Healthcare Economics Quiz
Questions: 16 · 10 minutes
1. A physician both recommends services and is paid more when more reimbursable services are delivered. Which economic concern does this arrangement most directly raise?
Patients will always reject additional treatment
Hospital fixed costs will immediately disappear
Insurance markets will no longer pool risk
Provider incentives may contribute to supplier-induced demand
2. A new treatment costs $20,000 more per patient than the existing treatment and produces an average gain of one additional quality-adjusted life-year. What does $20,000 represent in a cost-effectiveness analysis?
The treatment’s total accounting profit
The patient’s insurance premium
The incremental cost per additional quality-adjusted life-year
The opportunity cost of every alternative treatment combined
3. An insured patient pays a small copayment while the insurer pays most of the bill. Why might the patient be less sensitive to the provider’s full price?
Healthcare has no opportunity cost
A third-party payer separates the patient’s payment from much of the total price
Insurance eliminates scarcity in healthcare
Providers must charge every patient the same amount
4. After enrolling in a plan with very low out-of-pocket costs, some members use nonurgent services more often because they pay little at the point of care. Which concept best describes this change?
Moral hazard
Economies of scale
Supplier-induced demand
Adverse selection
5. A community clinic can use a vacant room either for mental health visits or diabetes education classes. In economic terms, what is the opportunity cost of choosing the mental health service?
The clinic’s total spending on mental health staff
The fixed cost of maintaining the vacant room
The revenue earned from mental health visits
The benefits of the diabetes classes it gives up
6. A hospital receives a predetermined payment for a Medicare inpatient stay based mainly on the patient’s diagnosis category rather than a separate payment for every service. What payment approach is this?
Pure fee-for-service reimbursement
Diagnosis-related prospective payment
Individual medical savings
Retrospective cost reimbursement
7. A patient needs a lifesaving medicine and has no close substitute. If its price rises moderately, the quantity demanded changes very little. How is this demand best described?
Relatively inelastic
Unit elastic
Perfectly elastic
Driven solely by supply
8. Which Medicare part is specifically associated with outpatient prescription drug coverage?
Part A
Part B
Part D
Part C exclusively
9. What is Medicare Advantage, also known as Medicare Part C?
A program limited to inpatient hospital bills
A way to receive Medicare-covered benefits through approved private plans
A federal account used only for prescription purchases
A supplemental policy that can be used only with Medicaid
10. Which part of Original Medicare generally provides coverage for inpatient hospital care?
Medicare Part B
Medicare Part A
Medicare Part D
Medicaid
11. Which part of Original Medicare generally covers physician services and medically necessary outpatient care?
Medicare Part B
Medicare Part A
Medicare Part C only
Medicare Part D
12. Vaccination can reduce illness in the vaccinated person and lower transmission to other people. What economic feature does the benefit to others illustrate?
A sunk cost
Adverse selection
A positive externality
A negative production externality
13. A health department is deciding whether to expand a screening program by one more neighborhood. Which comparison reflects marginal analysis?
Comparing the program’s entire budget with last year’s budget
Comparing public and private ownership of every clinic
Comparing average staff salaries across all departments
Comparing the added benefit of expansion with its added cost
14. A health plan enrolls many people whose medical spending varies from year to year and uses their combined premiums to pay members’ claims. Which insurance function is illustrated?
Risk pooling
Price transparency
Medical underwriting alone
Provider licensing
15. A primary care practice is paid a fixed amount per enrolled patient each month, whether or not that patient visits during the month. What payment model is being used?
Balance billing
Fee for each individual service
Diagnosis-related hospital payment
Capitation
16. An insurer offers the same premium to everyone. People who expect high medical spending enroll more often than people who expect low spending, making the insurance pool costlier than anticipated. What is occurring?
Cost-effectiveness
Price discrimination
Adverse selection
Capitation