Health Services Administration
Final Test Solutions
Course Introduction
Health Services Administration is a comprehensive course that explores the organization, management, and delivery of healthcare services within various settings, including hospitals, clinics, and community-based organizations. The course covers foundational concepts such as healthcare policies, leadership strategies, financial management, human resources, quality improvement, and legal and ethical principles in health care. Students will examine contemporary challenges faced by administrators, including health systems reform, regulatory compliance, and the integration of technology in health care. Through case studies and practical applications, students will develop the skills necessary to lead and manage health services effectively in a dynamic and evolving healthcare environment.
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
20 Flashcards
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Sample Questions
Q1) Suppose you are considering becoming a physician.Your current job has an annual salary of $100,000,but you hate your job.If offered a job as a physician for $90,000 you would be indifferent between your current job and this new job.What is your opportunity cost of staying at your job?
A)-$10,000
B)$10,000
C)$100,000
D)$90,000
Answer: C
Q2) In the graph above,the opportunity cost in defense dollars associated with moving toward more medical expenditures is
A)Increasing
B)Decreasing
C)Constant
D)Increasing then decreasing
E)Decreasing the increasing
Answer: A
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Chapter 2: The Role of Government in Health and Medical Care
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Sample Questions
Q1) Which of the following is an example of an externality in the cigarette market?
A)firsthand smoke
B)secondhand smoke
C)Increase in the price of tobacco
D)Increase in the price of a competitors' cigarettes
Answer: B
Q2) Which of the following are reasons for the government to intervene in the medical market?
A)Provide consumer protection
B)Internalize externalities
C)Correct market failure (i.e.,barriers to entry)
D)All of the above
Answer: D
Q3) Graph the Marginal Private Cost (MPC)and the Marginal Private Benefit.
Answer: 11ea48be_8914_81ef_b057_a5da371a5ee7_TB2105_00
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Chapter 3: Health Policy and the Legislative Marketplace
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Sample Questions
Q1) Which of the following is an example of a regressive tax?
A)Sales tax
B)Federal income tax
C)Federal estate tax
D)Federal gift tax
Answer: A
Q2) Dental hygienists are considered compliments to dentist.Therefore,dentists would support legislation
A)Allowing dental hygienists to independently open dental offices.
B)Limiting the expansion of dental hygienists.
C)Requiring additional education to become a dental hygienist.
D)None of the above
Answer: D
Q3) 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
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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) According to Victor Fuchs' research on infant mortality,the reduction of infant mortality between 1900 and 1930 following events,except
A)Chlorination of water
B)Increased literacy
C)Decreased birthrate
D)Pasteurization of milk
E)Medical care
Q2) A hospital is considering hiring either a physician anesthetist or a nurse anesthetist.The cost of a physician anesthetist is $200,000,but their marginal product is 50 procedures per day.The cost of a nurse anesthetist is $100,000,but their marginal product is 30 procedures per day.Who do you hire and why?
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
Q4) Compare cost-utility analysis to cost-effective analysis.
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Page 6
Chapter 5: An Overview of the Medical Care Sector
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Sample Questions
Q1) A decrease in the demand for physical therapy will lead to
A)A decrease in the wages of physical therapists
B)A decrease in the number of physical therapist students
C)A decrease in the price for physical therapy
D)All of the above
E)None of the above
Q2) If the supply function in the medical sector is relatively inelastic,then a rightward shift in demand will cause
A)Price to increase faster than quantity increases
B)Price to decrease faster than quantity increases
C)Price to increase slower than quantity increases
D)Price to decrease slower than quantity increases
Q3) If wages for licensed practical nurses (LPNs)increase
A)The demand for LPNs increases
B)The demand for registered nurses increases
C)Both a and b
D)Neither a nor b
Q4) What are the prices and quantities in each of the three markets of the medical sector?
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Chapter 6: The Demand for Medical Care
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Sample Questions
Q1) Education is believed to
A)Increase the demand for health because higher educated people also have higher wages
B)Decrease the demand for health because higher educated people experience a greater return to their health investments.
C)Have no effect on the demand for health
Q2) Which of the following items will not increase demand for medical services today?
A)Age
B)Income
C)Education
D)Wealth
Q3) After the introduction of Medicare and Medicaid,the increase in medical expenditures can be explained by a
A)Less than 25% increase in prices
B)25% to 50% increase in prices
C)50% to 75% increase in prices
D)Greater than 75% increase in prices
Q4) Discuss the role of "time cost" on the demand for medical services.
Q5) Discuss the role of physicians on patients' demand for medical services.
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Chapter 7: The Demand for Health Insurance
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Sample Questions
Q1) 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?
Q2) 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.
Q3) Lucy Ramirez has $22,500 in income.After a recent trip to Cuba,she discovers that there is a 25% chance of acquiring Cubanitis.The disease is 100% curable but requires the Fidelonomy procedure (at a cost of $12,500).The Kuba-Kuba Insurance Company offers a policy that will cover the Fidelonomy.The premium they charge is $4,000.Of this premium,the pure premium is __________ and the loading fee is _______.
A)$4,000;$0
B)$3,125;$875
C)$875;$3125
D)Not enough information to answer.
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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) If the marginal product of the last nurse is equal to 1/N. and the wage/price ratio is equal to 1/2,then the optimal number of nurses is
A)2
B)4
C)8
D)16
Q3) 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
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10
Chapter 9: Market Competition in Medical Care
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Sample Questions
Q1) What does the Rand HMO experiment tell us about the effect of HMOs on hospitalized utilization?
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) ________ enrollees are the _______ price-sensitive,and they continue to purchase plans with the ______ premiums
A)FFS;most;highest
B)FFS;least;highest
C)HMO;most;highest
D)HMO;least;lowest
Q4) Explain how the new payment system for hospitals instituted by the National Health Services of Britain affected hospital stay length,expenditures,and mortality.
Q5) Describe the advantages and disadvantages of capitation payments.
Q6) Compare the quality difference in care between HMOs and traditional health insurance.
Page 11
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Chapter 10: The Market for Health Insurance: Its
Performance and Structure
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Sample Questions
Q1) Are high concentration ratios indicative of market power in the health insurance industry?
Q2) Assume a high-risk;person has a 0.50 probability of a $500 medical expense and a low-risk person has a 0.10 probability of a $500 medical expense.Both types of people are risk averse.What is the community rating premium for a neighborhood containing exactly half of each type of person?
A)$300
B)$250
C)$150
D)$50
Q3) A strong individual mandate with large fines is __________ by insurers because it will _______ adverse selection.
A)Supported;reduce
B)Supported;increase
C)Not supported;reduce
D)Not supported;increase
Q4) Do high concentration ratios have an effect on input prices?
Q5) Explain why the use of community-rated premiums leads to economic inefficiencies.
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Chapter 11: The Physician Services Market
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Sample Questions
Q1) Define defensive medicine and describe what Baicker,Fisher,and Chandra found as the cost of defensive medicine.
Q2) The frequency of malpractice claims against physicians
A)Is higher for general practitioners than any other specialty
B)Has increased dramatically since the mid-1980s for all specialties
C)Differs little among specialties
D)Is greater for those specialties that practice high-risk invasive procedures
E)Will continue to soar unless tort laws are reformed
Q3) A physician acts as a perfect agent when
A)She does not injure a patient when providing a treatment
B)She requires patients to make medical choices for themselves
C)She makes the same medical care decisions for a patient as a fully informed patient
D)She makes the same medical care decisions for a patient as she would make for herself.
E)She provides free medical care to poor and uninsured patients
Q4) Explain the effects of advertising on physician services.
Q5) What is supplier-induced demand and explain its affects on medical prices and services?
Q6) How did physicians accepting Medicare assignments cause price discrimination?
Page 13
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Chapter 12: The Market for Hospital Services
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Sample Questions
Q1) What are the determinants of a geographic market?
Q2) Explain how Certificates of Need (CON)may be anticompetitive.
Q3) The quality of hospitals used by HMOs is on average
A)Greater than non-HMO hospitals
B)Equal to non-HMO hospitals
C)Less than non-HMO hospitals
Q4) Over the past 20 years,the ability of hospitals to cost-shift has A)Increased
B)Decreased
C)Remained unchanged
Q5) What are the advantages of using the Herfindahl-Hirschman Index versus a concentration ratio?
Q6) Calculate the Herfindahl-Hirschman Index (HHI)for five hospitals in a market with the following market shares: 50%,25%,10%,10%,and 5%.Is this market more or less concentrated than a market with equal market shares and the same number of firms?
Q7) Explain why a hospital can be considered a multiproduct firm.
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Page 14
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) Drugs that treat a small portion of the population are called
A)Small drugs
B)"Me-too" drugs
C)Unique drugs
D)Orphan drugs
Q3) If the demand for Lipitor is P = 1000 - 10Q (MR = 1000 -20Q)in the United States and P = 500 -20Q (MR = 500 - 40Q)in Canada,at what price would Lipitor sell at in each country? Assume marginal cost is equal to $100.
Q4) 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
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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 Medicare no longer subsidizes residency programs.Instead,the residents must pay for the education.Who will pay more,general practitioners or specialists?
Q2) What are the potential pitfalls of using the ratio technique to determine shortages/surpluses?
Q3) Policy intervention is needed to resolve a
A)Dynamic shortage
B)Static shortage
C)Both a and b
D)Neither a nor b
Q4) Which of the following is true?
A)Dynamic shortages are resolved over time
B)Static shortages are resolved overtime
C)Both a and b
D)Neither a nor b
Q5) The number of physicians per 100,000 has risen between 1980 to 2007 by
A)More than 50%
B)Between 50% and 25%
C)Less than 25%
16
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) Which action gave physicians a financial incentive to provide medical services and tests believed to result in better outcomes?
A)Flexner Report
B)Removal of antitrust protection
C)Gies Report
D)P4P
Q3) Which of the following is needed for price discrimination to work?
A)The firm must be able to identify the person's willingness to pay
B)The high-price consumer cannot purchase the service at the low price
C)Both a and b
D)Neither a nor b
Q4) What are the advantages of using reexamination instead of additional hours of continual education to recertify physicians?
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Chapter 16: The Market for Medical Education: Equity and Efficiency
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Sample Questions
Q1) What are some of the concerns associated with medical school tuition that reflect the true cost of a medical education?
Q2) Let the private demand for medical research be P = 90-Q and let the supply for medical research equal P = Q.
a.Find the equilibrium price and quantity.
b.Suppose each unit of medical research has a positive externality such that the marginal social benefit is P = 90 - .5Q.What is the socially optimal level of research?
Q3) How do we determine economic efficiency in the supply of medical schools?
Q4) An increase in the number of years needed to finish medical school
A)Shifts the demand for medical school to the left and decreases the number of physicians
B)Shifts the demand for medical school to the right and decreases the number of physicians
C)Leads to a decrease in quantity demanded
D)Leads to an increase in quantity demanded
Q5) What would be an economic justification for subsidizing a medical education?
Q6) If medical schools are not using tuition to ration students,what mechanism is being used to ration students and to what end?
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Chapter 17: The Market for Registered Nurses
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Sample Questions
Q1) An increase in the mandated nurse-hospital ratio will lead to
A)Better patient outcomes
B)Higher nurses' wages
C)Both a and b
D)Neither a nor b
Q2) Dynamic shortages and static shortages occur in
A)The short-run
B)The long-run
C)Both a and b
D)Neither a nor b
Q3) Hospital diploma programs
A)Were used to ensure a supply of nurses
B)Have increased due to higher nurse mobility
C)Both a and b
D)Neither a nor b
Q4) Two broad purposes of the NTA were to
A)Increase nurses' pay and the nursing quality
B)Increase the number of nurses and the nursing quality
C)Increase the number of nurses and nurses' pay
Q5) Explain why prior to 1966,the nursing market was experiencing a static shortage.
19
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Chapter 18: National Health Insurance: an Approach to the
Redistribution of Medical Care
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Sample Questions
Q1) Deductible and co-payments can be used to reduce
A)Adverse selection
B)Moral hazard
C)Malpractice
D)All of the above
Q2) Explain how a comparative effectiveness board could reduce health care cost.
Q3) According to Long and Stockley,what are the benefits and cost of the Massachusetts Health Plan?
Q4) Medicaid is a means-tested ___________ program that is administered through the _________ government
A)Federal;federal
B)State;state
C)Federal;state
D)State;federal
Q5) Infant mortality is higher in Canada than in the United States
A)True
B)False
Q6) Life expectancy is higher in Canada than in the United States.
A)True
B)False Page 20
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Page 21