Page 1 of 26
19 May 2026
MHA 710 - Healthcare Economics Final Exam |
130 Questions with 100% Correct Answers |
Verified | Latest Update 2026
A public health agency charged with protecting American consumers by enforcing federal public
health laws. Food, medicine, medical devices, and cosmetics are under the jurisdiction of this
agency. - CORRECT ANSWER-Food and Drug Administration (FDA)
A financial measure of a firm's ability to generate after-tax profit out of its total sales. Calculated
by dividing after-tax profit by total sales. - CORRECT ANSWER-Return on sales
A good that is non-rival in distribution and non-exclusive in consumption - CORRECT ANSWER-
Public good
A limit on total spending for a given time period - CORRECT ANSWER-Spending cap
The act of purchasing a product in a market where the price is low and reselling it in a market
where the price is high without the permission of the intellectual property owner. - CORRECT
ANSWER-Parallel trading
A guarantee that all citizens will have health insurance coverage regardless of income or health
status. Coverage usually requires mandatory participation. - CORRECT ANSWER-Universal
coverage
Billing a patient for the difference between the physician's usual charge for a service and the
maximum charge allowed by the patient's health plan. - CORRECT ANSWER-Balance billing
A Medicare policy providing physicians with a guaranteed payment of 80% of the allowable fee. By
accepting, physicians agree to accept the allowable fee as full payment and forgo the practice of
balanced billing. - CORRECT ANSWER-Assignment
A physician who agrees to accept medicare assignment. - CORRECT ANSWER-Participating
physician
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19 May 2026
An insurance premium based on the actuarial probability that an event will occur. - CORRECT
ANSWER-Actuarially fair premium
A supplemental insurance policy sold to Medicare-eligible individuals to pay the deductibles and
coinsurance that are not covered by Medicare. - CORRECT ANSWER-Medigap insurance
The change in total revenue resulting from the sale of the output produced by an additional unit of a
resource - CORRECT ANSWER-Marginal revenue product
Metric used to measure resource use (time, effort, and investment) involved in the production of
physicians' services. Components measured include work effort, practice expense, and the cost of
professional liability insurance - CORRECT ANSWER-Relative-value unit
A classification system for physicians' services, using a weighting scheme that reflects the relative
value of the various services performed. Developed for Medicare by a group of Harvard researchers,
it considers time, skill, and overhead cost required for each service. When used in conjunction with a
monetary conversion factor, medical fees are determined. - CORRECT ANSWER-Resource-based
relative value scale (RBRVS)
A price ceiling set to limit fees to the minimum of the billed charge, the price customarily charged by
the provider, and the prevailing charge in the geographic region - CORRECT ANSWER-Usual,
customary, and reasonable (UCR) charges
An index that assigns weights to various medical services used to determine the relative fees
assigned to them - CORRECT ANSWER-Relative-value scale (RVS)
A monetary value used to translate relative value units into dollar amounts to determine a fee
schedule - CORRECT ANSWER-Monetary conversion factor
The practice of simultaneously buying a commodity at one price and selling it at a higher price -
CORRECT ANSWER-Arbitrage
The practice of selling the same good or service to two different consumers for different prices. The
price differential is not based on differences in cost. - CORRECT ANSWER-Price discrimination
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19 May 2026
Separating a number of related procedures and treating them as individual services for payment
purposes - CORRECT ANSWER-Unbundling
A specific practice required of all participating physicians, such as a policy to refer patients only to a
specific panel of specialists - CORRECT ANSWER-Clinical rule
A primary care physician who directs health care delivery and determines whether patients are
allowed access to specialty care - CORRECT ANSWER-Gatekeeper
A situation in a production process where long-run average costs decline as output expands -
CORRECT ANSWER-Economies of scale
Medical care facilities offered outside the hospital setting that provide same-day surgical care,
including diagnostic imaging and preventive care procedures. - CORRECT ANSWER-Ambulatory
surgery center (ASC)
A linear pricing scheme where prices to different customers are computed based on individual price
elasticity of demand. Customers with a high willingness to pay are charged higher prices. - CORRECT
ANSWER-Ramsey pricing
A pricing scheme in which a percentage profit is added to the average cost. - CORRECT ANSWER-
Cost-plus pricing
A compilation of hospital specific charges for all items that the hospital can bill to patients, insurance
plans, and other payers. The list includes all procedures, services, drugs, and tests that are
performed at the facility. - CORRECT ANSWER-Chargemaster
A congressionally mandated scheme to classify outpatient services into clinically similar procedures.
- CORRECT ANSWER-Ambulatory payment classification (APC)
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.
19 May 2026
MHA 710 - Healthcare Economics Final Exam |
130 Questions with 100% Correct Answers |
Verified | Latest Update 2026
A public health agency charged with protecting American consumers by enforcing federal public
health laws. Food, medicine, medical devices, and cosmetics are under the jurisdiction of this
agency. - CORRECT ANSWER-Food and Drug Administration (FDA)
A financial measure of a firm's ability to generate after-tax profit out of its total sales. Calculated
by dividing after-tax profit by total sales. - CORRECT ANSWER-Return on sales
A good that is non-rival in distribution and non-exclusive in consumption - CORRECT ANSWER-
Public good
A limit on total spending for a given time period - CORRECT ANSWER-Spending cap
The act of purchasing a product in a market where the price is low and reselling it in a market
where the price is high without the permission of the intellectual property owner. - CORRECT
ANSWER-Parallel trading
A guarantee that all citizens will have health insurance coverage regardless of income or health
status. Coverage usually requires mandatory participation. - CORRECT ANSWER-Universal
coverage
Billing a patient for the difference between the physician's usual charge for a service and the
maximum charge allowed by the patient's health plan. - CORRECT ANSWER-Balance billing
A Medicare policy providing physicians with a guaranteed payment of 80% of the allowable fee. By
accepting, physicians agree to accept the allowable fee as full payment and forgo the practice of
balanced billing. - CORRECT ANSWER-Assignment
A physician who agrees to accept medicare assignment. - CORRECT ANSWER-Participating
physician
, Page 2 of 26
19 May 2026
An insurance premium based on the actuarial probability that an event will occur. - CORRECT
ANSWER-Actuarially fair premium
A supplemental insurance policy sold to Medicare-eligible individuals to pay the deductibles and
coinsurance that are not covered by Medicare. - CORRECT ANSWER-Medigap insurance
The change in total revenue resulting from the sale of the output produced by an additional unit of a
resource - CORRECT ANSWER-Marginal revenue product
Metric used to measure resource use (time, effort, and investment) involved in the production of
physicians' services. Components measured include work effort, practice expense, and the cost of
professional liability insurance - CORRECT ANSWER-Relative-value unit
A classification system for physicians' services, using a weighting scheme that reflects the relative
value of the various services performed. Developed for Medicare by a group of Harvard researchers,
it considers time, skill, and overhead cost required for each service. When used in conjunction with a
monetary conversion factor, medical fees are determined. - CORRECT ANSWER-Resource-based
relative value scale (RBRVS)
A price ceiling set to limit fees to the minimum of the billed charge, the price customarily charged by
the provider, and the prevailing charge in the geographic region - CORRECT ANSWER-Usual,
customary, and reasonable (UCR) charges
An index that assigns weights to various medical services used to determine the relative fees
assigned to them - CORRECT ANSWER-Relative-value scale (RVS)
A monetary value used to translate relative value units into dollar amounts to determine a fee
schedule - CORRECT ANSWER-Monetary conversion factor
The practice of simultaneously buying a commodity at one price and selling it at a higher price -
CORRECT ANSWER-Arbitrage
The practice of selling the same good or service to two different consumers for different prices. The
price differential is not based on differences in cost. - CORRECT ANSWER-Price discrimination
, Page 3 of 26
19 May 2026
Separating a number of related procedures and treating them as individual services for payment
purposes - CORRECT ANSWER-Unbundling
A specific practice required of all participating physicians, such as a policy to refer patients only to a
specific panel of specialists - CORRECT ANSWER-Clinical rule
A primary care physician who directs health care delivery and determines whether patients are
allowed access to specialty care - CORRECT ANSWER-Gatekeeper
A situation in a production process where long-run average costs decline as output expands -
CORRECT ANSWER-Economies of scale
Medical care facilities offered outside the hospital setting that provide same-day surgical care,
including diagnostic imaging and preventive care procedures. - CORRECT ANSWER-Ambulatory
surgery center (ASC)
A linear pricing scheme where prices to different customers are computed based on individual price
elasticity of demand. Customers with a high willingness to pay are charged higher prices. - CORRECT
ANSWER-Ramsey pricing
A pricing scheme in which a percentage profit is added to the average cost. - CORRECT ANSWER-
Cost-plus pricing
A compilation of hospital specific charges for all items that the hospital can bill to patients, insurance
plans, and other payers. The list includes all procedures, services, drugs, and tests that are
performed at the facility. - CORRECT ANSWER-Chargemaster
A congressionally mandated scheme to classify outpatient services into clinically similar procedures.
- CORRECT ANSWER-Ambulatory payment classification (APC)
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.
