Question 1

The dominant factor affecting medical care delivery and finance in the 1960s was
a. the Hill-Burton Act.
b. prospective payment for hospitals.
c. the creation of Medicare and Medicaid.
d. the explosive growth of managed care.
e. the passage of ERISA.

Accepted Answer

The prospective payment system, introduced in the 1980s, significantly changed hospital reimbursement by paying a fixed amount for patient treatment based on diagnosis, which greatly influenced medical care delivery and finance during that period.

Question 2

This study was the catalyst for the early 20^th century reform of medical education in the United States. What was it?
a. Coolidge Commission.
b. Hill-Burton Committee.
c. Mangrum Report.
d. Flexner Report.
e. Kaiser Foundation Study.

Accepted Answer

The Flexner Report, published in 1910, was a critical study that led to significant reforms in medical education in the United States, emphasizing higher standards and scientific rigor.

Question 3

Consolidation activity in the hospital industry
a. has slowed due to government regulations.
b. has created a large number of nationwide for-profit hospital chains.
c. has occurred almost exclusively at the local level.
d. occurs for same reasons that cause consolidation in other industries.

Accepted Answer

Consolidation in the hospital industry occurs for similar reasons as in other industries, such as achieving economies of scale, increasing market share, and improving efficiency.

Question 4

The predominate organizational form for U.S. hospitals is not-for-profit. Why?
a. The profit motive corrupts human behavior.
b. For-profit hospitals do not provide charity care.
c. Private not-for-profit hospitals engage in most of the medical research.
d. The not-for-profit form provides the most benefits to physicians.
e. All of the above.

Accepted Answer

The answer of The predominate organizational form for U.S. hospitals...

Question 5

Horizontal integration allows firms to do all of the following except
a. take advantage of cost savings due to economies of scale.
b. reduce administrative costs.
c. create brand identity.
d. fully integrate with primary care clinics and acute care nursing facilities.

Accepted Answer

Horizontal integration involves merging with or acquiring firms at the same level of the supply chain, not integrating with different levels like primary care clinics and acute care nursing facilities, which would be vertical integration.

Question 6

In the 19^th century hospitals had notorious reputations-questionable places to visit, risky places to stay. What advances changed all this?
a. Development of the germ theory of disease.
b. Advances in medical technology.
c. Availability of health insurance to pay the bills.
d. All of the above.

Accepted Answer

The answer of In the 19^th century hospitals had notorious...

Question 7

The dominant factor affecting medical care delivery and finance in the 1960s was
a. the Hill-Burton Act.
b. prospective payment for hospitals.
c. the creation of Medicare and Medicaid.
d. the explosive growth of managed care.
e. the passage of ERISA.

Accepted Answer

The 1990s saw a significant rise in managed care organizations, which aimed to control healthcare costs and improve quality by managing the care provided to patients. This growth had a major impact on how medical care was delivered and financed during that decade.

Question 8

Economies of scale exist when&#10;a. long-run average costs decline as output increases.&#10;b. long-run average costs are constant.&#10;c. long-run average costs increase as output increases.&#10;d. short-run average costs decline.&#10;e. short-run average costs increase.

Accepted Answer

Economies of scale occur when increasing production leads to lower long-run average costs, as fixed costs are spread over more units and operational efficiencies are achieved.

Question 9

Using the physician-control model to explain hospital behavior leads to which of the following conclusions?
a. Other medical inputs tend to be over used to maximize physicians' productivity.
b. The use of operating rooms will be maximized with little excess capacity.
c. Physicians will strive to utilize the nursing staff efficiently.
d. All investment decisions will be based on optimal resource use.
e. All of the above are conclusions of the physician-control model.

Accepted Answer

The physician-control model suggests that hospitals may overuse medical inputs to enhance physicians' productivity, rather than focusing on optimal resource use or efficiency.

Question 10

Which of the following statements is true concerning the trend in hospital care between in-patient and out-patient services since the mid-1980s?
a. Both have been declining.
b. Out-patient services have been static while in-patient services have been declining.
c. Out-patient services have increased substantially because admissions are down.
d. Both have been growing.
e. There has been no noticeable trend in either in-patient or outpatient services.

Accepted Answer

Since the mid-1980s, there has been a significant shift towards outpatient services as hospitals and healthcare systems have focused on reducing inpatient admissions and lengths of stay, leading to an increase in outpatient care.

Question 11

The merger of two community hospitals located in the same geographic market is called
a. vertical integration.
b. horizontal integration.
c. a leveraged buyout.
d. a conglomerate merger.
e. a real shame since one of the hospitals will likely close.

Accepted Answer

The answer of The merger of two community hospitals located...

Question 12

The dominant factor affecting medical care delivery and finance in the 1980s was
a. the Hill-Burton Act.
b. prospective payment for hospitals.
c. creation of Medicare and Medicaid.
d. the explosive growth of managed care.
e. ERISA.

prospective payment for hospitals

Accepted Answer

The answer of The dominant factor affecting medical care delivery...

Question 13

Congressional studies report that Medicare payments fall 11 percent below the cost of treating patients while private insurance patients pay 29 percent more than cost. This phenomenon is called
a. price discrimination.
b. the Medigap.
c. cost-shifting.
d. cost-plus pricing.
e. revenue enhancing.

Accepted Answer

The answer of Congressional studies report that Medicare payments fall...

Deck 10: The Hospital Services Market