance,but not a public health insurance option?
Answer: A large public health insurance company can impose monopsony power and force medical providers to accept lower prices for services than those that can be negotiated with smaller private firms.
Q2) The ADA would support and should be an expansion in _______ dental insurance
A)Public
B)Private
C)Both a and b
D)Neither a nor b
Answer: B
Q3) If politicians used a public interest theory of government regulation,then which associations' agenda would be most supported?
A)AMA
B)ANA
C)AHA
D)None of the above
E)All of the above
Answer: D
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Page 5
Chapter 4: The Production of Health: the Impact of Medical
Services on Health
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Sample Questions
Q1) In the Thorton study of mortality and Medical expenditures,which of the following had the smallest effect on mortality?
A)Smoking
B)Education
C)Crime in the city
D)Medical expenditures
Q2) The cost-effectiveness of the H1N1 influenza vaccination was presented in a study in the October 5,2009,issue of the Annals of Medicine.In this study,authors use outside sources to estimate the probable benefits and cost of the influenza vaccine and find the following:
-The cost of vaccination (including lost work time)is $35.
-The cost of influenza illness (including lost work time)is $313.
-Influenza vaccination reduces the probability of getting influenza from 0.67 to 0.25.
Perform a cost-benefit analysis of influenza vaccination.Does it favor vaccination?
Q3) Between 1968 and 1976,medical intervention accounted for
A)More than 60% of the decline in ischemic heart disease mortality
B)Between 40 and 60% of the decline in ischemic heart disease mortality
C)Less than 40% of the decline in ischemic heart disease mortality
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Chapter 5: An Overview of the Medical Care Sector
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Sample Questions
Q1) Consider an increase in the demand for dentures.As the supply curve becomes _____ elastic,the change in quantity supplied becomes_______.
A)More;smaller
B)More;larger
C)Less;larger
D)None of the above
Q2) If nurses and physicians are complements in the hospital production function,then an increase in the tuition to nursing school will
A)Increase the quantity demanded for both nurses and physicians.
B)Decrease the quantity demanded for both nurses and physicians.
C)Increases the quantity demanded for nurses,but decreases the demand for physicians.
D)Decreases the quantity demanded for nurses,but increases the demand for physicians.
Q3) Which type of market is not present in the medical care sector?
A)Institutional
B)Management
C)Manpower
D)Educational
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Page 7
Chapter 6: The Demand for Medical Care
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Sample Questions
Q1) Empirical studies of demand for health care have often failed to account for
A)The cost of time
B)The availability of substitutes or complements
C)Utilization of medical services
D)All of the above
Q2) Which of the following business strategies are used by health insurance companies to curb physician-induced demand?
A)Requiring prior authorization before administering a treatment/procedure
B)Providing physicians with financial incentives to reduce overall cost
C)Requiring patients to seek a second opinion for high-cost treatments/procedures
D)All of the above
E)None of the above
Q3) For individuals in the United States.
A)The income elasticity of demand for medical services is less than 1.0 in absolute value
B)The price elasticity of demand for hospital and physician visits is greater than 0.5 in absolute value
C)Both a and b
D)Neither a nor b
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Chapter 7: The Demand for Health Insurance
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Sample Questions
Q1) Purchasing additional medical services because you are covered by health insurance is an illustration of
A)The adverse selection problem
B)The moral hazard problem
C)A failure of the market for externalities
D)The existence of spillover benefits
Q2) Suppose there are two types of people in an insurance market: high and low risks.The high-risk person is sick 10% of the time and the low-risk person is sick 5% of the time.The probability of any individual being high risk is 40%.Upon getting sick,an individual loses $10,000 in medical expenses.What if the individuals do not know their type?
Q3) Suppose there are two types of people in an insurance market: high and low risks.The high-risk person is sick 10% of the time and the low-risk person is sick 5% of the time.The probability that any individual is high risk is 40%.Upon getting sick,an individual loses $10,000 in medical expenses.What are the actuarially fair premiums for the types?
Q4) Suppose the inverse demand for physician office visits is P = 1000 - 20Q.Now suppose an insurance policy provides a co-insurance rate of 50%.Graph the new demand function with health insurance.
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Page 9
Chapter 8: The Supply of Medical Care: an Overview
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Sample Questions
Q1) If the demand for hospital visits in a city are 10,000 and a typical physician office can accommodate 50 patients per day,the number of physician offices is
A)2000
B)200
C)20
D)Cannot be determined
Q2) The cost of a national health insurance program would be____ and the availability of services _______ when supply is more ________.
A)Greater;diminished;inelastic
B)Less;diminished;inelastic
C)Greater;diminished;elastic
D)Less;enhanced;inelastic
Q3) Economies of scale
A)Might be more easily realized in an emergency room rather than a physician's office.
B)Depend on the spreading of minimal fixed costs over a number of procedures.
C)Depend on the spreading of high variable costs over a number of procedures.
D)Depend on the spreading of high marginal costs over a number of procedures.
E)Depend on the spreading of high fixed costs over a number of procedures.
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10
Chapter 9: Market Competition in Medical Care
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Sample Questions
Q1) Tax exemption of health insurance leads to _________ market distortion._________ health insurance choices leads to _________ market distortion.
A)More;More;more
B)More;More;less
C)Less;Less;less
D)More;More;more.
E)None of the above
Q2) Which of the following policies was not a cost-containment policy?
A)Increasing the Medicare payroll tax
B)Using price controls
C)Mandating the use of Certificate of Need (CON)on hospital capital
D)Decreasing physician reimbursement
E)All of the above
Q3) What does the Rand HMO experiment tell us about the effect of HMOs on hospitalized utilization?
Q4) Insurance plans that seek to reduce the moral hazard problem include
A)HMOs
B)Low co-insurance rate plan
C)Both a and b
D)Neither a nor b
11
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Chapter 10: The Market for Health Insurance: Its
Performance and Structure
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Sample Questions
Q1) Assume the health insurance market is perfectly competitive.If the benefit/premium ratio is 0.90 and the premium is $1,000,how much are administrative cost?
Q2) A movement of the medical loss ratio from .6 to .8 indicates an
A)Increase in administrative cost per enrollee
B)Decrease in administrative cost per enrollee
C)No difference in administrative cost per enrollee
Q3) If the health insurance premium is equal to $2,000 and administrative fees are $500,then what is the benefit/premium ratio?
A).25
B).50
C).75
D)Cannot be calculated with the above information
Q4) The Health Insurance Portability and Accountability Act allows all the following except
A)Portability
B)Limitations on preexisting exclusions
C)Guaranteed renewal
D)Reduced the tax deductibility of health insurance premiums
Q5) Do high concentration ratios have an effect on input prices?
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Chapter 11: The Physician Services Market
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Sample Questions
Q1) Physicians' pay in the United States is high due to
A)High training costs
B)High return on training
C)Both a and b
D)Neither a nor b
Q2) 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?
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
Q3) How did physicians accepting Medicare assignments cause price discrimination?
Q4) What are the reasons why both the size of medical groups and their numbers have Explain.
Q5) Define defensive medicine and describe what Baicker,Fisher,and Chandra found as the cost of defensive medicine.
Q6) Explain the effects of advertising on physician services.
Page 13
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Chapter 12: The Market for Hospital Services
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Sample Questions
Q1) Which of the following is a strategy used by a firm in monopolistic competition?
A)Advertising
B)Lobbying
C)Improving hospital amenities
D)All of the above
Q2) Robinson and Luft found that non-price competition among hospitals led to
A)Shorter hospital stays
B)More hospital services
C)More cost-containment
D)Less excess capacity
Q3) The predominate organizational form for U.S.hospitals is not-for-profit.Why?
A)The profit motive corrupts human behavior
B)For-profit hospitals do not provide charity care
C)Private not-for-profit hospitals engage in most of the medical research
D)The not-for-profit form provides the most benefits to physicians
E)All of the above
Q4) Explain how Certificates of Need (CON)may be anticompetitive.
Q5) What are the advantages of using the Herfindahl-Hirschman Index versus a concentration ratio?
Q6) Explain why a hospital can be considered a multiproduct firm.
Page 14
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Chapter 13: The Pharmaceutical Industry
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Sample Questions
Q1) Which of the following are types of prescription drug advertising?
A)Direct-to-Consumer Advertising (DTCA)
B)Detailing
C)Free samples
D)All of the above
Q2) Which policy simplified and streamlined the process for FDA approval of generic drugs in exchange for granting patent extensions to innovative drugs?
A)Hatch-Waxman Act
B)1962 Drug Amendment
C)Medicare Modernization Act
D)None of the above
Q3) Pharmaceutical firms charge different prices in different countries after because
A)Government regulations are different between countries
B)Demand elasticities are different between countries
C)Both a and b
D)Neither a nor b
Q4) Describe methods used by brand-name pharmaceutical companies to delay the entry of generic drugs.
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Page 15
Chapter 14: Health Manpower Shortages and Surpluses:
Definitions, measurement, and Policies
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18 Verified Questions
18 Flashcards
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Sample Questions
Q1) Suppose the federal government would like to protect health professional jobs by only allowing U.S.citizens to hold positions in hospitals,regardless of where they trained.Is this a good policy? Why or why not?
Q2) Bullet County has 100,000 residents.During any given year,2% of the population will develop a medical condition that requires 10 hours of physician treatment.Assuming the average physician works 2,000 hours per year,how many physicians are needed in Bullet County?
A)6
B)10
C)14
D)20
Q3) Suppose Medicare no longer subsidizes residency programs.Instead,the residents must pay for the education.Who will pay more,general practitioners or specialists?
Q4) Regulators and advocates argue that licensure is appropriate because it:
A)Ensures that patients get high-quality care
B)Increases remuneration to those with the licenses
C)Reduces the incidence of deficient care
D)Both a and c
Page 16
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Chapter 15: The Market for Physician Manpower
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Sample Questions
Q1) Physicians are believed to charge different patients different prices for the same service because they practice
A)Price discrimination
B)Charity
C)Both a and b
D)Neither a nor b
Q2) If a physician cannot charge every patient a different price but can group patients by type and charge each group a different price,this is called
A)First-degree price discrimination
B)Second-degree price discrimination
C)Third-degree price discrimination
D)Fourth-degree price discrimination
Q3) Which action led to a decrease in African-American physicians?
A)Flexner Report
B)Removal of antitrust protection
C)Gies Report
D)P4P
Q4) Describe how barriers to entry would decrease the quality of care.
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Chapter 16: The Market for Medical Education: Equity and Efficiency
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Sample Questions
Q1) Tuition and fees cover
A)100% of medical school cost
B)75% to 50% of medical school cost
C)50% to 25% of medical school cost
D)Less than 25% of medical school cost
Q2) Currently,tuition paid by medical students constitutes
A)Less than 5% of total revenue
B)Less than 10% of total revenue
C)Less than 15% of total revenue
D)Less than 20% of total revenue
Q3) If medical schools are not using tuition to ration students,what mechanism is being used to ration students and to what end?
Q4) Currently,there is an
A)Excess supply of medical schools as indicated by the low price
B)Excess demand for medical education as indicated by the excess number of applications to medical school
C)Both a and b
D)Neither a nor b
Page 18
Q5) How do we determine economic efficiency in the supply of medical schools?
Q6) What would be an economic justification for subsidizing a medical education?
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Page 19
Chapter 17: The Market for Registered Nurses
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Sample Questions
Q1) Explain why the ANA would support educational subsidies to attend nursing school.
Q2) As a result of the NTA,
A)Nursing enrollments and wages increased immediately
B)Nursing enrollments and wages did not increase until the late 1980s
C)Nursing enrollments increased immediately,but wages lagged
D)Nurses' wages increased immediately,but enrollment lagged
Q3) What are the benefits and cost of a comparable worth-based wage determination system.
Q4) The vacancy rate of nurses within hospitals was highest during A)1958
B)1962
C)1967
D)1968
Q5) Immigrants constitute ______ of the growth in nurses between 2001 to 2008.
A)1/10
B)1/5
C)1/3
D)1/2
Q6) Explain why prior to 1966,the nursing market was experiencing a static shortage.
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Chapter 18: National Health Insurance: an Approach to the
Redistribution of Medical Care
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Sample Questions
Q1) Medicaid is a means-tested ___________ program that is administered through the _________ government
A)Federal;federal
B)State;state
C)Federal;state
D)State;federal
Q2) Infant mortality is higher in Canada than in the United States
A)True
B)False
Q3) Deductible and co-payments can be used to reduce
A)Adverse selection
B)Moral hazard
C)Malpractice
D)All of the above
Q4) Health Savings Accounts were established by
A)HIPAA
B)CHIP
C)Medicare Prescription Drug Act of 2003
D)PPACA
Q5) What are the problems with an employer health insurance mandate?
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