Health Services Administration Test
Bank
Course Introduction
Health Services Administration explores the organization, management, and delivery of healthcare services in a variety of settings, including hospitals, clinics, and public health systems. The course provides an overview of key principles related to planning, leadership, finance, policy, human resources, and quality improvement in health care organizations. Students examine the roles and responsibilities of health administrators, learn about regulatory and ethical issues, and analyze strategies for enhancing efficiency and patient care in a rapidly 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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Chapter 1: An Introduction to the Economics of Medical Care
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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) 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
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3
Chapter 2: The Role of Government in Health and Medical Care
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Sample Questions
Q1) 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.
Q2) 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
Q3) Which of the following statements is true about the medical care market?
A)Both patients and providers have perfect knowledge of prices in the market.
B)Both patients and providers have an incentive to minimize costs.
C)Medical resources are very mobile.
D)None of the above
Answer: D
Q4) 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) The AMA would support an
A)Expansion in the number of nurses
B)Expansion in the types of procedures a nurse can perform
C)Both a and b
D)Neither a nor b
Answer: A
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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Chapter 4: The Production of Health: the Impact of Medical
Services on Health
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Sample Questions
Q1) Suppose a hospital is currently producing 100 inpatient days per day with 20 physicians and 50 nurses.The hospital receives a grant to provide low-cost care.The grant includes funds to double the size of the nursing staff.After the grant,the hospital produces 150 inpatient days per day.What is the marginal product of nurses?
A)0 inpatient days
B)1 inpatient days
C)2 inpatient days
D)3 inpatient days
Q2) 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
Q3) 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?
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Chapter 5: An Overview of the Medical Care Sector
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Q1) Which one is in the correct order?
A)The demand for treatment demand for institutions demand for manpower
B)The demand for manpower demand for treatment demand for institutions
C)Demand for institutions demand for manpower demand for treatment
D)The demand for treatment demand for manpower demand for institutions
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 nurses and physicians are substitutes 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)Increase the quantity demanded for nurses,but decrease the demand for physicians.
D)Decrease the quantity demanded for nurses,but increase the demand for physicians.
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Chapter 6: The Demand for Medical Care
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Sample Questions
Q1) Discuss the role of physicians on patients' demand for medical services.
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) Which of the following items will not increase demand for medical services today?
A)Age
B)Income
C)Education
D)Wealth
Q4) Assume that the patient's out-of-pocket price for visiting a physician is $30 and that the time costs are equal to $50.Assume the elasticity of the medical service,with respect to the total price,was -2.0.If the out-of-pocket price dropped 50 percent,by what percent does the number of visits change?
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Chapter 7: The Demand for Health Insurance
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Sample Questions
Q1) 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.
Q2) Insurance coverage is sold at
A)The actuarially fair price
B)The pure premium
C)The loading fee
D)The actuarially fair price + the loading fee
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) One of the benefits of a national health insurance program is that it guarantees a large insurance pool.Why is this a benefit? What economic principle is being addressed here?
Q2) Suppose there are two hospitals in the market.The inverse demand for Hospital 1 is P = 100 - 2Q and the inverse demand for Hospital 2 is P = 100 - Q.What is the inverse market demand?
A)P = 100 - 3Q
B)P = 200 - 3Q
C)P = 100 - 2 / 3Q
D)P = 200 - 1 / 3Q
Q3) Which market structure is characterized by a large number of differentiated firms?
A)Monopolistic competition
B)Monopoly
C)Oligopoly
D)Perfect competition
Q4) If a hospital displays decreasing average costs on output,should the hospital be regulated even though it is more efficient?
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Chapter 9: Market Competition in Medical Care
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Sample Questions
Q1) ________ 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
Q2) Describe the advantages and disadvantages of capitation payments.
Q3) Health insurance providers in order of increasing management are
A)FFS,PPO,HMO
B)PPO,FFS,HMO
C)FFS,HMO,PPO
D)PPO,HMO,FFS
Q4) The failure of capitation payments is due to
A)Providers' inability to access risk
B)Providers' inability;risk-adjustment claims to insurers
C)Conflict with respect to the method;specialists of payment between primary care physicians and specialist.
D)All of the above
E)None of the above
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Chapter 10: The Market for Health Insurance: Its
Performance and Structure
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Sample Questions
Q1) Do high concentration ratios have an effect on input prices?
Q2) A risk-averse consumer faces a 0.60 probability of health expenditures equal to $10,000 and zero expenditures otherwise.She can purchase a health insurance policy that will cover all her actual health costs for $6,000.It follows that
A)She will definitely not buy the health insurance policy
B)She will possibly buy the health insurance policy
C)She will definitely buy the health insurance policy
Q3) 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
Q4) Which of the following gave Blue Cross cost advantages compared to commercial health insurers?
A)Tax exemption
B)Economies of scale
C)Both a and b
D)Neither a nor b
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Chapter 11: The Physician Services Market
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Sample Questions
Q1) Physician-induced demand
A)Increases medical prices
B)Increases use of medical services
C)Both a and b
D)Neither a nor b
Q2) What is supplier-induced demand and explain its affects on medical prices and services?
Q3) Which of these would be likely to reduce the extent of supplier-induced demand?
A)Physicians being remunerated on a "capitation" basis rather than a "fee for service" basis
B)An increase in the number of physicians coming out of medical schools
C)A reduction in the medical and health knowledge of the general population
D)Less advertising and other competitive behaviors by physicians
Q4) 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
Q5) 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) 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
Q2) You are a consultant and have been employed by a large inner-city hospital called City Hospital to estimate the demand for its services.Your research indicates that the income elasticity of demand for the target market is +0.50;the price elasticity of demand is -0.15;and the cross-price elasticity of demand with respect to the price of services at Rural Hospital,a near-by hospital,is +0.35.Answer the following questions. If a hospital is experiencing economies of scale,
A)Its average cost curve is positively sloped as output increases
B)Its average cost curve is negatively sloped as output increases
C)It should reduce its output level to lower costs
D)Quality is falling as output is rising
E)Both b and c are true
Q3) What are the determinants of a geographic market?
Q4) Explain how Certificates of Need (CON)may be anticompetitive.
Q5) Explain why a hospital can be considered a multiproduct firm.
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Chapter 13: The Pharmaceutical Industry
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Sample Questions
Q1) Which drug type is expected to have a higher markup over cost?
A)Innovation drugs
B)"Me-too" drugs
C)Both have about the same markup
Q2) Suppose you are the manager of drug development at a new pharmaceutical company and you are trying to decide how to price your newly released drug.The drug has a marginal cost of $20 and the demand elasticity for the drug is -2.What is the optimal price?
Q3) Drugs that treat a small portion of the population are called
A)Small drugs
B)"Me-too" drugs
C)Unique drugs
D)Orphan drugs
Q4) For pharmaceutical drugs,R&D expenditures account for
A)Over two-thirds of expenses
B)Between one-third and two-thirds of total expenses
C)Less than one-third of expenses
Q5) 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.
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Chapter
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Sample Questions
Q1) 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
Q2) Policy intervention is needed to resolve a
A)Dynamic shortage
B)Static shortage
C)Both a and b
D)Neither a nor b
Q3) Assume the government imposes price controls on physician wages where the wage cannot exceed $120.Let the demand for labor be w = 500 - Q and the supply of labor is w = 3Q.
A)Wage is $375 and quantity is 125
B)Wage is $375 and quantity is 40
C)Wage is $120 and quantity is 380
D)Wage is $120 and quantity is 40
Q4) Explain how the current market for residencies is anticompetitive and how market competition would correct the current situation.
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Chapter 15: The Market for Physician Manpower
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Sample Questions
Q1) Explain how barriers to entry can cause static shortages of health professionals.
Q2) Which of the following is not a barrier to entry into the physician profession?
A)High membership fees into medical societies
B)Medical school accreditation
C)Longer residency programs
D)State Licensing
Q3) Explain why barriers to entry,such as additional education and licensing,are preferred to malpractice lawsuits to prevent negligent or low-quality physicians from doing harm.
Q4) Describe how physicians can use price-discrimination to serve both high- and low-income patients.
Q5) Fee-splitting occurs when
A)A specialist splits their charge with the hospital that gives them privileges
B)A specialist splits their charge with the referring physician
C)A physician splits their charge with an assisting nurse
D)A physician splits their charge with the patient's insurance company
Q6) What are the advantages of using reexamination instead of additional hours of continual education to recertify physicians?
Q7) Describe how barriers to entry would decrease the quality of care.
Page 17
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Chapter 16: The Market for Medical Education: Equity and Efficiency
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Q1) Income Contingent Loan Repayment Plans (ICLRP)have been proposed to encourage medical school graduates to
A)Locate to a rural area
B)Work with underserved populations
C)Locate to an urban area
D)None of the above
Q2) The use of fluorine in public tap water to reduce cavities is an example of a
A)Negative externality
B)Positive externality
C)Public good
D)Private good
Q3) What would be an economic justification for subsidizing a medical education?
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) How do we determine economic efficiency in the supply of medical schools?
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Chapter 17: The Market for Registered Nurses
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Q1) What are the benefits and cost of a comparable worth-based wage determination system.
Q2) Explain why the ANA would support educational subsidies to attend nursing school.
Q3) Which of the following items has the smallest effect on the wage differential between men and women?
A)Years of experience
B)Years of tenure
C)Sex discrimination
D)Each of the above have the same effect on the wage differential
Q4) 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
Q5) 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
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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Q1) Equal treatment for equal needs can be achieved by
A)Income dependent subsidies
B)Equal subsidies regardless of income
C)Free health care
D)None of the above
Q2) Medicare expenditures can be reduced by
A)Reducing payments to the suppliers of Medicare services
B)Increasing the Medicare payroll tax
C)Making Medicare a defined contribution program
D)All of the above
Q3) Explain how a comparative effectiveness board could reduce health care cost.
Q4) The Children's Health Insurance Plan of 1997 provides insurance for A)Infants
B)Pregnant women
C)Low-income children
D)All of the above
Q5) Life expectancy is higher in Canada than in the United States.
A)True
B)False
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Q6) What are the problems with an employer health insurance mandate?
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