HMGT 3320 EXAM 1 STUDY GUIDE
Scarcity - Answer -A deficiency in the quantity and/or quality of available goods and
services compared with the amounts that people desire
-E.g., Lack of affordable healthcare insurance coverage
-I.e., Supply < Demand
-Scarcity is about having to make choices since there are "not enough" resources to do
everything desired
Economics (in healthcare) - Answer -Deals with consequences of resource scarcity and
making choices.
Specifically, health economics deals with the consequences of resource scarcity in the
healthcare industry and the necessity of making choices in health care.
Three Main Tasks of Economics - Answer --Description
-Explanation
-Evaluation
***These tasks are rarely performed in isolated, descriptive economics usually
complement explanations and evaluations of events
Description - Answer -Involves the identification, definition, and measurement of
phenomena
-Statement of fact, without explanation or analysis
Explanation - Answer -Conducting a cause-and-effect analysis
-Identifying the causes of the events that have occurred
-Generally, uses models to explain
-No judgement is made at this point
Evaluation - Answer -Involves judging or ranking alternative phenomena according to
some standard or relative position of alternatives
-The standard or benchmark must have a level of general acceptance
Economic Variables (Tools of Economic Analysis & Economic Variables) - Answer -An
economically relevant phenomenon whose value or magnitude may vary
Ex: Prices, costs, income, quantities, etc.
-Can be measured along a scale, once appropriate units of measurement have been
chosen
Ex:Cents, dollars per unit, # of patient visits, # of hospital beds, etc.
,Graphic Analysis (Tools of Economic Analysis & Economic Variables) - Answer -
Purpose is to illustrate relations between economic variables
Models (Tools of Economic Analysis & Economic Variables) - Answer -Allow drawing
inferences about the relations expected to occur when specific underlying conditions are
present
Noncausal Relations (Relations Between Variables) - Answer -One variable does not
cause a change in another variable
Casual Relations (Relations Between Variables) - Answer -When one economic
variable changes, the value of a second economic variable also changes as a result
Slope of Relations of Variables - Answer -The slope of a geometric relation shows how
much of a change in one variable is associated with a given change in a related variable
-The slope can be expressed as the magnitude or sensitivity of response
-When the relation is linear, the slope remains constant at every point on the line
Position of Relations - Answer -The relation between variables can have similar slopes
but different positions
Shape of Relations: Nonlinear - Answer -In nonlinear relations, the magnitude of the
response varies along the curve
-Businesses have fixed costs and variables costs that react differently to the level of
output produced
-An organization may also have declining slopes with increased production
Nature of Propositions - Answer -Attempts to spell out consequences of certain
conditions using "if ... then" forms
-The "If" - Conditions or assumptions
-The "Then" - Conclusions, implications or predictions
Example: IF: conditions x, y and z hold, THEN: as a consequence, phenomenon q will
occur
Explanatory Economics: implications are tested against actual data to see if the
prediction actually does occur
Evaluative Economics: actual data is compared against an ideal set of events
Descriptive Elements in Study of Healthcare - Answer --Identify the phenomena of
concern
-Define the phenomena to know their nature precisely
-Measure the phenomena to obtain understanding of their magnitude
Approach 1: Identifying Healthcare System Factors - Answer -Examine factors that
directly influence health
, -Lifestyle elements: diet, sleep, smoking, and other individual behaviors
-Social determinants: income, job, family, community
-Environmental factors: air and water purity
-Genetic factors
-Medical care: preventative services and treatment interventions
Approach 2: Identifying Healthcare System Factors - Answer -Identify the impact that
medical care has on the health status of an individual or society
-How much "health" is being produced with the medical care?
-What improvements in health is medical care supposed to produce?
***These are difficult questions to adress
Medical Care: Basic Process - Answer -Inputs - Instructions, doctors, supplies, pharma,
etc.
YIELDS
Outputs - Medical outcome
Issues with Measuring Output of Healthcare - Answer -The measure should be how
much improvement in health is being produced with medical care
-Volume of medical care provided (e.g., # of patients seen) is not necessarily a good
indicator of the benefits provided by the healthcare system
-Not every patient is identical to the next
-The medical care input for one patient is not identical to the next
Issues with Measuring Quality in Healthcare - Answer -Differing characteristics of
provider organizations
-Structure: amount and type of training of professionals, type of medical equipment
used, techniques (CT vs. X-ray) used
-Process: incorporates what is actually done in provision of care and receipt of care
Institute of Medicine (Medical Care: Measuring Outcomes) - Answer -Quality is the
degree to which healthcare services effects the desired health outcomes of the
individual or population
-Quality healthcare is: "safe, effective, patient-centered, timely, efficient, and equitable"
Medical Care: Measuring Outcomes - Answer -The measure of outcomes deals with
the accuracy of diagnoses and the effectiveness of treatments in producing changes in
health status
Some measures commonly used:
-Hospital mortality rates adjusted for patient condition,
-Rates of adverse events in hospitals
-The reduction in influenza because of immunizations
Scarcity - Answer -A deficiency in the quantity and/or quality of available goods and
services compared with the amounts that people desire
-E.g., Lack of affordable healthcare insurance coverage
-I.e., Supply < Demand
-Scarcity is about having to make choices since there are "not enough" resources to do
everything desired
Economics (in healthcare) - Answer -Deals with consequences of resource scarcity and
making choices.
Specifically, health economics deals with the consequences of resource scarcity in the
healthcare industry and the necessity of making choices in health care.
Three Main Tasks of Economics - Answer --Description
-Explanation
-Evaluation
***These tasks are rarely performed in isolated, descriptive economics usually
complement explanations and evaluations of events
Description - Answer -Involves the identification, definition, and measurement of
phenomena
-Statement of fact, without explanation or analysis
Explanation - Answer -Conducting a cause-and-effect analysis
-Identifying the causes of the events that have occurred
-Generally, uses models to explain
-No judgement is made at this point
Evaluation - Answer -Involves judging or ranking alternative phenomena according to
some standard or relative position of alternatives
-The standard or benchmark must have a level of general acceptance
Economic Variables (Tools of Economic Analysis & Economic Variables) - Answer -An
economically relevant phenomenon whose value or magnitude may vary
Ex: Prices, costs, income, quantities, etc.
-Can be measured along a scale, once appropriate units of measurement have been
chosen
Ex:Cents, dollars per unit, # of patient visits, # of hospital beds, etc.
,Graphic Analysis (Tools of Economic Analysis & Economic Variables) - Answer -
Purpose is to illustrate relations between economic variables
Models (Tools of Economic Analysis & Economic Variables) - Answer -Allow drawing
inferences about the relations expected to occur when specific underlying conditions are
present
Noncausal Relations (Relations Between Variables) - Answer -One variable does not
cause a change in another variable
Casual Relations (Relations Between Variables) - Answer -When one economic
variable changes, the value of a second economic variable also changes as a result
Slope of Relations of Variables - Answer -The slope of a geometric relation shows how
much of a change in one variable is associated with a given change in a related variable
-The slope can be expressed as the magnitude or sensitivity of response
-When the relation is linear, the slope remains constant at every point on the line
Position of Relations - Answer -The relation between variables can have similar slopes
but different positions
Shape of Relations: Nonlinear - Answer -In nonlinear relations, the magnitude of the
response varies along the curve
-Businesses have fixed costs and variables costs that react differently to the level of
output produced
-An organization may also have declining slopes with increased production
Nature of Propositions - Answer -Attempts to spell out consequences of certain
conditions using "if ... then" forms
-The "If" - Conditions or assumptions
-The "Then" - Conclusions, implications or predictions
Example: IF: conditions x, y and z hold, THEN: as a consequence, phenomenon q will
occur
Explanatory Economics: implications are tested against actual data to see if the
prediction actually does occur
Evaluative Economics: actual data is compared against an ideal set of events
Descriptive Elements in Study of Healthcare - Answer --Identify the phenomena of
concern
-Define the phenomena to know their nature precisely
-Measure the phenomena to obtain understanding of their magnitude
Approach 1: Identifying Healthcare System Factors - Answer -Examine factors that
directly influence health
, -Lifestyle elements: diet, sleep, smoking, and other individual behaviors
-Social determinants: income, job, family, community
-Environmental factors: air and water purity
-Genetic factors
-Medical care: preventative services and treatment interventions
Approach 2: Identifying Healthcare System Factors - Answer -Identify the impact that
medical care has on the health status of an individual or society
-How much "health" is being produced with the medical care?
-What improvements in health is medical care supposed to produce?
***These are difficult questions to adress
Medical Care: Basic Process - Answer -Inputs - Instructions, doctors, supplies, pharma,
etc.
YIELDS
Outputs - Medical outcome
Issues with Measuring Output of Healthcare - Answer -The measure should be how
much improvement in health is being produced with medical care
-Volume of medical care provided (e.g., # of patients seen) is not necessarily a good
indicator of the benefits provided by the healthcare system
-Not every patient is identical to the next
-The medical care input for one patient is not identical to the next
Issues with Measuring Quality in Healthcare - Answer -Differing characteristics of
provider organizations
-Structure: amount and type of training of professionals, type of medical equipment
used, techniques (CT vs. X-ray) used
-Process: incorporates what is actually done in provision of care and receipt of care
Institute of Medicine (Medical Care: Measuring Outcomes) - Answer -Quality is the
degree to which healthcare services effects the desired health outcomes of the
individual or population
-Quality healthcare is: "safe, effective, patient-centered, timely, efficient, and equitable"
Medical Care: Measuring Outcomes - Answer -The measure of outcomes deals with
the accuracy of diagnoses and the effectiveness of treatments in producing changes in
health status
Some measures commonly used:
-Hospital mortality rates adjusted for patient condition,
-Rates of adverse events in hospitals
-The reduction in influenza because of immunizations
