Deck 9: Market Competition in Medical Care

Question 1

Why didn't HMOs grow in the 1960s and 1970s?

A)They were relatively inefficient versus fee for service providers
B)There existed little demand for HMO services
C)State and county medical boards denied HMO access to hospitals
D)All of the above
E)None of the above

Answer 1

C
State and county medical boards would deny accreditation to hospitals that allowed physicians from HMO's to practice within the hospital.Therefore,HMO companies lost access to hospitals.

Question 2

Compare the quality difference in care between HMOs and traditional health insurance.

Answer 2

HMOs consistently performed better than non-HMO plans on providing preventive care,such as cancer screening.HMOs had a less favorable performance with elderly patients and those who were chronically ill.Generally patients in HMOs are less satisfied than non-HMO patients,although HMO enrollees are more satisfied with their lower premiums and out-of-pocket costs.Access to care measures,such as difficulty in getting an appointment,are also lower in HMO plans.

Question 3

________ enrollees are the _______ price-sensitive,and they continue to purchase plans with the ______ premiums

A)FFS;most;highest
B)FFS;least;highest
C)HMO;most;highest
D)HMO;least;lowest

Answer 3

B
FFS enrollees are the least price-sensitive,and they continue to purchase plans with premiums.

Question 4

Which of the following is not true about health insurance?

A)Has driven up the cost of health care.
B)Creates a moral hazard problem for many people.
C)Makes demand for health care more elastic.
D)Is a means of dealing with the uncertainty that surrounds health care.

Question 5

Which of the following reduce price competition?

A)Hospital consolidation
B)Price regulation
C)State regulation
D)None of the above
E)All of the above

Question 6

What does the RAND HMO experiment conclude about the differences in FFS and HMO hospital admissions?

A)HMOs are more risk selective than FFS
B)HMOs are less risk selective than FFS
C)HMOs provide a better incentive to reduce admission rates than FFS
D)HMOs provide a better incentive to increase admission rates than FFS.

Question 7

__________ place the incentive to reduce cost on the __________

A)PPO;provider
B)POS;provider
C)FFS;provider
D)PPO;consumer

Question 8

Certificate of Need

A)Forced hospitals to gain government approval before commencing capital improvements
B)Caused medical care expenditures to increase
C)Both a and b
D)Neither a nor b

Question 9

Since 1975,which type of health insurance had the greatest increase in expenditures?

A)Medicare
B)Medicaid
C)Private insurance
D)All grew by the same amount

Question 10

Health insurance providers in order of increasing management are

A)FFS,PPO,HMO
B)PPO,FFS,HMO
C)FFS,HMO,PPO
D)PPO,HMO,FFS

Question 11

The failure of capitation payments is due to

A)Providers' inability to access risk
B)Providers' inability;risk-adjustment claims to insurers
C)Conflict with respect to the method;specialists of payment between primary care physicians and specialist.
D)All of the above
E)None of the above

Question 12

Explain how the lack of information to patients about plans and physicians leads to more market distortions.

Question 13

Insurance plans that seek to reduce the moral hazard problem include

A)HMOs
B)Low co-insurance rate plan
C)Both a and b
D)Neither a nor b

Question 14

The increased supply of physicians was most aided by

A)The increased use of health insurance
B)The Health Professions Educational Assistance Act (HPEA)
C)The immigration of foreign medical graduates
D)The rise in physician incomes

Question 15

What does the Rand HMO experiment tell us about the effect of HMOs on hospitalized utilization?

Question 16

Explain how the new payment system for hospitals instituted by the National Health Services of Britain affected hospital stay length,expenditures,and mortality.

Question 17

Describe the advantages and disadvantages of capitation payments.

Question 18

Tax exemption of health insurance leads to _________ market distortion._________ health insurance choices leads to _________ market distortion.

A)More;More;more
B)More;More;less
C)Less;Less;less
D)More;More;more
E)None of the above

Question 19

Which of the following policies was not a cost-containment policy?

A)Increasing the Medicare payroll tax
B)Using price controls
C)Mandating the use of Certificate of Need (CON)on hospital capital
D)Decreasing physician reimbursement
E)All of the above

Question 20

Which reimbursement mechanisms encourage over-servicing by doctors?

A)Fee For Service
B)Capitation
C)Neither a nor b
D)Both a and b