MHA 707 Exam C Questions and Answers With Verified Solutions 2025
Moral Hazard - ✔✔When the act of insuring an event increases the likelihood that the event will happen
behaving different when you know someone is taking the risk (induced demand)
Adverse Selection - ✔✔the situation in which one party to a transaction takes advantage of knowing
more than the other party to the transaction
the sicker people likely want more insurance, compared to those who are healthy
Pooling of Risk - ✔✔Allows individuals to share risk, i.e., insurance companies
National Health Expenditure Accounts (NHEA) - ✔✔Provides official estimates of health care spending in
the US. It measures health care consumption and health care investment.
NHEA Benefits - ✔✔Comprehensive: includes all major components of health care system in unified,
mutually exclusive, and exhaustive structure
Multidimensional: encompasses expenditures as well as payers
Consistent: applies a common set of definitions that permits longitudinal comparisons
Published by DHHS
Accounts in the NHEA - ✔✔National Health Expenditures: NHE
Health Consumption Expenditures: HCE
Personal Health Care: PHC
National Health Expenditures: NHE - ✔✔all health care consumption and investments in medical
structures and equipment and noncommercial health services and biomedical research
, NHE - HCE = Amount of investment in the medical sector of economy (buildings, research, equipment)
Health Consumption Expenditures: HCE - ✔✔a subset of NHE, includes personal health care spending,
government administration and net cost of private health insurance and public health activities
Personal Health Care: PHC - ✔✔subset of HCE, including all medical goods and service that's used to
diagnose, treat, and prevent health problems of a specific person
How much NHE spent on Health Care? - ✔✔$3.49 Trillion
Per capita amount: over $10k
% of GDP: 18%
Buying Power: $1,200 when adjusted by CPI
Largest contributors to the Personal Health Care (PHC) - ✔✔hospitalization, physician services, Rx, other
health care goods and services
What accounted for the largest share of NHE? - ✔✔Hospital Care: 33% of spending
Professional Services: 20% doctors NHE
Retail Rx: 10.5%
Three Categories of PHC increased as a share of NHE - ✔✔Health Residential and Personal Care: 5.2% of
NHE
Net Cost of Private Health Ins: 6.6% of NHE
Home Health Care: 2.8% of NHE
Chronic Disease and Mental Health Diseases in NHE (percentage) - ✔✔90%
Among the top 5% of users account for about half of the spending
Moral Hazard - ✔✔When the act of insuring an event increases the likelihood that the event will happen
behaving different when you know someone is taking the risk (induced demand)
Adverse Selection - ✔✔the situation in which one party to a transaction takes advantage of knowing
more than the other party to the transaction
the sicker people likely want more insurance, compared to those who are healthy
Pooling of Risk - ✔✔Allows individuals to share risk, i.e., insurance companies
National Health Expenditure Accounts (NHEA) - ✔✔Provides official estimates of health care spending in
the US. It measures health care consumption and health care investment.
NHEA Benefits - ✔✔Comprehensive: includes all major components of health care system in unified,
mutually exclusive, and exhaustive structure
Multidimensional: encompasses expenditures as well as payers
Consistent: applies a common set of definitions that permits longitudinal comparisons
Published by DHHS
Accounts in the NHEA - ✔✔National Health Expenditures: NHE
Health Consumption Expenditures: HCE
Personal Health Care: PHC
National Health Expenditures: NHE - ✔✔all health care consumption and investments in medical
structures and equipment and noncommercial health services and biomedical research
, NHE - HCE = Amount of investment in the medical sector of economy (buildings, research, equipment)
Health Consumption Expenditures: HCE - ✔✔a subset of NHE, includes personal health care spending,
government administration and net cost of private health insurance and public health activities
Personal Health Care: PHC - ✔✔subset of HCE, including all medical goods and service that's used to
diagnose, treat, and prevent health problems of a specific person
How much NHE spent on Health Care? - ✔✔$3.49 Trillion
Per capita amount: over $10k
% of GDP: 18%
Buying Power: $1,200 when adjusted by CPI
Largest contributors to the Personal Health Care (PHC) - ✔✔hospitalization, physician services, Rx, other
health care goods and services
What accounted for the largest share of NHE? - ✔✔Hospital Care: 33% of spending
Professional Services: 20% doctors NHE
Retail Rx: 10.5%
Three Categories of PHC increased as a share of NHE - ✔✔Health Residential and Personal Care: 5.2% of
NHE
Net Cost of Private Health Ins: 6.6% of NHE
Home Health Care: 2.8% of NHE
Chronic Disease and Mental Health Diseases in NHE (percentage) - ✔✔90%
Among the top 5% of users account for about half of the spending
