Question 1

Which of the following is the first step in the CBA/CEA process?

Accepted Answer

Defining the health care issue is the first step in the CBA/CEA process. This step involves identifying the problem or opportunity that the CBA/CEA will address, as well as the goals and objectives of the intervention.

Question 2

When defining the health issue, which of the following is one of the things the team must focus on?

Accepted Answer

Identifying the affected population is crucial in defining a health issue as it helps in understanding who is impacted and tailoring interventions accordingly.

Question 3

Which of the following refers to the relevant change in effectiveness associated with an intervention?

Accepted Answer

Marginal change refers to the small or incremental change in effectiveness associated with an intervention, often used in economic and statistical contexts to assess the impact of a small change in a variable.

Question 4

A proposal that does not increase the overall costs to the agency is considered:

Accepted Answer

A proposal that does not increase the overall costs to the agency is considered cost neutral, meaning it neither saves nor costs additional money.

Question 5

Which of the following would consider the benefits of a program in terms of the number of lives saved?

Accepted Answer

Cost-effectiveness analysis evaluates the benefits of a program in terms of non-monetary units, such as the number of lives saved, to determine the most efficient way to achieve a specific outcome.

Question 6

Analysis of health care services based on supply and demand is complicated by the fact that:

Accepted Answer

Demand for healthcare services comes from multiple sources, including patients, insurance companies, and government programs, making the analysis complex.

Question 7

Which of the following is TRUE of the standard gamble approach?

Accepted Answer

The answer of Which of the following is TRUE of...

Question 8

An assessment asks respondents how many months of life they would be willing to give up to achieve a more desirable outcome. This is an example of which of the following?

Accepted Answer

The time trade-off approach involves respondents indicating how much time they would be willing to trade for a more desirable health outcome, which aligns with the question about giving up months of life.

Question 9

Weinstein and Stason noted that a key issue with cost-benefit analysis in health care is that:

Accepted Answer

Weinstein and Stason highlighted the ethical and practical challenges of assigning a monetary value to life and health, which is a central issue in cost-benefit analysis in health care.

Question 10

Which of the following uses lost labor productivity as a measurement?

Accepted Answer

The human capital approach measures lost labor productivity by estimating the economic value of an individual's lost output due to illness, disability, or death.

Question 11

An organization wants to maximize its benefit-cost ratio, getting the most benefit for a given sum of money. This is a basic tenet of which of the following?

Accepted Answer

Cost-effectiveness analysis is a method used to evaluate the benefits relative to the costs, aiming to maximize the benefit-cost ratio.

Question 12

Fixed costs that apply only over a specific volume range are called:

Accepted Answer

Step-variable costs are fixed costs that remain constant over a specific range of volume but can change when the volume exceeds that range.

Question 13

Why is the aggregate cost method not recommended for health care costing?

Accepted Answer

The aggregate cost method does not account for how costs change with volume, which can lead to inaccurate cost estimations in healthcare where costs often vary with the level of service provided.

Question 14

The Monte Carlo simulation technique is an example of which of the following?

Accepted Answer

The answer of The Monte Carlo simulation technique is an...

Question 15

The question of whether money will lose its purchasing power in the future due to inflation is a component of which of the following?

Accepted Answer

The time value of money concept considers how inflation affects the purchasing power of money over time, impacting its future value.

Question 16

The discount rate at which the NPV is 0 is the:

Accepted Answer

The IRR (Internal Rate of Return) is the discount rate at which the Net Present Value (NPV) of a project is zero.

Question 17

The _____ is often the first thing that's determined in sensitivity analysis.

Accepted Answer

The answer of The _____ is often the first thing...

Question 18

In what way are ratios useful?

Accepted Answer

Ratios are useful when compared to a minimum standard value as they provide a benchmark to assess performance or efficiency.

Question 19

According to Cleverly and Cameron, it is equally important that public- and private-sector financial systems:

Accepted Answer

ROI or IRR estimates are used for decision making in both public- and private-sector financial systems.

Question 20

Small organizations especially have to worry about:

Accepted Answer

Working capital requirements are a major concern for small organizations because they often have limited access to capital and may have difficulty meeting their short-term financial obligations.

Quiz 10: The Policy Analysis Process: Evaluation of Economic Viability