Question 1

Which of the following statements about the DRG payment system is not correct?
DRG payment system

Accepted Answer

A)  was instituted to stem the cost escalation incentive caused by cost reimbursement type payments to hospitals. 
B)  is an alternative to per diem, capitation or payment via global budgeting. 
C)  is assessed using patient discharge diagnoses. 
D)  is a system of administered prices initiated by the government, but which creates a public good since other insurance companies adopt the DRG system. 
E)  uses the same reimbursement rates within each diagnostically related group for all hospitals in the country. 
A)  was instituted to stem the cost escalation incentive caused by cost reimbursement type payments to hospitals. 
B)  is an alternative to per diem, capitation or payment via global budgeting. 
C)  is assessed using patient discharge diagnoses. 
D)  is a system of administered prices initiated by the government, but which creates a public good since other insurance companies adopt the DRG system. 
E)  uses the same reimbursement rates within each diagnostically related group for all hospitals in the country. E

Question 2

A for-profit hospital is more likely to specialize in which one of the following services?

Accepted Answer

A)  immunizations 
B)  diagnostic radiology 
C)  prenatal care 
D)  emergency rooms 
E)  drug detoxification 
A)  immunizations 
B)  diagnostic radiology 
C)  prenatal care 
D)  emergency rooms 
E)  drug detoxification B

Question 3

Utilization reviews by a nurse or doctor who report to a managed care organization mean

Accepted Answer

A)  managed care organizations (MCOs) analyze individual hospital stays to effectively check the charges and services of hospitals and physicians once a patient is admitted for care. 
B)  managed care organizations are inefficient. 
C)  managed care organizations encourage hospitals to extend the number of days a patient is in the hospital. 
D)  managed care organizations fail to explain why some individuals are outliers in terms of cost and services provided. 
E)  physicians are happy to provide extra service at no cost to hospitals. 
A)  managed care organizations (MCOs) analyze individual hospital stays to effectively check the charges and services of hospitals and physicians once a patient is admitted for care. 
B)  managed care organizations are inefficient. 
C)  managed care organizations encourage hospitals to extend the number of days a patient is in the hospital. 
D)  managed care organizations fail to explain why some individuals are outliers in terms of cost and services provided. 
E)  physicians are happy to provide extra service at no cost to hospitals. A

Question 4

The major problem with using the ratio of cost to charges applied to charges (RCCAC) method of hospital payment was

Accepted Answer

A)  hospitals were often forced to shift costs, after applying the formula, to recover costs of charity and other unreimbursed care. 
B)  it was not effective in recovering all costs from all payers. 
C)  hospitals were unable to collect payments from Medicare. 
D)  hospitals experienced shorter hospital length of stay and could not recover their costs. 
E)  hospitals made no provision for research and development activities. 
A)  hospitals were often forced to shift costs, after applying the formula, to recover costs of charity and other unreimbursed care. 
B)  it was not effective in recovering all costs from all payers. 
C)  hospitals were unable to collect payments from Medicare. 
D)  hospitals experienced shorter hospital length of stay and could not recover their costs. 
E)  hospitals made no provision for research and development activities.

Question 5

The idea that hospital competition has led to a "medical arms race" can help explain why the U.S. has more than twice the OECD average number of MRI machines per 1,000,000 population.

Accepted Answer

A) True 
 B)False

Question 6

Discuss the role of physicians in a hospital's revenue and cost flows. How do physicians contribute to a hospital's revenues? How do physicians contribute to a hospital's costs?

Accepted Answer

To the extent physicians refer patients

Question 7

Since the implementation of hospital payment by the DRG system,

Accepted Answer

A)  cost shifting no longer occurs in hospitals. 
B)  use of RCCAC serves no purpose to the hospital's management. 
C)  payment for hospital stays is based on a patient's diagnosis at discharge. 
D)  payment for hospital stays is based on a patient's diagnosis upon admittance to the hospital. 
E)  payment for hospital stays is less profitable to hospitals. 
A)  cost shifting no longer occurs in hospitals. 
B)  use of RCCAC serves no purpose to the hospital's management. 
C)  payment for hospital stays is based on a patient's diagnosis at discharge. 
D)  payment for hospital stays is based on a patient's diagnosis upon admittance to the hospital. 
E)  payment for hospital stays is less profitable to hospitals.

Question 8

Define the terms "hospital charges" and "hospital reimbursement." Please explain why both might be misleading to the uninformed or casual reader.

Accepted Answer

Hospital charges are just the amount tha

Question 9

Discuss Joseph Newhouse's theory that hospitals are run for managers. Does Newhouse's theory supplant Mark Pauly's theory of the hospital as the physicians' workshop?

Accepted Answer

To the extent that managers in nonprofit

Question 10

XYZ hospital is paid on the basis of the RCCAC method. XYZ has total costs of $8 million, total charges of $12 million, and charges to Blue Cross of $6 million. We expect Blue Cross to pay

Accepted Answer

A)  $6 million. 
B)  $2 million. 
C)  $4 million. 
D)  $8 million. 
E)  $10 million. 
A)  $6 million. 
B)  $2 million. 
C)  $4 million. 
D)  $8 million. 
E)  $10 million.

Question 11

Adjustments to each individual hospital's DRG payments are made

Accepted Answer

A)  to encourage hospitals to release patients sooner rather than later. 
B)  rarely. 
C)  to reimburse hospitals for patients who are high cost outliers. 
D)  to increase payment to hospitals for patients who die while hospitalized. 
E)  never. 
A)  to encourage hospitals to release patients sooner rather than later. 
B)  rarely. 
C)  to reimburse hospitals for patients who are high cost outliers. 
D)  to increase payment to hospitals for patients who die while hospitalized. 
E)  never.

Question 12

A typical complaint by employees, patients, and administrators at hospitals with a fixed budget is that they have too little input in the decisions about the annual allocations of the budgeted amount of funds received by the hospital.

Accepted Answer

A) True 
 B)False

Question 13

Explain how cost shifting has led to cream skimming. Be sure to give a definition of both terms. Explain how the emergence of specialty hospitals like cardiac care hospitals may jeopardize revenues to traditional full service hospitals if specialty hospitals take only the most profitable patients.

Accepted Answer

Cost shifting is the practice of letting

Question 14

If it is shown that a newly formed large hospital, which was formed by the merger of two competing hospitals, charges more to uninsured patients than do smaller hospitals in the same market, for providing the same services,

Accepted Answer

A)  the large hospital may have market power to do so. 
B)  the two small hospitals must be taking advantage of the economies of scale. 
C)  it is an example of price discrimination. 
D)  consumers' welfare would not be affected. 
E)  the large hospital must be violating the antitrust laws. 
A)  the large hospital may have market power to do so. 
B)  the two small hospitals must be taking advantage of the economies of scale. 
C)  it is an example of price discrimination. 
D)  consumers' welfare would not be affected. 
E)  the large hospital must be violating the antitrust laws.

Question 15

Hospital funding has switched from patient dominated to charity to third party payments, in that chronological order, through the 20th century.

Accepted Answer

A) True 
 B)False

Question 16

Over half of all hospital revenues are from

Accepted Answer

A)  federal and state government programs. 
B)  private insurance. 
C)  Medicare. 
D)  Medicaid. 
E)  philanthropy. 
A)  federal and state government programs. 
B)  private insurance. 
C)  Medicare. 
D)  Medicaid. 
E)  philanthropy.

Question 17

A proposal to eliminate the tax deduction for charitable contributions would cause a negative impact on

Accepted Answer

A)  physicians' salaries. 
B)  the number of patients paying out of pocket for cosmetic surgery. 
C)  the number of self pay hospital patients. 
D)  hospitals budget for philanthropic donations. 
E)  nurses duties. 
A)  physicians' salaries. 
B)  the number of patients paying out of pocket for cosmetic surgery. 
C)  the number of self pay hospital patients. 
D)  hospitals budget for philanthropic donations. 
E)  nurses duties.

Question 18

Cost shifting is a hospital's only means for funding research.

Accepted Answer

A) True 
 B)False

Question 19

One of the major determinants of any particular hospital's efficiency is whether the hospital is for-profit or non-profit.

Accepted Answer

A) True 
 B)False

Question 20

Economists seem to favor which one of the listed below theories of hospital behavior as the most accurate?

Accepted Answer

A)  Mark Pauly's model of a hospital as a physician workshop. 
B)  Joseph Newhouse's theory about hospitals being run for the benefit of their managers. 
C)  Traditional model of the firm/hospital as a profit maximizing entity. 
D)  AMA definition that asserts that hospitals exist to maximize community benefits. 
E)  There is no universally "correct" theory, as each of the theories listed above can explain the behavior of at least some of the hospitals quite well, while not necessarily being applicable to absolutely all the hospitals in the U.S. 
A)  Mark Pauly's model of a hospital as a physician workshop. 
B)  Joseph Newhouse's theory about hospitals being run for the benefit of their managers. 
C)  Traditional model of the firm/hospital as a profit maximizing entity. 
D)  AMA definition that asserts that hospitals exist to maximize community benefits. 
E)  There is no universally "correct" theory, as each of the theories listed above can explain the behavior of at least some of the hospitals quite well, while not necessarily being applicable to absolutely all the hospitals in the U.S.

Which of the following statements about the DRG payment system is not correct? DRG payment system

A for-profit hospital is more likely to specialize in which one of the following services?

Utilization reviews by a nurse or doctor who report to a managed care organization mean

The major problem with using the ratio of cost to charges applied to charges (RCCAC) method of hospital payment was

The idea that hospital competition has led to a "medical arms race" can help explain why the U.S. has more than twice the OECD average number of MRI machines per 1,000,000 population.

Discuss the role of physicians in a hospital's revenue and cost flows. How do physicians contribute to a hospital's revenues? How do physicians contribute to a hospital's costs?

Since the implementation of hospital payment by the DRG system,

Define the terms "hospital charges" and "hospital reimbursement." Please explain why both might be misleading to the uninformed or casual reader.

Discuss Joseph Newhouse's theory that hospitals are run for managers. Does Newhouse's theory supplant Mark Pauly's theory of the hospital as the physicians' workshop?

XYZ hospital is paid on the basis of the RCCAC method. XYZ has total costs of $8 million, total charges of $12 million, and charges to Blue Cross of $6 million. We expect Blue Cross to pay

Adjustments to each individual hospital's DRG payments are made

A typical complaint by employees, patients, and administrators at hospitals with a fixed budget is that they have too little input in the decisions about the annual allocations of the budgeted amount of funds received by the hospital.

Explain how cost shifting has led to cream skimming. Be sure to give a definition of both terms. Explain how the emergence of specialty hospitals like cardiac care hospitals may jeopardize revenues to traditional full service hospitals if specialty hospitals take only the most profitable patients.

If it is shown that a newly formed large hospital, which was formed by the merger of two competing hospitals, charges more to uninsured patients than do smaller hospitals in the same market, for providing the same services,

Hospital funding has switched from patient dominated to charity to third party payments, in that chronological order, through the 20^th century.

Over half of all hospital revenues are from

A proposal to eliminate the tax deduction for charitable contributions would cause a negative impact on

Cost shifting is a hospital's only means for funding research.

One of the major determinants of any particular hospital's efficiency is whether the hospital is for-profit or non-profit.

Economists seem to favor which one of the listed below theories of hospital behavior as the most accurate?

Choices: Money, Medicine, and Health

Demand and Supply

Cost-Benefit and Cost-Effectiveness Analysis

Health Insurance: Financing Medical Care

Insurance Contracts and Managed Care

Physicians

Medical Education, Organization, and Business Practices

Management and Regulations of Hospital Costs

Long-Term Care

Pharmaceuticals

Financing and Ownership of Health Care Providers

Macroeconomics and Medical Care

The Role of Government and Public Goods

History, Demography, and the Growth of Modern Medicine

International Comparisons of Health and Health Expenditures

Economic Evaluation of Health Policy: The Patient Protection and Affordable Care Act of 2010

Value for Money in the Future of Health Care

Filters

Exam 8: Hospitals

Which of the following statements about the DRG payment system is not correct? DRG payment system

A for-profit hospital is more likely to specialize in which one of the following services?

Utilization reviews by a nurse or doctor who report to a managed care organization mean

The major problem with using the ratio of cost to charges applied to charges (RCCAC) method of hospital payment was

The idea that hospital competition has led to a "medical arms race" can help explain why the U.S. has more than twice the OECD average number of MRI machines per 1,000,000 population.

Discuss the role of physicians in a hospital's revenue and cost flows. How do physicians contribute to a hospital's revenues? How do physicians contribute to a hospital's costs?

Since the implementation of hospital payment by the DRG system,

Define the terms "hospital charges" and "hospital reimbursement." Please explain why both might be misleading to the uninformed or casual reader.

Discuss Joseph Newhouse's theory that hospitals are run for managers. Does Newhouse's theory supplant Mark Pauly's theory of the hospital as the physicians' workshop?

XYZ hospital is paid on the basis of the RCCAC method. XYZ has total costs of $8 million, total charges of $12 million, and charges to Blue Cross of $6 million. We expect Blue Cross to pay

Adjustments to each individual hospital's DRG payments are made

A typical complaint by employees, patients, and administrators at hospitals with a fixed budget is that they have too little input in the decisions about the annual allocations of the budgeted amount of funds received by the hospital.

Explain how cost shifting has led to cream skimming. Be sure to give a definition of both terms. Explain how the emergence of specialty hospitals like cardiac care hospitals may jeopardize revenues to traditional full service hospitals if specialty hospitals take only the most profitable patients.

If it is shown that a newly formed large hospital, which was formed by the merger of two competing hospitals, charges more to uninsured patients than do smaller hospitals in the same market, for providing the same services,

Hospital funding has switched from patient dominated to charity to third party payments, in that chronological order, through the 20th century.

Over half of all hospital revenues are from

A proposal to eliminate the tax deduction for charitable contributions would cause a negative impact on

Cost shifting is a hospital's only means for funding research.

One of the major determinants of any particular hospital's efficiency is whether the hospital is for-profit or non-profit.

Economists seem to favor which one of the listed below theories of hospital behavior as the most accurate?

Choices: Money, Medicine, and Health

Demand and Supply

Cost-Benefit and Cost-Effectiveness Analysis

Health Insurance: Financing Medical Care

Insurance Contracts and Managed Care

Physicians

Medical Education, Organization, and Business Practices

Management and Regulations of Hospital Costs

Long-Term Care

Pharmaceuticals

Financing and Ownership of Health Care Providers

Macroeconomics and Medical Care

The Role of Government and Public Goods

History, Demography, and the Growth of Modern Medicine

International Comparisons of Health and Health Expenditures

Economic Evaluation of Health Policy: The Patient Protection and Affordable Care Act of 2010

Value for Money in the Future of Health Care

Filters

Hospital funding has switched from patient dominated to charity to third party payments, in that chronological order, through the 20^th century.