QUESTION 1

It could be argued that the federal and state governments provide an implicit guarantee of hospital borrowings because revenue from Medicare and Medicaid patients is assumed to be guaranteed.
True
False
1 points
QUESTION 2

During the Information Age, the first records of mortality, disease occurrence, and scientific effectiveness were documented in Paris clinics.
True
False
1 points
QUESTION 3

Rising costs and declining consumer satisfaction are the keys to defining the system as broken.
True
False
1 points
QUESTION 4

According to the text, medical care expenditures increased from the Agricultural Age to the Industrial Age. At the end of the Agricultural Age, almost all expenditures on health care were driven by the 2% of the population that was wealthy. Greater equality of income and wealth distribution in the Industrial Age helped support the increase in medical expenditures.
True
False
1 points
QUESTION 5

Choices based on marginal, rather than average, benefits and costs will tend to overproduce medical services.
True
False
1 points
QUESTION 6

Technology such as aquaculture, in which food sources are farmed from water resources, was never anticipated in the Malthusian Hypothesis.
True
False
1 points
QUESTION 7

The U.S. government subsidizes the private provision of health insurance through employers. Benefits paid to employees are deductible as expenses by firms but not recognized as taxable income by employees. Consider two employees, Ann and Bob, who both receive $12,000 in insurance benefits for their family. Ann earns $30,000 and pays 15% in taxes. Bob earns $75,000 and pays 25% in taxes. The tax subsidy to Bob is:
a.
The same as the tax subsidy to Ann
b.
Twice as large as the tax subsidy to Ann
c.
Half as much as the tax subsidy to Ann
d.
$1,200 more than the subsidy to Ann
e.
$1,000 more than the subsidy to Ann
1 points
QUESTION 8

Immigration is simply a movement of people from one country to another, so population growth rates exclude immigration on a world-wide basis.
True
False
1 points
QUESTION 9

A problem with the Jones-Lee Approach to estimating Value of Life is that

scientists really cannot make an acceptable estimate of the risk of death.

the value of time for a group of individuals varies enormously, and the Jones-Lee Approach makes no provision for this.

the mean value of time used in the calculation for a group of individuals demeans the value of those who do not work, such as the elderly, children or those in institutions.

selection bias. The method only measures the actions of those who undertake a risky action.

all of the above.
1 points
QUESTION 10

When Allegheny Hospital System (AHERF) went bankrupt, the price of borrowing for all hospitals increased. This is an example of correlated system risk.
True
False
1 points
QUESTION 11

The importance of tracking the excess of growth in health expenditures over growth in GDP is that this “excess cost growth” number is represents the allocation of resources away from other goods and services and to health expenditures.
True
False
1 points
QUESTION 12

In the U.S., the key determinants of population growth have been the excess of increasing birth rate and declining death rates.
True
False
1 points
QUESTION 13

Population growth during the Demographic Transition to the Industrial Age is driven by declining mortality and increasing fertility.
True
False
1 points
QUESTION 14

Kaiser Health Plan is the only HMO in the U.S. to consistently maintain its core competencies. That is, it has kept client satisfaction high, while keeping the growth rate of premiums higher than the growth rate of medical costs.
True
False
1 points
QUESTION 15

Shareholders of the Allegheny General Hospital group violated the shareholder/investor agency relationship when illegal accounting practices were discovered in the late 1990s.
True
False
1 points
QUESTION 16

A sudden escalation in medical costs for treatment of ischemic heart disease would immediately:
a.
Benefit providers
b.
Be passed on to consumers
c.
Benefit insurance companies
d.
Decrease insurance company profits in the short term
e.
Decrease tax revenues to the federal government
1 points
QUESTION 17

The value of any capital project can be assessed by estimating expected cash flows and discounting to allow for the time value of money.
True
False
1 points
QUESTION 18

The role of health economists in the future will likely include a centralized evaluation board patterned after the NICE (National Institute for Clinical Effectiveness) in England and IQWIG in Germany. The influence of any recommendations will depend upon factors beyond the economic analysis.
True
False
1 points
QUESTION 19

Economists treat the increase in health expenditures in the U.S. as solely a trade off between costs of medical interventions and gains in life expectancy and costs for those interventions.
True
False
1 points
QUESTION 20

Development of financial institutions and effective medical technology are the only reasons Dr. Getzen gives as determinants of growth in the health care sector of the economy.
True
False
1 points
QUESTION 21

Demographic Transition during the Agricultural Age means high infant and child mortality is accompanied by high birth rates and population increases occur.
True
False
1 points
QUESTION 22

The Malthusian hypothesis:
a.
Assumes that land resources change over time
b.
Assumes that technology remains fixed
c.
Assumes that technology gains outpace population increases over the long run
d.
Proposes that population growth leads to falling labor productivity because land is a limited resource, so that increases in population result in less food for each person and more deaths
e.
Argues that population growth leads to increasing labor productivity because land is a fixed resource
1 points
QUESTION 23

Bill’s employer offers a new health insurance benefit which covers preventive and cosmetic dental services, including orthodontic care, for employees and their family members. If Bill knows his children need extensive orthodontic care, he will buy the policy. This is an example of moral hazard.
True
False
1 points
QUESTION 24

The necessary catalyst for development of social insurance programs for health care was the:
a.
Rise of the middle class in the Industrial Age
b.
Invention of HMOs in the Information Age
c.
Increased disparity in life expectancy between income classes
d.
Introduction of antibiotics
e.
The evolution of statistical methods in health care analysis.
1 points
QUESTION 25

Varying measures of benefits can result because the viewpoint of the party benefitting from a treatment varies.
True
False
1 points
QUESTION 26

One of the key contributions health economists make to any debate on medical care decisions is to force the questions which make clear the perspectives of each party involved: patient, provider, or payer.
True
False
1 points
QUESTION 27

Social insurance:
a.
Is useful for covering expenses related to common allergy treatments
b.
Is not found in the U.S.
c.
Would most likely provide more extensive coverage for dementia treatments than family or private savings
d.
Should cover preventive dental cleaning in adults
e.
Was first implemented in the U.K. after World War II
1 points
QUESTION 28

Physician office management solutions to reducing the escalation rate of health expenditures and improving patient satisfaction include MSAs, medical homes and concierge practices.
True
False
1 points
QUESTION 29

Insurance coverage of which treatment would likely cause the most problems with moral hazard?
a.
Emergency room services for sprained ankle
b.
Hip replacement surgery
c.
Family counseling
d.
Allergy medicine
e.
Antibiotics
1 points
QUESTION 30

Physicians generally focus on tradeoffs. Health care economists focus on maximizing benefits to society as a whole.
True
False
1 points
QUESTION 31

Economics is the science which studies how scarce resources are allocated among unlimited needs and wants. In health economics, allocation can be restated as distribution resources, the distribution of health, the distribution of medical care, and the distribution of provider incomes.
True
False
1 points
QUESTION 32

Not-for-profit hospitals differ from traditional corporations in that:
a.
A hospital may raise money for a capital building project from charitable social events
b.
A hospital may raise money from charitable organizations to fund everyday operating shortfalls
c.
A hospital may have a large endowment from previous benefactors
d.
A hospital is expected to provide a small, but significant portion of its services to patients who are unwilling or unable to pay for them
e.
All of the above
1 points
QUESTION 33

Choices based on marginal, rather than average, benefits and costs will tend to overproduce medical services.
True
False
1 points
QUESTION 34

The transition from Stone Age to Agricultural Age was characterized by changes in lifestyle from hunter-gatherer to farmers and resulted in increased life expectancy as the social structures of ancient civilizations such as the Sumerians, Greeks, and Romans provided stability and steady farm production.
True
False
1 points
QUESTION 35

During the Information Age, world population first exceeds one billion, and the Malthusian Hypothesis dominates thinking on population trends.
True
False
1 points
QUESTION 36

Issues in agency would be least likely to arise in:
a.
Sole proprietorships
b.
Partnerships with less than 3 partners
c.
Partnerships with 3 or more partners
d.
For-profit corporations
e.
Not-for-profit corporations
1 points
QUESTION 37

A company with 1,000 employees has the following experience this year:

25 hospitalizations at $5,600 each
24 births at $10,000 each
4.1 physician visits per employee at $60 per visit
2.4 prescriptions filled per employee at $25 per prescription
The actuarially fair premium is:

a.
Less than $500 per employee
b.
Greater than $1000 per employee
c.
Approximately $686 per employee
d.
Less than the load factor per employee
e.
The same as the load factor per employee
1 points
QUESTION 38

Cost-benefit analysis of a childhood immunization program is straight-forward analysis because the costs of the drugs are well known and the benefits to individual children are easy to calculate.
True
False
1 points
QUESTION 39

A kidney cancer drug, which delays cancer progression for six months at an estimated treatment cost of $54,000. There are no known side effects. This is a cost per Quality Adjusted Life Year (QALY) of

$54,000.

$27,000.

$13,500.

$108,000.

$67,500.
1 points
QUESTION 40

Dr. Chey works in a small group practice. If Dr. Chey dies, and the practice is owned by a for-profit hospital corporation:
a.
Replacing Dr. Chey will most likely be more burdensome than adding another partner to a t