HMGT 3310 MIDTERM 2025 ACTUAL EXAM (TESTING REAL EXAM
QUESTIONS)AND VERIFIED ANSWERS ( 100% ACCURATE) GET IT RIGHT!!
Question 1
The drive for regulating healthcare systems is often characterized by the "Iron Triangle," which
stems from the fundamental challenge of simultaneously controlling which three factors?
A) Public opinion, political will, and ethical standards
B) Infrastructure, technology, and workforce
C) Quality, access, and cost
D) Patient satisfaction, provider reimbursement, and legal liability
E) Legislative, Executive, and Judicial powers
Correct Answer: C) Quality, access, and cost
Rationale: The "Iron Triangle" of healthcare is a widely accepted concept in health policy
that illustrates the inherent trade-offs in controlling quality, access, and cost. It is a
fundamental understanding that an attempt to improve one of these factors (e.g., improve
quality) often leads to a worsening of one or both of the others (e.g., increase cost or reduce
access), which is why regulating these three factors is the core challenge of the health
system.
Question 2
What was the first form of health insurance, which involved a prepayment plan for hospital
services?
A) The American Medical Association's (AMA) first organized insurance plan.
B) Health Maintenance Organizations (HMOs) established in 1973.
C) The initial Medicare and Medicaid programs in 1965.
D) A plan developed by Baylor Hospitals for school teachers.
E) The Blue Shield plan for physician services.
Correct Answer: D) A plan developed by Baylor Hospitals for school teachers.
Rationale: The Baylor Hospital plan, developed in 1929, is generally recognized as the first
form of modern health insurance. It offered unlimited access to hospital care for a set
monthly prepayment from a group of school teachers, establishing the model for risk-
pooling and prepayment that commercial insurance would later adopt.
Question 3
The Blue Cross insurance company, formed in 1939, was the first nonprofit insurance company
to cover which specific healthcare expense?
A) Outpatient physician services only.
B) Pharmacy costs and durable medical equipment.
C) Inpatient hospital expenses.
D) Mental health and substance abuse treatment.
E) Preventative and wellness services.
, 2
Correct Answer: C) Inpatient hospital expenses.
Rationale: Blue Cross was established as a nonprofit entity designed to provide affordable
coverage specifically for inpatient hospital services, which was a core need after the Great
Depression. This focus on hospital care differentiated it from Blue Shield, which later
developed to cover physician services.
Question 4
Which of the following describes the major impact of World War II on the development of
employer-paid health insurance?
A) Congress mandated that all employers must provide a minimum level of health benefits.
B) The government directly subsidized health insurance costs for defense workers.
C) Health insurance was exempted from the wage freeze, making it an attractive fringe benefit to
recruit workers.
D) Insurance companies were required to offer community-rated plans regardless of risk.
E) The Veterans Administration took over all non-military health services.
Correct Answer: C) Health insurance was exempted from the wage freeze, making it an
attractive fringe benefit to recruit workers.
Rationale: During WWII, the government imposed a freeze on wages to control inflation.
However, fringe benefits, notably employer-paid health insurance, were exempted. Firms
used this exemption to entice prospective workers by offering valuable benefits,
fundamentally linking employment to health coverage in the U.S. system.
Question 5
The Hill-Burton Act of 1946 primarily provided federal grants for which purpose?
A) Establishing the National Institutes of Health (NIH).
B) Funding the expansion of rural primary care clinics.
C) Funding hospital construction and renovations.
D) Creating the first state-level health insurance marketplaces.
E) Instituting the Resource-Based Relative Value Scale (RBRVS).
Correct Answer: C) Funding hospital construction and renovations.
Rationale: The Hill-Burton Act, officially the Hospital Survey and Construction Act, was
passed in 1946 to address the critical need for new hospitals and modernization of existing
facilities following World War II and the Great Depression. The grants provided were
central to the expansion of the U.S. hospital infrastructure.
Question 6
One of the mandatory provisions of the Hill-Burton Act that required hospitals to provide a
minimum amount of care to vulnerable populations was the requirement to:
A) Operate only specialty-focused treatment centers.
B) Decline from discriminating against patients based on race.
, 3
C) Pay all hospital staff above the federal minimum wage.
D) Enroll all patients in a managed care organization (MCO).
E) Focus solely on preventative medicine and public health.
Correct Answer: B) Decline from discriminating against patients based on race.
Rationale: The Hill-Burton Act required recipient hospitals to adhere to several mandates,
including providing a minimum amount of indigent care, operating Emergency Rooms
(ERs), and declining to discriminate against patients based on race. This was a significant
early step in addressing access and equity in hospital care, although enforcement took time.
Question 7
Medicare and Medicaid, the government's major health insurance programs for the elderly and
the indigent, respectively, were established in what year?
A) 1946
B) 1973
C) 1965
D) 1983
E) 1950
Correct Answer: C) 1965
Rationale: Medicare (Title XVIII) and Medicaid (Title XIX) were established by Congress
and signed into law by President Lyndon B. Johnson in 1965 as amendments to the Social
Security Act. These programs created the foundation for federal involvement in health
insurance and significantly increased the role of the federal government as a payer and
regulator.
Question 8
In 1973, legislation was passed to encourage the adoption of Health Maintenance Organizations
(HMOs) as a less costly alternative to traditional health insurance. The defining feature of HMOs
at that time was their focus on:
A) Fee-for-service reimbursement for all physicians.
B) Providing comprehensive coverage through a closed network and controlling costs.
C) Excluding preventative services from their coverage plans.
D) Covering only catastrophic, high-cost illnesses.
E) Offering unlimited access to any provider outside of the network.
Correct Answer: B) Providing comprehensive coverage through a closed network and
controlling costs.
Rationale: The HMO Act of 1973 provided federal funding and incentives to encourage the
development and adoption of HMOs. HMOs were characterized as a system that provided
comprehensive care to a defined population in return for a fixed, periodic prepayment,
making them a key early attempt at cost control through managed care.
, 4
Question 9
In 1976, Congress attempted to control healthcare costs by mandating states to implement health
planning programs. The primary purpose of these programs was to rationalize the proliferation
of:
A) Primary care physician offices in rural areas.
B) Expensive and duplicative services and technologies.
C) Community health education campaigns.
D) Public health sanitation standards.
E) Electronic health record systems.
Correct Answer: B) Expensive and duplicative services and technologies.
Rationale: The 1976 legislation (National Health Planning and Resources Development Act)
aimed to curb rising costs by requiring states to establish "Certificate of Need" (CON)
programs. The goal was to rationalize the spread of expensive capital investments (like CT
scanners or new hospitals) to prevent duplication, overcapacity, and the resulting overuse
of high-cost services.
Question 10
In 1983, Medicare implemented a major change to control hospital costs by switching the
reimbursement method from a fee-for-service model to one based on:
A) Annual block grants to state health departments.
B) Prospectively set amounts determined by each patient's primary diagnosis (DRGs).
C) Retrospectively reviewing all charges for medical necessity.
D) Capitation payments to primary care providers.
E) Global budgeting for the entire hospital system.
Correct Answer: B) Prospectively set amounts determined by each patient's primary
diagnosis (DRGs).
Rationale: The change in 1983 was the introduction of the Prospective Payment System
(PPS) based on Diagnosis-Related Groups (DRGs). Under this system, Medicare paid a
prospectively set amount for a patient's hospital stay based on their diagnosis, regardless of
the actual cost incurred. This fundamentally changed the incentive structure from
providing more services (Fee-for-Service) to managing costs efficiently.
Question 11
The American healthcare regulatory system is often understood through its "pillars," which
represent the sources of regulatory power. These pillars are:
A) Technology, Finance, and Workforce
B) Legislative, Executive, and Judicial
C) Primary, Secondary, and Tertiary care
QUESTIONS)AND VERIFIED ANSWERS ( 100% ACCURATE) GET IT RIGHT!!
Question 1
The drive for regulating healthcare systems is often characterized by the "Iron Triangle," which
stems from the fundamental challenge of simultaneously controlling which three factors?
A) Public opinion, political will, and ethical standards
B) Infrastructure, technology, and workforce
C) Quality, access, and cost
D) Patient satisfaction, provider reimbursement, and legal liability
E) Legislative, Executive, and Judicial powers
Correct Answer: C) Quality, access, and cost
Rationale: The "Iron Triangle" of healthcare is a widely accepted concept in health policy
that illustrates the inherent trade-offs in controlling quality, access, and cost. It is a
fundamental understanding that an attempt to improve one of these factors (e.g., improve
quality) often leads to a worsening of one or both of the others (e.g., increase cost or reduce
access), which is why regulating these three factors is the core challenge of the health
system.
Question 2
What was the first form of health insurance, which involved a prepayment plan for hospital
services?
A) The American Medical Association's (AMA) first organized insurance plan.
B) Health Maintenance Organizations (HMOs) established in 1973.
C) The initial Medicare and Medicaid programs in 1965.
D) A plan developed by Baylor Hospitals for school teachers.
E) The Blue Shield plan for physician services.
Correct Answer: D) A plan developed by Baylor Hospitals for school teachers.
Rationale: The Baylor Hospital plan, developed in 1929, is generally recognized as the first
form of modern health insurance. It offered unlimited access to hospital care for a set
monthly prepayment from a group of school teachers, establishing the model for risk-
pooling and prepayment that commercial insurance would later adopt.
Question 3
The Blue Cross insurance company, formed in 1939, was the first nonprofit insurance company
to cover which specific healthcare expense?
A) Outpatient physician services only.
B) Pharmacy costs and durable medical equipment.
C) Inpatient hospital expenses.
D) Mental health and substance abuse treatment.
E) Preventative and wellness services.
, 2
Correct Answer: C) Inpatient hospital expenses.
Rationale: Blue Cross was established as a nonprofit entity designed to provide affordable
coverage specifically for inpatient hospital services, which was a core need after the Great
Depression. This focus on hospital care differentiated it from Blue Shield, which later
developed to cover physician services.
Question 4
Which of the following describes the major impact of World War II on the development of
employer-paid health insurance?
A) Congress mandated that all employers must provide a minimum level of health benefits.
B) The government directly subsidized health insurance costs for defense workers.
C) Health insurance was exempted from the wage freeze, making it an attractive fringe benefit to
recruit workers.
D) Insurance companies were required to offer community-rated plans regardless of risk.
E) The Veterans Administration took over all non-military health services.
Correct Answer: C) Health insurance was exempted from the wage freeze, making it an
attractive fringe benefit to recruit workers.
Rationale: During WWII, the government imposed a freeze on wages to control inflation.
However, fringe benefits, notably employer-paid health insurance, were exempted. Firms
used this exemption to entice prospective workers by offering valuable benefits,
fundamentally linking employment to health coverage in the U.S. system.
Question 5
The Hill-Burton Act of 1946 primarily provided federal grants for which purpose?
A) Establishing the National Institutes of Health (NIH).
B) Funding the expansion of rural primary care clinics.
C) Funding hospital construction and renovations.
D) Creating the first state-level health insurance marketplaces.
E) Instituting the Resource-Based Relative Value Scale (RBRVS).
Correct Answer: C) Funding hospital construction and renovations.
Rationale: The Hill-Burton Act, officially the Hospital Survey and Construction Act, was
passed in 1946 to address the critical need for new hospitals and modernization of existing
facilities following World War II and the Great Depression. The grants provided were
central to the expansion of the U.S. hospital infrastructure.
Question 6
One of the mandatory provisions of the Hill-Burton Act that required hospitals to provide a
minimum amount of care to vulnerable populations was the requirement to:
A) Operate only specialty-focused treatment centers.
B) Decline from discriminating against patients based on race.
, 3
C) Pay all hospital staff above the federal minimum wage.
D) Enroll all patients in a managed care organization (MCO).
E) Focus solely on preventative medicine and public health.
Correct Answer: B) Decline from discriminating against patients based on race.
Rationale: The Hill-Burton Act required recipient hospitals to adhere to several mandates,
including providing a minimum amount of indigent care, operating Emergency Rooms
(ERs), and declining to discriminate against patients based on race. This was a significant
early step in addressing access and equity in hospital care, although enforcement took time.
Question 7
Medicare and Medicaid, the government's major health insurance programs for the elderly and
the indigent, respectively, were established in what year?
A) 1946
B) 1973
C) 1965
D) 1983
E) 1950
Correct Answer: C) 1965
Rationale: Medicare (Title XVIII) and Medicaid (Title XIX) were established by Congress
and signed into law by President Lyndon B. Johnson in 1965 as amendments to the Social
Security Act. These programs created the foundation for federal involvement in health
insurance and significantly increased the role of the federal government as a payer and
regulator.
Question 8
In 1973, legislation was passed to encourage the adoption of Health Maintenance Organizations
(HMOs) as a less costly alternative to traditional health insurance. The defining feature of HMOs
at that time was their focus on:
A) Fee-for-service reimbursement for all physicians.
B) Providing comprehensive coverage through a closed network and controlling costs.
C) Excluding preventative services from their coverage plans.
D) Covering only catastrophic, high-cost illnesses.
E) Offering unlimited access to any provider outside of the network.
Correct Answer: B) Providing comprehensive coverage through a closed network and
controlling costs.
Rationale: The HMO Act of 1973 provided federal funding and incentives to encourage the
development and adoption of HMOs. HMOs were characterized as a system that provided
comprehensive care to a defined population in return for a fixed, periodic prepayment,
making them a key early attempt at cost control through managed care.
, 4
Question 9
In 1976, Congress attempted to control healthcare costs by mandating states to implement health
planning programs. The primary purpose of these programs was to rationalize the proliferation
of:
A) Primary care physician offices in rural areas.
B) Expensive and duplicative services and technologies.
C) Community health education campaigns.
D) Public health sanitation standards.
E) Electronic health record systems.
Correct Answer: B) Expensive and duplicative services and technologies.
Rationale: The 1976 legislation (National Health Planning and Resources Development Act)
aimed to curb rising costs by requiring states to establish "Certificate of Need" (CON)
programs. The goal was to rationalize the spread of expensive capital investments (like CT
scanners or new hospitals) to prevent duplication, overcapacity, and the resulting overuse
of high-cost services.
Question 10
In 1983, Medicare implemented a major change to control hospital costs by switching the
reimbursement method from a fee-for-service model to one based on:
A) Annual block grants to state health departments.
B) Prospectively set amounts determined by each patient's primary diagnosis (DRGs).
C) Retrospectively reviewing all charges for medical necessity.
D) Capitation payments to primary care providers.
E) Global budgeting for the entire hospital system.
Correct Answer: B) Prospectively set amounts determined by each patient's primary
diagnosis (DRGs).
Rationale: The change in 1983 was the introduction of the Prospective Payment System
(PPS) based on Diagnosis-Related Groups (DRGs). Under this system, Medicare paid a
prospectively set amount for a patient's hospital stay based on their diagnosis, regardless of
the actual cost incurred. This fundamentally changed the incentive structure from
providing more services (Fee-for-Service) to managing costs efficiently.
Question 11
The American healthcare regulatory system is often understood through its "pillars," which
represent the sources of regulatory power. These pillars are:
A) Technology, Finance, and Workforce
B) Legislative, Executive, and Judicial
C) Primary, Secondary, and Tertiary care
