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Health Economic and financing

1) Over the past 100 years, out of pocket expenditures for health care services by individuals have decreased for 50% to less than 10%.

3) Ranking everyone by the amount spent on medical care, 70 percent of the total (all expenditures for all people) is accounted for by the top 10 percent of patients. This phenomenon is called cost shifting.

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5) The Flow of Funds idea emphasizes that total dollars spent by individuals, government and other third party payers for health care must equal total income earned by health care providers, administrators and other health care workers.

7) Socioeconomic differences in mortality found in the U.S. are most likely attributable to lack of universal health insurance coverage.

9) A hospital system is rewarded with higher profits in the short term when it implements electronic health records which increase the timeliness of physician and patient communication.

Multiple Choice

11) In which of the following examples does the fundamental theorem of exchange not apply?

a) You pay your optometrist $500 for a new pair of eyeglasses.

b) You donate your old, used eyeglasses to the Lions Club, a charitable organization which recycles and distributes the glasses to needy people.

c) You pay a fertility specialist $10,000 to perform In Vitro Fertilization procedure which does not result in pregnancy.

d) You pay a fertility specialist $10,000 to perform In Vitro Fertilization procedure which results in pregnancy.

e) Unknown to you, your neighbor is tapping into your cable TV service and sharing your service.

13) Buying a hip replacement surgery is different from the assumptions of a purchase in the perfectly competitive market because

a) the seller has an ethical duty to care for you.

b) all buyers are price makers.

c) product characteristics do not vary significantly across providers.

d) information is freely available about surgeons specializing in hip replacements.

e) obtaining Board Certification in Orthopedic Surgery is a relatively quick and uncomplicated procedure.

13) Buying a hip replacement surgery is different from the assumptions of a purchase in the perfectly competitive market because

a) the seller has an ethical duty to care for you.

b) all buyers are price makers.

c) product characteristics do not vary significantly across providers.

d) information is freely available about surgeons specializing in hip replacements.

e) obtaining Board Certification in Orthopedic Surgery is a relatively quick and uncomplicated procedure.

15) Which of the following statements is false? Significant increase in healthcare spending over the past seventy years can in part be explained by the

a) increase in the cost of labor-intensive services.

b) increase in the overall level of medical care prices.

c) increase in intensity and quality of care.

d) increase in the share of the healthcare costs spent on manufactured goods such as drugs.

e) population growth.

17) Scarcity means

a) time and resources spent researching a cure for breast cancer are time and resources that could have been spent researching cures for lymphoma.

b) 25 year olds might be more willing to start a family than 35 year olds.

c) government funding of federal programs equals the amount paid in taxes.

d) all consumers are assumed to have limited financial resources.

e) money flows in a circle.

19) Firms apply marginal analysis to maximize the following production goal:

a) demand.

b) profit.

c) output.

d) prices.

e) total revenue.

21) Investments in human capital include all the following except

a) attending college.

b) saving money for college.

c) exercising.

d) maintaining a healthy weight.

e) immunizing children against diseases.

23) Which of the following statements about the concept of “rationality” is false?

a) Rationality means that people make choices to make themselves better off subject to resource constraints.

b) Rationality means that organizations make choices to meet their objectives (maximize profits, minimize cost, get elected).

c) People and organizations are always perfectly rational in their decisions.

d) Purchasing life insurance to minimize the risk of financial problems for your family is an example of a rational decision.

e) Rationality is a concept that organizes and guides economic analysis, but may sometimes miss the human meaning of transactions in healthcare markets.

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