Healthcare Finance Exam 1
Reasons the healthcare system needs to change - correct answer ✔✔Fiscally unsustainable: taking more
domestic product every year, costs continue to rise in addition to the number of uninsured risings
Current health care costs consume how much of the GDP - correct answer ✔✔(GDP= Gross Domestic
Product) 17.1%
What happens to demand when price declines and spending increases? - correct answer ✔✔Demand
becomes elastic
Factors that shift demand for care - correct answer ✔✔Income, age of consumer, insurance coverage,
price of substitutes/complements, consumer "taste"
What happens to the supply curve when the cost of services dramatically increases? - correct answer
✔✔The supply curve goes up by shifting to the right
Number of uninsured people in the United States - correct answer ✔✔45-50 million
Biggest factor affecting healthcare in the future - correct answer ✔✔The elderly: strain on healthcare
system, ethical issues (assisted suicide), end of life/palliative care, chronic diseases
Why does the U.S. spend more on healthcare than any other developed country? - correct answer
✔✔Care costs more in the U.S. than in any other developed country due to:
*inflation
*increase in elderly population
*Emphasis on medical intervention rather than prevention
*Prices set by third party payers and don't reflect demand
*Research and development of new technology=expensive
*Population growth: especially the population that is eligible for medicaid
, *Increase in chronic illnesses (obesity)
*Market Failure: healthcare market is unique and exists outside other normal markets
*Administrative costs: government programs made to help those struggling in the recession, growth in
these programs as well--> need additional funding
*Fraud and Abuse: on massive scales, ex=scooter store
*Defensive medicine/malpractice: when doctors order lots of test/go overboard when it comes to a
diagnosis in order to avoid being sued in the future
Why is the Federal Budget Important? - correct answer ✔✔Through Medicare and Medicaid programs
the federal government is the largest purchaser of healthcare in the U.S.
What are the federally funded health programs? - correct answer ✔✔Medicare, Medicaid, SCHIP
What is the main cause(s) of the national debt? - correct answer ✔✔Bush tax cuts, unfunded wars,
spending exceeding income
Paul Krugman - correct answer ✔✔Noble Prize winner in economics
*Economist that as called for cuts in federal healthcare spending
What is Social Security Funded by? - correct answer ✔✔FICA: flat tax placed on employees each pay
period and is matched by your employer
Marine hospitals - correct answer ✔✔First federal involvement in healthcare ; people previously cared
for by family members and usually died.
*provided service to sailors based on the Commerce powers in the constitution in the late 18-19th
century
Almshouses/Poorhouses and Pesthouses - correct answer ✔✔18th century, funded by community/rich
people within the community
*Almshouses: for mentally ill, not well kept and offered minimal care
*Pesthouses: for those with infectious diseases, poor care quality, not well kept or funded
Reasons the healthcare system needs to change - correct answer ✔✔Fiscally unsustainable: taking more
domestic product every year, costs continue to rise in addition to the number of uninsured risings
Current health care costs consume how much of the GDP - correct answer ✔✔(GDP= Gross Domestic
Product) 17.1%
What happens to demand when price declines and spending increases? - correct answer ✔✔Demand
becomes elastic
Factors that shift demand for care - correct answer ✔✔Income, age of consumer, insurance coverage,
price of substitutes/complements, consumer "taste"
What happens to the supply curve when the cost of services dramatically increases? - correct answer
✔✔The supply curve goes up by shifting to the right
Number of uninsured people in the United States - correct answer ✔✔45-50 million
Biggest factor affecting healthcare in the future - correct answer ✔✔The elderly: strain on healthcare
system, ethical issues (assisted suicide), end of life/palliative care, chronic diseases
Why does the U.S. spend more on healthcare than any other developed country? - correct answer
✔✔Care costs more in the U.S. than in any other developed country due to:
*inflation
*increase in elderly population
*Emphasis on medical intervention rather than prevention
*Prices set by third party payers and don't reflect demand
*Research and development of new technology=expensive
*Population growth: especially the population that is eligible for medicaid
, *Increase in chronic illnesses (obesity)
*Market Failure: healthcare market is unique and exists outside other normal markets
*Administrative costs: government programs made to help those struggling in the recession, growth in
these programs as well--> need additional funding
*Fraud and Abuse: on massive scales, ex=scooter store
*Defensive medicine/malpractice: when doctors order lots of test/go overboard when it comes to a
diagnosis in order to avoid being sued in the future
Why is the Federal Budget Important? - correct answer ✔✔Through Medicare and Medicaid programs
the federal government is the largest purchaser of healthcare in the U.S.
What are the federally funded health programs? - correct answer ✔✔Medicare, Medicaid, SCHIP
What is the main cause(s) of the national debt? - correct answer ✔✔Bush tax cuts, unfunded wars,
spending exceeding income
Paul Krugman - correct answer ✔✔Noble Prize winner in economics
*Economist that as called for cuts in federal healthcare spending
What is Social Security Funded by? - correct answer ✔✔FICA: flat tax placed on employees each pay
period and is matched by your employer
Marine hospitals - correct answer ✔✔First federal involvement in healthcare ; people previously cared
for by family members and usually died.
*provided service to sailors based on the Commerce powers in the constitution in the late 18-19th
century
Almshouses/Poorhouses and Pesthouses - correct answer ✔✔18th century, funded by community/rich
people within the community
*Almshouses: for mentally ill, not well kept and offered minimal care
*Pesthouses: for those with infectious diseases, poor care quality, not well kept or funded
