MHA 710 - HEALTHCARE

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MHA 710 - HEALTHCARE

ECONOMICS - EXAM 3 WITH

COMPLETE SOLUTIONS

Question 1: In order to be a successful price

discriminator, a provider must have a degree of market power (depicted by a downward-sloping demand curve) and meet what other condition(s)?

• Customers cannot know that different prices are being

charged.

• Markets must be segmentable, identifying differences

in ability to pay.

• Demand for services must be relatively price elastic.
• Profitable service expansion opportunities must be

limited.

• The provider must have excess capacity to

accommodate the extra business.

CORRECT ANSWER: b. Markets must be

segmentable, identifying differences in ability to pay.

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Question 2: Legislation considered by Congress to restrict

legal immigration would:

• surprise many policymakers because Congress finds it

difficult to agree on much of anything regarding immigration.

• improve employment prospects for native-born

Americans.

• have little effect on medical markets, as so few

physicians practicing medicine in the United States are foreigners.

• raise the costs of operating in many of the nation's rural

and inner-city hospitals.

• allow more Americans trained abroad to compete for

openings in United States' residency programs.

CORRECT ANSWER: d. raise the costs of operating in

many of the nation's rural and inner-city hospitals.

Question 3: Physicians who own their own diagnostic

testing facilities tend to order more tests, charge higher

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fees for them, and have higher total bills to patients. This

practice of self-referral is an example of:

• cognitive dissonance.
• physician-induced demand.
• moral hazard.
• adverse selection.
• res ipsa loquitur.

CORRECT ANSWER: b. physician-induced demand.

Question 4: Which of the following statements is true

concerning the trend in community hospital care between inpatient and outpatient services since the mid-1980s?

• Both inpatient and outpatient services have been

declining.

• There has been no noticeable trend in either inpatient or

outpatient services.

• Both inpatient and outpatient services have been

growing.

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• Outpatient services have been growing, while inpatient

services have been declining.

• Outpatient services have been declining, while inpatient

services have been growing.

CORRECT ANSWER: d. Outpatient services have been

growing, while inpatient services have been declining.

Question 5: The amount that Medicare pays a hospital for

treating a Medicare patient is determined:

• at the point when the diagnosis is made.
• at the time of admission to the hospital.
• before the patient sees a physician.
• after the hospital bill is reviewed by Medicare auditors.
• after medical services are provided.

CORRECT ANSWER: a. at the point when the

diagnosis is made.