Health Economics
Final Exam Questions
Course Introduction
Health Economics explores the application of economic principles to the health care sector, focusing on how resources are allocated and utilized to maximize health outcomes. The course covers key topics such as the demand and supply of health care services, health insurance markets, the role of government in health care, cost-effectiveness analysis, and the evaluation of health policies. Students will also examine issues related to health care financing, provider incentives, and the impact of socioeconomic factors on health. Through real-world examples and case studies, the course prepares students to critically analyze health care systems and policy interventions from an economic perspective.
Recommended Textbook
Health Economics and Policy 5th Edition by
James W. Henderson
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14 Chapters
193 Verified Questions
193 Flashcards
Source URL: https://quizplus.com/study-set/3136 Page 2
Chapter 1: Usmedical Care: A System in Transition
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10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/62114
Sample Questions
Q1) The opportunity cost of investing in a new lithotripter (a machine that pulverizes kidney stones with sound waves) is
A)defined by the dollar cost of the equipment.
B)the same for every health care provider.
C)measured by the difference between the expected revenues from selling the services of the lithotripter and the invoice cost of the machine.
D)defined by the next best use of the money invested in the equipment.
E)impossible to calculate.
Answer: D
Q2) Self insurance refers to the practice of setting aside funds to pay for medical care expenses instead of paying premiums to an insurance company.Approximately, _______ of all employees who participate in group insurance plans work for firms that self-insure.
A)one-fourth
B)one-third
C)one-half
D)two-thirds
E)three-fourths
Answer: C
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3
Chapter 2: Using E Conomics to Study Health Care Issues
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18 Verified Questions
18 Flashcards
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Sample Questions
Q1) Which of the following will not cause a shift in the medical care supply curve?
A)a change in the cost of medical school tuition.
B)a change in the percentage of the population with health insurance.
C)an change in the amount of student aid available to promising undergraduate students studying biology.
D)A change in the number of high-profile medical malpractice lawsuits brought against physicians increasing the premiums on malpractice insurance.
E)A wave of union activity that increases the average salaries of nurses nationwide.
Answer: B
Q2) Within the framework of economics, optimization means providing a good or service until
A)total benefits are maximized.
B)total benefits and total costs are equal.
C)marginal benefits exceed marginal costs by the greatest amount possible.
D)marginal benefits and marginal costs are equal.
E)as long as total benefits are greater than total costs, any amount may be optimal under the right circumstances.
Answer: D
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4
Chapter 3: Analyzing Medical Care Markets
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18 Verified Questions
18 Flashcards
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Sample Questions
Q1) Which of the following results from providers having more information about treatment alternatives than their patients?
A)Principle-agent problem.
B)Rational ignorance.
C)Externalities.
D)Adverse selection.
E)The substitution effect.
Answer: A
Q2) When a physician knows more about alternative treatments than her patients, we say that _______ exists.
A)rational ignorance.
B)perfect information.
C)asymmetric information.
D)moral hazard.
E)adverse selection.
Answer: C
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Page 5
Chapter 4: Economic Evaluation in Health Care
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) The standard cut-off for cost per QALY is
A)equal to per capita income
B)2 times per capita income
C)3 times per capita income
D)4 times per capita income
E)5 times per capita income
Q2) Researchers use cost-of-illness studies to
A)study the burden of a disease
B)determine the low-cost option to treat a disease
C)compare two or more treatment options when the medical outcome is identical
D)increase public awareness of cost of treating certain diseases
E)All of the above
Q3) Researchers estimate QALYs in a number of different ways.One popular approach is called
A)the probability approach
B)the QoL approach
C)the standard gamble
D)the standard measure of well-being
E)the utility of life approach
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Page 6
Chapter 5: The De Mand for Health and Medical Care
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14 Verified Questions
14 Flashcards
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Sample Questions
Q1) Health care that actually harms the patient, such as an adverse reaction to a prescription drug is called
A)morbidity-related response.
B)defensive medicine.
C)adverse selection.
D)iatrogenic disease.
E)moral hazard.
Q2) A physician's ability to induce demand is greatly enhanced when
A)patients pay their own medical bills.
B)patients request follow-up visits.
C)patients have difficulty gathering and processing information.
D)the physician follows strict treatment guidelines.
E)treatment options are limited.
Q3) The number one cause of death in the United States among 25 to 44 year olds in 1998 was
A)AIDS.
B)adult-onset diabetes.
C)homicide and accidents.
D)suicide.
E)pneumonia and influenza.
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Chapter 6: The Market for Health Insurance
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19 Verified Questions
19 Flashcards
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Sample Questions
Q1) A prepaid hospital plan created by Baylor Hospital for a group of Dallas public school teachers in 1929 is considered the forerunner of what was later called
A)managed care.
B)Blue Cross.
C)Blue Shield.
D)the health maintenance organization.
E)major medical insurance.
Q2) Premiums based on experience ratings
A)are uniform across age groups.
B)are based on the loss experience of the insured.
C)vary depending on the income of the insured.
D)are illegal in most states in the U.S.
E)are only used in property-casualty insurance underwriting.
Q3) Firms self-insure to
A)save money on premiums.
B)avoid state level insurance regulation.
C)create uniform benefit packages for employees who live in different states.
D)all of the above.
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8
Chapter 7: Managed Care
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13 Verified Questions
13 Flashcards
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Sample Questions
Q1) Most empirical studies show that the cost-savings provided by managed care are accomplished by
A)better preventive care.
B)reducing the rate of hospitalization.
C)denying access to costly specialty care.
D)switching to generic drugs.
E)all of the above.
Q2) Capitation
A)creates pressures to provide fewer services.
B)is a fixed payment determined in advance to pay for all medically-necessary care.
C)is the maximum allowable fee in a fee-for-service system.
D)shifts financial risk onto patients.
E)Both a and b are correct.
Q3) Managed care
A)establishes a system of retrospective payment determined ex ante.
B)combines the responsibilities of payer and provider of medical services.
C)attempts to shift a portion of the financial risk onto providers.
D)attempts to shift a portion of the financial risk onto patients.
E)Both b and c are correct.
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Page 9
Chapter 8: The Physicians Servic ES Market
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17 Verified Questions
17 Flashcards
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Sample Questions
Q1) An important element in estimating the present value of an investment is the calculation of the discount factor.The discount factor may be expressed as _______ where r is the discount rate and n is the number of years the investment is held.
A)(1 + r)<sup>n</sup>
B)(1 + n)<sup>r</sup>
C)1/(1 + r)<sup>n</sup>
D)1/(1 + n)<sup>r</sup>
Q2) The observed variations in practice patterns in different regions of the country are difficult to eliminate
A)because of the many alternative treatment options available for most ailments. B)due to the localized nature of most medical practice.
C)because it is difficult to change the preferences of physicians and patients.
D)the observed variations are so minor that they are of little concern to policy makers. E)responses a, b, and c are all true.
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Chapter 9: The Hospital Services Market
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14 Verified Questions
14 Flashcards
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Sample Questions
Q1) Consolidation activity in the hospital industry
A)has slowed due to government regulations.
B)has created a large number of nationwide for-profit hospital chains.
C)has occurred almost exclusively at the local level.
D)occurs for reasons that are different from those that cause consolidation in other industries.
Q2) Which of the following statements is true concerning the trend in hospital care between in-patient and out-patient services since the mid-1980s?
A)Both have been declining.
B)Out-patient services have been growing while in-patient services have been declining.
C)Out-patient services have been declining while in-patient services have been growing.
D)Both have been growing.
E)There has been no noticeable trend in either in-patient or outpatient services.
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11
Chapter 10: The Market for Pharmaceuticals
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7 Verified Questions
7 Flashcards
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Sample Questions
Q1) What is the most important factor leading to rising health care costs in the United States since 1980?
A)The increased use of expensive medical technology.
B)The aging U.S.population.
C)The increased cost of malpractice insurance for providers.
D)Rising incomes for physicians.
E)The rising cost of pharmaceutical drugs.
Q2) One of the primary reasons that costly technology is being introduced into the health care system is
A)research scientists have successfully mapped the human genome.
B)high cost is synonymous with better outcomes.
C)third-party insurance finances most of the cost of care.
D)all of the above.
Q3) The best description of the technological imperative is as follows:
A)If the procedure is available, use it.
B)If the procedure is available, use it if it works.
C)If the procedure is available, use it no matter how much it costs.
D)If the procedure is available and used, use it even if the patient can not afford it.
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Chapter 11: Confounding Factors
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22 Verified Questions
22 Flashcards
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Sample Questions
Q1) The most recent studies of lifetime medical costs of treating AIDS
A)have shown a significant increase in the estimates due to earlier diagnosis.
B)have shown a significant increase due to the use of new drugs including protease inhibitors.
C)have been revised downward due to shorter and less frequent hospital stays.
D)conclude that costs will likely fall in the future die to breakthrough research in prevention.
E)all of the above.
Q2) One of the major functions of tort law is
A)the compensation of individuals who suffer accidental losses.
B)the compensation of victims of negligent behavior.
C)to stop all injurious behavior.
D)to reward successful trial lawyers.
E)all of the above.
Q3) The English rule of costs
A)applies only in England.
B)is the standard practice worldwide, except in the United States.
C)is a practice where the loser of a lawsuit pays all attorneys' fees and court costs.
D)results in more lawsuits filed.
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Page 13
Chapter 12: Policies That Enha Nce Access
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Falling hospital admissions and shorter length of hospital stays beginning in the mid 1980s may be attributable to
A)the increase in the number of out-patient visits.
B)the introduction of the DRG system.
C)a healthier population and a reduced incidence of certain diseases.
D)a reduction in the number of staffed beds in community hospitals causing a shortage of available beds.
E)an increase in the use of pharmaceutical drugs in treating the elderly.
Q2) Medicare and Medicaid were enacted by the Johnson administration in 1965 as amendments to which federal law already in existence?
A)Welfare Act of 1960.
B)Social Security Act.
C)Employee Retirement and Income Security Act.
D)Managed Care Act.
E)Equal Rights Act.
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Chapter 13: Policies to Contain Costs
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10 Verified Questions
10 Flashcards
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Sample Questions
Q1) Which of the following statements is true concerning DRGs?
A)Soon after their implementation in 1983, the average length of stay in U.S.hospitals fell significantly.
B)Hospital operating margins fell dramatically immediately after implementation of the program.
C)The system encourages over-treatment of elderly patients.
D)The system encourages physicians to over-diagnose, referred to as "DRG creep."
E)Both a and d are true.
Q2) Suppose a price ceiling is set below the current market price.If the goal of the price ceiling is to reduce total expenditures, it will be successful
A)if the percentage change is price is greater than the percentage change in quantity.
B)if the percentage change is price is less than the percentage change in quantity.
C)if the percentage change is price is equal to the percentage change in quantity.
D)under all circumstances.Price ceilings always lower total spending.
E)if the markets remains in equilibrium.
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15
Chapter 14: Medical Care Systems Worldwide
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11 Verified Questions
11 Flashcards
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Sample Questions
Q1) Which of the following statements is true about the Canadian health care system?
A)Many Canadians travel to the U.S.in order to receive expensive treatments.
B)Canadians have the option of purchasing private health insurance if they can afford it.
C)Canadian physicians are salaries employees of the provincial health plans.
D)Canadian hospitals have significant excess capacity that is used to treat patients from foreign countries.
E)Canadian physicians are allowed to "balance bill" patients for certain high-cost procedures.
Q2) The biggest challenge faced by the German health care system in the 1990s was
A)eliminating the long waiting lists for expensive medical services.
B)integrating East and West Germany into a single system.
C)controlling overall health care spending as a percentage of GDP.
D)how to control rising physicians' incomes in the name of social solidarity.
E)how to provide high-income Germans with an effective safety valve so they will continue to support the system with their taxes.
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