MHA 707 Exam C 2025/2026 | Complete Study
Guide & Practice Questions
Moral Hazard - correct answerWhen 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 - correct answerthe 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 - correct answerAllows individuals to share risk, i.e., insurance
companies
National Health Expenditure Accounts (NHEA) - correct answerProvides official
estimates of health care spending in the US. It measures health care consumption and
health care investment.
NHEA Benefits - correct answerComprehensive: 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 - correct answerNational Health Expenditures: NHE
Health Consumption Expenditures: HCE
Personal Health Care: PHC
National Health Expenditures: NHE - correct answerall 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 - correct answera 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 - correct answersubset 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? - correct answer$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) - correct answerhospitalization,
physician services, Rx, other health care goods and services
What accounted for the largest share of NHE? - correct answerHospital Care: 33% of
spending
Professional Services: 20% doctors NHE
Retail Rx: 10.5%
Three Categories of PHC increased as a share of NHE - correct answerHealth
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) - correct answer90%
Among the top 5% of users account for about half of the spending
Medical Conditions and Parentages on Americans - correct answer90% of Americans
have 1 risk factor, 52% have 2 or more highest proportion in impoverished and
racial/ethnic minorities
Americans Stat on Health Ins Coverage - correct answer92% of the US population have
some sort of ins (8% or 26.4 M uninsured)
Cost/Cost Plus - correct answerhow hospitals/providers describe payments received for
services they have already provided. The organization tracks all the costs associated
with each customer and then asks to be paid that amount. Contracts specific that the
organization will be reimbursed for actual cost plus an additional percentage of cost
(includes built in profit)
How Money is Paid to Health Care Providers - correct answerCost/Cost Plus
Time and Materials
Fee for Service
Fixed Price
Capitation
Value
, Time and Materials - correct answerA contract type where the seller charges the
buyer for the time and the materials for the
work completed. T&M contracts should have a
not-to-exceed clause (NTE) to contain costs.
fee-for-service - correct answera system under which doctors and hospitals receive a
payment for each service they provide
Fixed Price - correct answerA price that stays the same; there is no debate over price
Capitation - correct answerfixed payment per person to the health care provider for an
agreed-on array of services during a contract period (per member/per month). Payment
is the same no matter the amount or type of service. May put the physician at odds with
the patient
Value - correct answerpayment model in which the provider is rewarded for the value
delivered. Value based systems are most often used when the value is easy to measure
and indisputable. Value based purchasing, bundled payments, and P4P are used by the
CMS- top performers make extra money that is taken from poorer performers
Major Health Care Payers in the US - correct answer-Private Health Insurance
(individual/small business and large)
-Government (Medicare/Medicaid, CHIP, other government programs)
-Individual Patient (out of pocket)
-Provider (using discounts, write offs)
-Voluntary charitable organizations
Most obtain insurance via employer or spouses' employer
Less than 2% of employees offered traditional or indemnity health insurance plans
Employer Managed Care Plans - correct answerHMO
PPO
POS
EPO
Other permutations
HMO (Health Maintenance Organization) - correct answerA managed care organization
that provides comprehensive medical services for a predetermined annual fee per
enrollee.
PPO (Preferred Provider Organization) - correct answerA type of health plan that
contracts with medical providers, such as hospitals and doctors, to create a network of
participating providers. You pay less if you use providers that belong to the plan's
network.
Guide & Practice Questions
Moral Hazard - correct answerWhen 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 - correct answerthe 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 - correct answerAllows individuals to share risk, i.e., insurance
companies
National Health Expenditure Accounts (NHEA) - correct answerProvides official
estimates of health care spending in the US. It measures health care consumption and
health care investment.
NHEA Benefits - correct answerComprehensive: 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 - correct answerNational Health Expenditures: NHE
Health Consumption Expenditures: HCE
Personal Health Care: PHC
National Health Expenditures: NHE - correct answerall 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 - correct answera 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 - correct answersubset 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? - correct answer$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) - correct answerhospitalization,
physician services, Rx, other health care goods and services
What accounted for the largest share of NHE? - correct answerHospital Care: 33% of
spending
Professional Services: 20% doctors NHE
Retail Rx: 10.5%
Three Categories of PHC increased as a share of NHE - correct answerHealth
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) - correct answer90%
Among the top 5% of users account for about half of the spending
Medical Conditions and Parentages on Americans - correct answer90% of Americans
have 1 risk factor, 52% have 2 or more highest proportion in impoverished and
racial/ethnic minorities
Americans Stat on Health Ins Coverage - correct answer92% of the US population have
some sort of ins (8% or 26.4 M uninsured)
Cost/Cost Plus - correct answerhow hospitals/providers describe payments received for
services they have already provided. The organization tracks all the costs associated
with each customer and then asks to be paid that amount. Contracts specific that the
organization will be reimbursed for actual cost plus an additional percentage of cost
(includes built in profit)
How Money is Paid to Health Care Providers - correct answerCost/Cost Plus
Time and Materials
Fee for Service
Fixed Price
Capitation
Value
, Time and Materials - correct answerA contract type where the seller charges the
buyer for the time and the materials for the
work completed. T&M contracts should have a
not-to-exceed clause (NTE) to contain costs.
fee-for-service - correct answera system under which doctors and hospitals receive a
payment for each service they provide
Fixed Price - correct answerA price that stays the same; there is no debate over price
Capitation - correct answerfixed payment per person to the health care provider for an
agreed-on array of services during a contract period (per member/per month). Payment
is the same no matter the amount or type of service. May put the physician at odds with
the patient
Value - correct answerpayment model in which the provider is rewarded for the value
delivered. Value based systems are most often used when the value is easy to measure
and indisputable. Value based purchasing, bundled payments, and P4P are used by the
CMS- top performers make extra money that is taken from poorer performers
Major Health Care Payers in the US - correct answer-Private Health Insurance
(individual/small business and large)
-Government (Medicare/Medicaid, CHIP, other government programs)
-Individual Patient (out of pocket)
-Provider (using discounts, write offs)
-Voluntary charitable organizations
Most obtain insurance via employer or spouses' employer
Less than 2% of employees offered traditional or indemnity health insurance plans
Employer Managed Care Plans - correct answerHMO
PPO
POS
EPO
Other permutations
HMO (Health Maintenance Organization) - correct answerA managed care organization
that provides comprehensive medical services for a predetermined annual fee per
enrollee.
PPO (Preferred Provider Organization) - correct answerA type of health plan that
contracts with medical providers, such as hospitals and doctors, to create a network of
participating providers. You pay less if you use providers that belong to the plan's
network.
