MHA 710 Exam 1
What is "economics"? - CORRECT ANSWER-A Map for decision making.
Economics analyzes the allocation of scarce resources.
What are some of the specific challenges faced by managers in healthcare? -
CORRECT ANSWER-1. The central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
What does asymmetric information mean? Can you give an example? -
CORRECT ANSWER-When one party in a transaction has less information than
the other party. For example, physicians and other healthcare providers usually
understand patients' medical options better than patients do. Unaware of their
choices, patients may accept recommendations for therapies that are not
cost-effective or, recognizing their vulnerability to physicians' self-serving advice,
may resist recommendations made in their best interest.
What is adverse selection? - CORRECT ANSWER-A situation that occurs when
buyers have better information than sellers. For example, high-risk consumers
are willing to pay more for insurance than low-risk consumers are. (Organizations
that have difficulty distinguishing high-risk from low-risk consumers are unlikely to
be profitable.)
What is the problem of scarcity? - CORRECT ANSWER-Demand for a good or
service is greater than the availability
What does it mean to say people are assumed to make choices rationally? -
CORRECT ANSWER-focuses on individuals' efforts to best realize their goals,
given their resources.
,What does it mean to says resources are scarce? - CORRECT
ANSWER-Anything useful in consumption or production that has alternative
uses.
What is opportunity cost? - CORRECT ANSWER-Potential loss from a missed
opportunity. Passing up the next best choice.
What does "marginal" refer to? - CORRECT ANSWER-The examination of the
costs and benefits through a small change in the production of goods
What does efficiency refer to? - CORRECT ANSWER-No way to rearrange
production of goods in a way that makes one person more better off without
making somebody else worse off. How well an economy uses scare resources to
meet the needs/wants of their customers
How do positive economic statements differ from normative economic
statements? - CORRECT ANSWER-Positive economics is objective while
normative economics is subjective. Facts/ What is vs What should be
How can economics be applied to the health sector? - CORRECT
ANSWER-Describe, Explain, Evaluate, Plan
As we progress through the chapters, think about the special characteristics that
apply to the health sector that might limit the applicability of traditional economic
models. - CORRECT ANSWER-Social determinants of health, few insurance
companies that providers rely on, not a perfectly competitive market
How are healthcare products both outputs and inputs? Can you give an
example? - CORRECT ANSWER-Products (goods and services are considered
products) are commonly both inputs and outputs. For example, a surgical tool is
an input into a surgery and an output of a surgical tool company. Similarly, the
surgery itself can be considered an output of the surgical team or an input into
the health of the patient.
What is a life year? And what is it used for in the context of this chapter? -
CORRECT ANSWER-One additional year of life. It can equal one added year of
,life for an individual or an average of 1/nth of a year of life for n people. An
example is spending $1 million by reducing childhood obesity and saving
thousands of lives or using if for colonoscopies in 81 year old african american
men and saving few lives.
What are examples of interventions that have the most impact on life years and
those that have less impact? - CORRECT ANSWER-Interventions with the most
include antismoking, reducing childhood obesity, and multidisciplinary
measurement of heart failure. Interventions with the least include colonoscopies
for african american men who are 81 or 76 and multidisciplinary heart failure
measurement with exercise.
How does healthcare spending per person in the US compare to other countries?
- CORRECT ANSWER-US spends far more per person on healthcare than any
other large countries.
How does US life expectancy at birth compare to other countries? - CORRECT
ANSWER-27 out of 34 of the OECD countries (bad!)
Has the US achieved the same increases in life expectancy relative to their
changes in spending as in other countries? - CORRECT ANSWER-From one
perspective, this increase in life expectancy reflects impres-sive performance.
From another, it does not compare well to the performance of other industrialized
countries. For example, French life expectancy at birth rose from 79.2 years in
2000 to 82.4 years in 2015, and costs increased less than half as much in France
as in the United States
Why might we want to measure healthcare spending as a share of GDP instead
of just healthcare spending per person? - CORRECT ANSWER-What appears to
be higher spending, however, might just be the effects of inflation. To avoid
inaccuracies resulting from changes in the value of money, economists use two
strategies. The simplest and most reliable strategy to report spend-ing uses
shares of national income, or gross domestic product (GDP). This examination of
shares removes the effects of inflation
What does inflation measure? - CORRECT ANSWER-Changes in level of price
or goods over time
, How have expenditures by healthcare sector changed since 2000? - CORRECT
ANSWER-Hospitals' share of total spending has risen by 2.0 percent since 2000,
reflecting the continuing consolidation of services into health systems. Rapid
increases in prices and intensity (which we cannot separate at this point) explain
most of this increase. Spending on pharmaceuticals has risen sharply. spending
for physicians' services claims nearly a fifth of total spending. The share has
fallen since 2000 resulting from consolidation into systems and increasing
spending on pharmaceuticals. steady decline in the share of direct consumer
payments for healthcare. Broader and more complete insurance coverage
explains this trend. Rapid expansion of the healthcare sector has been a feature
of American life for most of this century, but its pace has clearly slowed.
healthcare spending in 2000 claimed 12.5 percent of national income. By 2016, it
had risen to 17.2 percent of national income. However, in contrast to the rapid
expansion of previous years, the share plateaued between 2009 and 2013.
What are some of the disruptive changes happening in the healthcare system? -
CORRECT ANSWER-rapid technological change,
the shrinking share of direct consumer payments,
the rapid growth of the healthcare sector,
the rapid growth of the outpatient sector,
the slower growth of the inpatient sector,
the steady increase in the number of uninsured Americans.
Only 3 have had no changes including: rapid technological change, the shrinking
share of direct consumer payments, and slower growth of the inpatient sector.
ACA was very disruptive.
What is a deductible? - CORRECT ANSWER-The amount a consumer must pay
before insurance covers any healthcare costs.
What is "economics"? - CORRECT ANSWER-A Map for decision making.
Economics analyzes the allocation of scarce resources.
What are some of the specific challenges faced by managers in healthcare? -
CORRECT ANSWER-1. The central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
What does asymmetric information mean? Can you give an example? -
CORRECT ANSWER-When one party in a transaction has less information than
the other party. For example, physicians and other healthcare providers usually
understand patients' medical options better than patients do. Unaware of their
choices, patients may accept recommendations for therapies that are not
cost-effective or, recognizing their vulnerability to physicians' self-serving advice,
may resist recommendations made in their best interest.
What is adverse selection? - CORRECT ANSWER-A situation that occurs when
buyers have better information than sellers. For example, high-risk consumers
are willing to pay more for insurance than low-risk consumers are. (Organizations
that have difficulty distinguishing high-risk from low-risk consumers are unlikely to
be profitable.)
What is the problem of scarcity? - CORRECT ANSWER-Demand for a good or
service is greater than the availability
What does it mean to say people are assumed to make choices rationally? -
CORRECT ANSWER-focuses on individuals' efforts to best realize their goals,
given their resources.
,What does it mean to says resources are scarce? - CORRECT
ANSWER-Anything useful in consumption or production that has alternative
uses.
What is opportunity cost? - CORRECT ANSWER-Potential loss from a missed
opportunity. Passing up the next best choice.
What does "marginal" refer to? - CORRECT ANSWER-The examination of the
costs and benefits through a small change in the production of goods
What does efficiency refer to? - CORRECT ANSWER-No way to rearrange
production of goods in a way that makes one person more better off without
making somebody else worse off. How well an economy uses scare resources to
meet the needs/wants of their customers
How do positive economic statements differ from normative economic
statements? - CORRECT ANSWER-Positive economics is objective while
normative economics is subjective. Facts/ What is vs What should be
How can economics be applied to the health sector? - CORRECT
ANSWER-Describe, Explain, Evaluate, Plan
As we progress through the chapters, think about the special characteristics that
apply to the health sector that might limit the applicability of traditional economic
models. - CORRECT ANSWER-Social determinants of health, few insurance
companies that providers rely on, not a perfectly competitive market
How are healthcare products both outputs and inputs? Can you give an
example? - CORRECT ANSWER-Products (goods and services are considered
products) are commonly both inputs and outputs. For example, a surgical tool is
an input into a surgery and an output of a surgical tool company. Similarly, the
surgery itself can be considered an output of the surgical team or an input into
the health of the patient.
What is a life year? And what is it used for in the context of this chapter? -
CORRECT ANSWER-One additional year of life. It can equal one added year of
,life for an individual or an average of 1/nth of a year of life for n people. An
example is spending $1 million by reducing childhood obesity and saving
thousands of lives or using if for colonoscopies in 81 year old african american
men and saving few lives.
What are examples of interventions that have the most impact on life years and
those that have less impact? - CORRECT ANSWER-Interventions with the most
include antismoking, reducing childhood obesity, and multidisciplinary
measurement of heart failure. Interventions with the least include colonoscopies
for african american men who are 81 or 76 and multidisciplinary heart failure
measurement with exercise.
How does healthcare spending per person in the US compare to other countries?
- CORRECT ANSWER-US spends far more per person on healthcare than any
other large countries.
How does US life expectancy at birth compare to other countries? - CORRECT
ANSWER-27 out of 34 of the OECD countries (bad!)
Has the US achieved the same increases in life expectancy relative to their
changes in spending as in other countries? - CORRECT ANSWER-From one
perspective, this increase in life expectancy reflects impres-sive performance.
From another, it does not compare well to the performance of other industrialized
countries. For example, French life expectancy at birth rose from 79.2 years in
2000 to 82.4 years in 2015, and costs increased less than half as much in France
as in the United States
Why might we want to measure healthcare spending as a share of GDP instead
of just healthcare spending per person? - CORRECT ANSWER-What appears to
be higher spending, however, might just be the effects of inflation. To avoid
inaccuracies resulting from changes in the value of money, economists use two
strategies. The simplest and most reliable strategy to report spend-ing uses
shares of national income, or gross domestic product (GDP). This examination of
shares removes the effects of inflation
What does inflation measure? - CORRECT ANSWER-Changes in level of price
or goods over time
, How have expenditures by healthcare sector changed since 2000? - CORRECT
ANSWER-Hospitals' share of total spending has risen by 2.0 percent since 2000,
reflecting the continuing consolidation of services into health systems. Rapid
increases in prices and intensity (which we cannot separate at this point) explain
most of this increase. Spending on pharmaceuticals has risen sharply. spending
for physicians' services claims nearly a fifth of total spending. The share has
fallen since 2000 resulting from consolidation into systems and increasing
spending on pharmaceuticals. steady decline in the share of direct consumer
payments for healthcare. Broader and more complete insurance coverage
explains this trend. Rapid expansion of the healthcare sector has been a feature
of American life for most of this century, but its pace has clearly slowed.
healthcare spending in 2000 claimed 12.5 percent of national income. By 2016, it
had risen to 17.2 percent of national income. However, in contrast to the rapid
expansion of previous years, the share plateaued between 2009 and 2013.
What are some of the disruptive changes happening in the healthcare system? -
CORRECT ANSWER-rapid technological change,
the shrinking share of direct consumer payments,
the rapid growth of the healthcare sector,
the rapid growth of the outpatient sector,
the slower growth of the inpatient sector,
the steady increase in the number of uninsured Americans.
Only 3 have had no changes including: rapid technological change, the shrinking
share of direct consumer payments, and slower growth of the inpatient sector.
ACA was very disruptive.
What is a deductible? - CORRECT ANSWER-The amount a consumer must pay
before insurance covers any healthcare costs.
