MHA 710 - Healthcare Economics - Exam 3 with

MHA 710 - Healthcare Economics - Exam 3 with Complete Solutions 2024 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.

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.Physicians who own their own diagnostic testing facilities tend to order more tests, charge higher 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.

Which of the following statements is true concerning the trend in community hospital care between inpatient and outpatient services since the mid-1980s? 1 / 3

• 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.
• Outpatient services have been growing, while inpatient services have been declining.
• Outpatient services have been declining, while inpatient services have been growing. - Correct Answer
• Outpatient services have been growing, while inpatient services have been declining.

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.

Compared to the not-for-profit organizational form, the for-profit environment

• allows for the transfer of assets.
• lacks a profit motive.
• gives shareholders higher returns on their investment
• provides patients with higher quality of care.
• does not provide charity care. - Correct Answer a. allows for the transfer of assets.

What is the most significant cost of attending medical school?

• Books and incidentals
• Room and board
• Tuition and fees
• The income foregone - Correct Answer d. The income foregone

Using the physician-control model to explain hospital behavior leads to which of the following conclusions? 2 / 3

• Other medical inputs tend to be overused to maximize physicians' productivity.
• All investment decisions will be based on optimal resource use.
• The use of operating rooms will be maximized with little excess capacity.
• Physicians will strive to use the nursing staff efficiently. - Correct Answer a. Other medical inputs tend

to be overused to maximize physicians' productivity.

Economies of scale exist when:

• long-run average costs decline as output increases.
• long-run average costs increase as output increases.
• long-run average costs are constant.
• short-run average costs decline.
• short-run average costs increase. - Correct Answer a. long-run average costs decline as output

increases.Which of the following statements about the distribution of physicians among specialties is true in the United States?

• There are twice as many generalists as there are specialists.
• The majority of physicians specialize in general/family practice.
• There are twice as many specialists as there are generalists.
• The specialty distribution in the United States is similar to that of the rest of the world. - Correct

Answer c. There are twice as many specialists as there are generalists.Starting salaries for female obstetricians/gynecologists are higher than those of male obstetricians/gynecologists . What is the best explanation for this?

• There are more males in obstetrics/gynecology residency programs than females.
• The demand for female obstetricians/gynecologists is greater than the demand for male

obstetricians/gynecologists .

• The demand for female obstetricians/gynecologists is less than the demand for male

obstetricians/gynecologists .

• Female obstetricians/gynecologists have more human capital than male obstetricians/gynecologists . -

Correct Answer b. The demand for female obstetricians/gynecologists is greater than the demand for male obstetricians/gynecologists .

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