Chapter 07: Paying for Health Care in America: Rising Costs and Challenges
Cherry: Contemporary Nursing: Issues, Trends, and Management, 9th Edition
MULTIPLE CHOICE
1. An older adult client was admitted to the hospital with the condition classified as
―pneumonia.‖ Reimbursement for care was based on a predetermined fixed price. What is
this classification system referred to as?
a. Diagnosis-related groups (DRGs)
b. Subjective symptom management
c. Acuity classification system
d. Organized managed care
ANS: A
DRGs are used in reimbursement for health care services based on a predetermined fixed
price per case or diagnosis in 468 categories. Under DRGs, each Medicare client is assigned
to a diagnostic grouping based on his or her primary diagnosis at hospital admission.
Medicare limits total payment to the hospital to the amount preestablished for that DRG.
DIF:Comprehension
2. The precise classification of clients according to the highest diagnosis-related group (DRG)
has created a new role for nurses, known as a _____ nurse. a. case management
b. quality assurance
c. utilization review
d. cost-control
ANS: C
Hospital-based utilization review nurses review medical records to determine the most
appropriate DRG for clients. Financial gains can be made through careful diagnosis of
clients according to their highest potential DRG classification.
DIF:Knowledge
3. Diagnosis-related groups (DRGs) have attempted to reduce health care costs by decreasing
what component of care?
a. Hospital admission rates
b. Length of hospital stay
c. Outpatient services
d. Specialty groups
ANS: B
, Hospitals face a strong financial incentive from the DRG reimbursement system to reduce
the client‘s length of stay and minimize procedures performed. If hospital costs exceed the
DRG payment for a client‘s treatment, the hospital incurs a loss, but if costs are less than the
DRG amount, the hospital makes a profit.
DIF:Comprehension
4. When reviewing the literature on the effects of Medicaid on health care for the poor, what
common problem would the nurse researcher find? a. Less access than even the uninsured
b. Receive many unnecessary treatments
c. A lack of consistent providers
d. An abuse of preventive services
ANS: C
The poor are more likely to lack a usual source of care, are less likely to use preventive
services, and are more likely to be hospitalized for avoidable conditions than are those who
are not poor.
DIF:Comprehension
5. Lack of insurance, uninsured populations, and uncompensated care are covered by charging
more to those who can pay. What term is used to refer to this practice? a. Charity
b. Cost shifting
c. Price sharing
d. Governmental reimbursement
ANS: B
Cost shifting occurs when providers increase their charges against households and public and
private insurers who pay for their own care while making some contribution to the care of
the uninsured population.
DIF:Comprehension
6. A contractual agreement between the insurer and the provider in which covered members are
encouraged to use specific health care providers in return for reduced rates is referred to as
which type of arrangement?
a. Health maintenance organization
b. Preferred provider organization
c. Fee-for-service arrangement
d. Philanthropic agency
ANS: B
A preferred provider organization is an arrangement by which the member pays a premium
for a fixed percentage of expense coverage. This method includes a required deductible and a
Cherry: Contemporary Nursing: Issues, Trends, and Management, 9th Edition
MULTIPLE CHOICE
1. An older adult client was admitted to the hospital with the condition classified as
―pneumonia.‖ Reimbursement for care was based on a predetermined fixed price. What is
this classification system referred to as?
a. Diagnosis-related groups (DRGs)
b. Subjective symptom management
c. Acuity classification system
d. Organized managed care
ANS: A
DRGs are used in reimbursement for health care services based on a predetermined fixed
price per case or diagnosis in 468 categories. Under DRGs, each Medicare client is assigned
to a diagnostic grouping based on his or her primary diagnosis at hospital admission.
Medicare limits total payment to the hospital to the amount preestablished for that DRG.
DIF:Comprehension
2. The precise classification of clients according to the highest diagnosis-related group (DRG)
has created a new role for nurses, known as a _____ nurse. a. case management
b. quality assurance
c. utilization review
d. cost-control
ANS: C
Hospital-based utilization review nurses review medical records to determine the most
appropriate DRG for clients. Financial gains can be made through careful diagnosis of
clients according to their highest potential DRG classification.
DIF:Knowledge
3. Diagnosis-related groups (DRGs) have attempted to reduce health care costs by decreasing
what component of care?
a. Hospital admission rates
b. Length of hospital stay
c. Outpatient services
d. Specialty groups
ANS: B
, Hospitals face a strong financial incentive from the DRG reimbursement system to reduce
the client‘s length of stay and minimize procedures performed. If hospital costs exceed the
DRG payment for a client‘s treatment, the hospital incurs a loss, but if costs are less than the
DRG amount, the hospital makes a profit.
DIF:Comprehension
4. When reviewing the literature on the effects of Medicaid on health care for the poor, what
common problem would the nurse researcher find? a. Less access than even the uninsured
b. Receive many unnecessary treatments
c. A lack of consistent providers
d. An abuse of preventive services
ANS: C
The poor are more likely to lack a usual source of care, are less likely to use preventive
services, and are more likely to be hospitalized for avoidable conditions than are those who
are not poor.
DIF:Comprehension
5. Lack of insurance, uninsured populations, and uncompensated care are covered by charging
more to those who can pay. What term is used to refer to this practice? a. Charity
b. Cost shifting
c. Price sharing
d. Governmental reimbursement
ANS: B
Cost shifting occurs when providers increase their charges against households and public and
private insurers who pay for their own care while making some contribution to the care of
the uninsured population.
DIF:Comprehension
6. A contractual agreement between the insurer and the provider in which covered members are
encouraged to use specific health care providers in return for reduced rates is referred to as
which type of arrangement?
a. Health maintenance organization
b. Preferred provider organization
c. Fee-for-service arrangement
d. Philanthropic agency
ANS: B
A preferred provider organization is an arrangement by which the member pays a premium
for a fixed percentage of expense coverage. This method includes a required deductible and a
