HCMG-2020: Final Exam 100% Correct!!
Why has the number of hospitals been decreasing since 1980? - ANSWERSShifting
care from inpatient to outpatient
Focus on home care
Why have rural hospitals been closing? - ANSWERSMedical schools located in cities,
so physicians remain in cities
Overlaps with states without Medicaid expansion --> lots of uninsured people --> lower
demand for care and hard to sustain hospitals
What is driving the decrease in hospital usage? - ANSWERSthe # of admissions
driven by shifting from inpatient to outpatient
Cost Shifting - ANSWERSThe practice of shifting costs to some payers to offset losses
from other payers
Using privately-covered patients to cover the cost of publicly-insured patients
Cross-Subsidization - ANSWERSuse of high prices and profits on one product to
subsidize low prices on another product
overcharging for profitable services to pay for unprofitable ones
Non-Profit Hospitals - ANSWERSIRS tax exemptions
Have mission statements
No substantial part of activities can consist of propaganda, influencing legislation, or
involvement in political campaigns
Community Benefit Standard - ANSWERSThe charitable organization must benefit the
public or the community
Operate an emergency room open to all
Board of directors from the community
Care for all patients able to pay
, Surplus used to improve facilities, equipment, patient care, advancing medical training,
education, and research
Safety-Net Hospitals - ANSWERShospitals that provide a significant level of care to low-
income, uninsured, and vulnerable populations
Tend to have a higher rate of Medicaid-funded and uncompensated care
No standard definition
Often perform poorly on quality measures
Financial constraints → lower performance
Vertical Integration - ANSWERSAs ingle entity controls the entire process
Integrating different levels of providers
Horizontal Integration - ANSWERSSeveral firms involved in the same level of care
What drives consolidation? - ANSWERSLarger fixed cost (administrative burden) →
consolidation creates a bigger pool of administrators
Benefits of Consolidation - ANSWERSQuality improvements (larger size allows for more
costly investments)
Cost savings
Harms of Consolidation - ANSWERSLoss of autonomy
Higher prices for patients (clinics gain market power)
Less innovation (suffers with less competition)
Trends in Integration - ANSWERSReduction in self-employment
Shift from small practices to large practices
Providers and payers organizing into vertically-integrated systems
Primary Care - ANSWERSAccess to preventive care
Less spending overall when people go to primary care
Accounts for the most common interactions w/ the healthcare system
Why did # of PCP visits decrease among privately insured patients between 2008-16? -
ANSWERSSelf management of symptoms
Why has the number of hospitals been decreasing since 1980? - ANSWERSShifting
care from inpatient to outpatient
Focus on home care
Why have rural hospitals been closing? - ANSWERSMedical schools located in cities,
so physicians remain in cities
Overlaps with states without Medicaid expansion --> lots of uninsured people --> lower
demand for care and hard to sustain hospitals
What is driving the decrease in hospital usage? - ANSWERSthe # of admissions
driven by shifting from inpatient to outpatient
Cost Shifting - ANSWERSThe practice of shifting costs to some payers to offset losses
from other payers
Using privately-covered patients to cover the cost of publicly-insured patients
Cross-Subsidization - ANSWERSuse of high prices and profits on one product to
subsidize low prices on another product
overcharging for profitable services to pay for unprofitable ones
Non-Profit Hospitals - ANSWERSIRS tax exemptions
Have mission statements
No substantial part of activities can consist of propaganda, influencing legislation, or
involvement in political campaigns
Community Benefit Standard - ANSWERSThe charitable organization must benefit the
public or the community
Operate an emergency room open to all
Board of directors from the community
Care for all patients able to pay
, Surplus used to improve facilities, equipment, patient care, advancing medical training,
education, and research
Safety-Net Hospitals - ANSWERShospitals that provide a significant level of care to low-
income, uninsured, and vulnerable populations
Tend to have a higher rate of Medicaid-funded and uncompensated care
No standard definition
Often perform poorly on quality measures
Financial constraints → lower performance
Vertical Integration - ANSWERSAs ingle entity controls the entire process
Integrating different levels of providers
Horizontal Integration - ANSWERSSeveral firms involved in the same level of care
What drives consolidation? - ANSWERSLarger fixed cost (administrative burden) →
consolidation creates a bigger pool of administrators
Benefits of Consolidation - ANSWERSQuality improvements (larger size allows for more
costly investments)
Cost savings
Harms of Consolidation - ANSWERSLoss of autonomy
Higher prices for patients (clinics gain market power)
Less innovation (suffers with less competition)
Trends in Integration - ANSWERSReduction in self-employment
Shift from small practices to large practices
Providers and payers organizing into vertically-integrated systems
Primary Care - ANSWERSAccess to preventive care
Less spending overall when people go to primary care
Accounts for the most common interactions w/ the healthcare system
Why did # of PCP visits decrease among privately insured patients between 2008-16? -
ANSWERSSelf management of symptoms
