Question 1

Which of the following reasons might explain why expenditures on physician services have increased?&#10;A) Increased utilization&#10;B) Increased practice costs&#10;C) Increased physician incomes&#10;D) All of the above&#10;E) None of the above

Accepted Answer

Increased utilization (more people seeking services), increased practice costs (costs to run a physician's practice have gone up), and increased physician incomes (doctors are earning more money for their services) can all contribute to an increase in expenditures on physician services.

Question 2

Traditional fee-for-service payment mechanisms provide incentives to over utilize medical care.

Accepted Answer

Traditional fee-for-service payment models do not reward providers for delivering high-quality care or for controlling costs, and instead often incentivize overutilization of medical services to generate more revenue.

Question 3

Which of the following exemplifies the principal-agent theory within medical care?&#10;A) The doctor-patient relationship&#10;B) The doctor-payer relationship&#10;C) The patient-payer relationship&#10;D) Both a and c&#10;E) All of the above

Accepted Answer

The principal-agent theory in medical care can be seen in all the given relationships. In the doctor-patient relationship, the doctor (agent) acts on behalf of the patient (principal) to provide the best care possible. In the doctor-payer relationship, the doctor acts as an agent for the payer (insurance companies, governments, etc.), providing services within the constraints of the payer's policies. In the patient-payer relationship, the payer acts as an agent for the patient, negotiating and paying for services on their behalf.

Question 4

Using a staff-model HMO, if there is an increase in the wages of physicians, how would the HMO likely respond to provide its current level of medical care?&#10;A) Increase the number of physicians and decrease the number of physician extenders utilized.&#10;B) Decrease the number of physicians and decrease the number of physician extenders utilized.&#10;C) Increase the number of physicians and increase the number of physician extenders utilized.&#10;D) Decrease the number of physicians and increase the number of physician extenders utilized.&#10;E) None of the above

Accepted Answer

In order to maintain its current level of medical care, the HMO would likely respond to an increase in physician wages by decreasing the number of physicians and increasing the number of physician extenders utilized. Physician extenders, such as nurse practitioners and physician assistants, can provide many of the same services as physicians but are typically paid less. By increasing the use of physician extenders, the HMO can offset the higher costs of physician wages while still maintaining its level of medical care.

Question 5

Over the past thirty years, the absolute number of active primary care physicians has _______ while the proportion of active primary care physicians has _______.&#10;A) decreased; decreased&#10;B) decreased; increased&#10;C) increased; remained stable&#10;D) increased; increased&#10;E) increased; decreased

Accepted Answer

The absolute number of active primary care physicians has increased due to overall growth in the medical field and population needs. However, the proportion of active primary care physicians compared to specialists has decreased as more doctors specialize.

Question 6

Over the past thirty years, the absolute number of physicians has _______ while the physician-to-population ratio has _______.&#10;A) decreased; decreased&#10;B) decreased; increased&#10;C) increased; remained stable&#10;D) increased; increased&#10;E) increased; decreased

Accepted Answer

Over the past thirty years, the absolute number of physicians has increased due to factors like population growth and medical advancements. Consequently, the physician-to-population ratio has also increased as the growth in the number of physicians has outpaced population growth.

Question 7

The _______ suggests that per capita variations in the use of medical care are due to variations in clinical opinions regarding the appropriate amount and type of medical care.&#10;A) physician practice hypothesis&#10;B) supplier-induced demand hypothesis&#10;C) enthusiasm hypothesis&#10;D) principal-agent hypothesis&#10;E) small area variation hypothesis

Accepted Answer

The answer of The _______ suggests that per capita variations...

Question 8

If all statutes limiting the roles of physician assistants were lifted, the level of competition in the physician services market would decrease.

Accepted Answer

If all statutes limiting the roles of physician assistants were lifted, it would increase the number of healthcare providers in the market, leading to greater competition. This would likely result in greater quality and lower costs for patients.

Question 9

What are the two primary goals of the malpractice system?&#10;A) Reduce the number of claims and deter negligence&#10;B) Compensate victims and deter negligence&#10;C) Reduce the number of claims and limit the size of awards&#10;D) Increase the number of claims and compensate victims&#10;E) none of the above

Accepted Answer

The two primary goals of the malpractice system are to compensate victims of negligence and to deter negligence in the future. Option B accurately describes these goals. Option A is incorrect because reducing the number of claims is not a primary goal, but rather a potential secondary goal. Option C is incorrect because limiting the size of awards is not a primary goal of the system, but rather a means to achieve the primary goal of compensating victims. Option D is incorrect because increasing the number of claims is not a goal of the system, but rather a potential outcome of improved patient education and awareness about malpractice rights.

Question 10

The _______ suggests that per capita variations in the use of medical care are due to variations in physician preference for particular medical procedures.&#10;A) physician practice hypothesis&#10;B) supplier-induced demand hypothesis&#10;C) enthusiasm hypothesis&#10;D) principal-agent hypothesis&#10;E) small area variation hypothesis

Accepted Answer

The enthusiasm hypothesis suggests that differences in how often medical procedures are used can be attributed to individual physicians' preferences or enthusiasm for those procedures.

Question 11

Which of the following payment mechanisms provides the greatest incentive to over utilize medical care?&#10;A) Fee-for-service&#10;B) Fixed Salary&#10;C) Capitation&#10;D) Pay-for-performance&#10;E) Price controls

Accepted Answer

The answer of Which of the following payment mechanisms provides...

Question 12

_______ refers to the exploitation of asymmetric information to increase demand for physician services.&#10;A) Physician inflation rate&#10;B) Supplier-induced demand&#10;C) Fee-for-service&#10;D) Market equilibrium&#10;E) none of the above

Accepted Answer

The answer of _______ refers to the exploitation of asymmetric...

Question 13

Allowing physicians to patent and license practice strategies could help decrease price variations.

Accepted Answer

The answer of Allowing physicians to patent and license practice...

Question 14

There is very little recent support for the existence of supplier-induced demand.

Accepted Answer

The answer of There is very little recent support for...

Question 15

An increase in the use of physician extenders would decrease costs of providing medical care.

Accepted Answer

The answer of An increase in the use of physician...

Deck 12: The Physician Services Industry