IHOP Exam 2 UPDATED Exam Questions
and CORRECT Answers
How We Pay for Health Care - CORRECT ANSWER - Insurance or Self Pay
Complexity of US Health Care System - CORRECT ANSWER - Many payers, many
private plans, many government programs, many payment methods, many uninsured
Financing Influence on Demand - CORRECT ANSWER - This determines who has access
to care
Health Insurance - CORRECT ANSWER - lowers out-of-pocket costs, patient's consumer
more, leads to a "moral hazard"
Financing Influence on Supply - CORRECT ANSWER - New services proliferate when
they are covered by health insurance, given rise to subindustries, influence on technology
diffusion and utilization, get more of what is paid for and provide more of what they are paid for
Consequences of Financing - CORRECT ANSWER - Various Management Decisions
Influenced By Reimbursement, Financing affects supply & distribution of health professionals,
financing eventually affects total health care expenditures
Expenditures = Price * Quantity - CORRECT ANSWER -
Expenditures are Increase By - CORRECT ANSWER - Expansion of health insurance,
increase in health insurance premiums
Expenditures Can Be Reduced By - CORRECT ANSWER - Restricting Insurance,
Restricting Reimbursement to Providers, Having Few Specialists, Spending Less on R & D,
Direct control over utilization, Designating certain services as not covered
,Insurance - CORRECT ANSWER - Protects against risk
Risk - CORRECT ANSWER - The possibility of substantial financial loss from some
event, where probability of occurrence is small
Four Principles of Insurance - CORRECT ANSWER - 1. Risk is Unpredictable for the
Individual 2. Risk can be predicted with some accuracy in a large group 3. Insurance pools
resources to spread risk 4. Losses are shared by all members
Underwriting - CORRECT ANSWER - Process of using a large group to estimate total
risk for an individual and spread the risk
Health Insurance - CORRECT ANSWER - Is designed to be used, unlike homeowner's
insurance, flood insurance, car insurance, life insurance etc.
Premiums - CORRECT ANSWER - amount charged by insurer to insure against risk,
involves employer & employee cost sharing
Cost sharing - CORRECT ANSWER - deductibles, co-payments, coinsurance reduces
moral hazard
Moral hazard - CORRECT ANSWER - using lots of resources because you have them
Rand Cost Sharing Experiment of 1980s - CORRECT ANSWER - Identified the concept
that cost sharing reduces moral hazard
Deductibles - CORRECT ANSWER - amount paid before insurance covers costs, applied
annually
First dollar coverage plans - CORRECT ANSWER - plans without co-pays or deductibles,
very rare
, Co-payments - CORRECT ANSWER - amount paid along with insurance payment for
services
Coinsurance - CORRECT ANSWER - another insurance plan besides primary plan to
cover other uncovered costs
Two Risk Assessment Methods - CORRECT ANSWER - experience rating, community
rating
Experience rating - CORRECT ANSWER - group's medical claims experience, vary from
group to group
Community Rating - CORRECT ANSWER - risk spread among a larger community, risks
include smoking, pre-existing conditions etc. good risks help pay for poor risks
Indemnity plan - CORRECT ANSWER - reimburses the insured a predetermined amount
per service, insured is responsible for paying provider
Service Plan - CORRECT ANSWER - provides services to the insured, plan pays the
provider directly-except for deductibles and co-payments
Health Insurance Coverage - CORRECT ANSWER - only what is considered "medically
necessary", vision and dental are often separate
Group Insurance - CORRECT ANSWER - Tax advantages when obtained through
employer
Individual insurance - CORRECT ANSWER - cost based on individual's health, this is
most expensive way of obtaining insurance
and CORRECT Answers
How We Pay for Health Care - CORRECT ANSWER - Insurance or Self Pay
Complexity of US Health Care System - CORRECT ANSWER - Many payers, many
private plans, many government programs, many payment methods, many uninsured
Financing Influence on Demand - CORRECT ANSWER - This determines who has access
to care
Health Insurance - CORRECT ANSWER - lowers out-of-pocket costs, patient's consumer
more, leads to a "moral hazard"
Financing Influence on Supply - CORRECT ANSWER - New services proliferate when
they are covered by health insurance, given rise to subindustries, influence on technology
diffusion and utilization, get more of what is paid for and provide more of what they are paid for
Consequences of Financing - CORRECT ANSWER - Various Management Decisions
Influenced By Reimbursement, Financing affects supply & distribution of health professionals,
financing eventually affects total health care expenditures
Expenditures = Price * Quantity - CORRECT ANSWER -
Expenditures are Increase By - CORRECT ANSWER - Expansion of health insurance,
increase in health insurance premiums
Expenditures Can Be Reduced By - CORRECT ANSWER - Restricting Insurance,
Restricting Reimbursement to Providers, Having Few Specialists, Spending Less on R & D,
Direct control over utilization, Designating certain services as not covered
,Insurance - CORRECT ANSWER - Protects against risk
Risk - CORRECT ANSWER - The possibility of substantial financial loss from some
event, where probability of occurrence is small
Four Principles of Insurance - CORRECT ANSWER - 1. Risk is Unpredictable for the
Individual 2. Risk can be predicted with some accuracy in a large group 3. Insurance pools
resources to spread risk 4. Losses are shared by all members
Underwriting - CORRECT ANSWER - Process of using a large group to estimate total
risk for an individual and spread the risk
Health Insurance - CORRECT ANSWER - Is designed to be used, unlike homeowner's
insurance, flood insurance, car insurance, life insurance etc.
Premiums - CORRECT ANSWER - amount charged by insurer to insure against risk,
involves employer & employee cost sharing
Cost sharing - CORRECT ANSWER - deductibles, co-payments, coinsurance reduces
moral hazard
Moral hazard - CORRECT ANSWER - using lots of resources because you have them
Rand Cost Sharing Experiment of 1980s - CORRECT ANSWER - Identified the concept
that cost sharing reduces moral hazard
Deductibles - CORRECT ANSWER - amount paid before insurance covers costs, applied
annually
First dollar coverage plans - CORRECT ANSWER - plans without co-pays or deductibles,
very rare
, Co-payments - CORRECT ANSWER - amount paid along with insurance payment for
services
Coinsurance - CORRECT ANSWER - another insurance plan besides primary plan to
cover other uncovered costs
Two Risk Assessment Methods - CORRECT ANSWER - experience rating, community
rating
Experience rating - CORRECT ANSWER - group's medical claims experience, vary from
group to group
Community Rating - CORRECT ANSWER - risk spread among a larger community, risks
include smoking, pre-existing conditions etc. good risks help pay for poor risks
Indemnity plan - CORRECT ANSWER - reimburses the insured a predetermined amount
per service, insured is responsible for paying provider
Service Plan - CORRECT ANSWER - provides services to the insured, plan pays the
provider directly-except for deductibles and co-payments
Health Insurance Coverage - CORRECT ANSWER - only what is considered "medically
necessary", vision and dental are often separate
Group Insurance - CORRECT ANSWER - Tax advantages when obtained through
employer
Individual insurance - CORRECT ANSWER - cost based on individual's health, this is
most expensive way of obtaining insurance
