1
NEW PHRM 3750 EXAM 1 ACTUAL EXAM
QUESTIONS AND ANSWERS TESTED AND
APPROVED!!!
Derived demand for healthcare -- ANSWER---Most consumers would be happy
to never need to consume health care
-We consume healthcare to benefit for the longterm, but the need in the short
term is usually bad or painful (vaccination, tooth filling, stitches)
Restrictions on competition/Barriers to entry for healthcare -- ANSWER--Many
practices in healthcare markets effectively restrict competition or entry into the
sector
Ex: *patent protection*, licensure requirements for providers, restrictions on
advertising
Equity and Need -- ANSWER---Need for health care can be unlimited, but
resources are limited
-"Need" is difficult to define in context of healthcare
What is economics? -- ANSWER--Study of how people use their scarce
resources to satisfy their unlimited wants/incentives
, 2
What is health economics? -- ANSWER--Branch of economics that focuses on
issues related to efficiency, effectiveness, value, and behavior in the production
and consumption of health and healthcare
What is health? -- ANSWER--State of complete physical, mental, and social
well-being and not merely the absence of disease or infirmity
What is health care? -- ANSWER--Goods and services whose primary purpose
is to improve or prevent deterioration in health
What is health care system? -- ANSWER--Configuration of services that
delivers quality services to all people when and where they need them; requires
robust financing mechanism, well-trained and adequately paid workforce,
reliable information on which to base decisions and policies, well-maintained
facilities and logistics to deliver quality medicines and technologies.
How is Health Care different from other services? (Characteristics of health
care) --
ANSWER---Uncertainty due to presence of third party payers
-Asymmetry of information
-Presence of Externalities
-Derived demand
, 3
-Restrictions on competition
-Barriers to entry
-Equity and Need
-Government interventions/subsidies, public provision
-Non-profit firms
Uncertainty in healthcare -- ANSWER---Present in both demand (uncertain
about type and frequency of health care needed) and supply (uncertain about
outcome of treatment)
-Leads to presence of insurance
Asymmetry of information -- ANSWER---Occurs when one party in transaction
has more information than the other party, which may allow the better informed
party to exploit the less informed party
-Occurs between providers and patients and can go both ways (physician may
know more about diagnosis, patient may know more about symptoms or
history)
Exacerbated by:
-Limited time to shop/seek information
, 4
-Occurs at times when individual is vulnerable or cognitively impaired -
Inability to learn from experience
Externalities in healthcare -- ANSWER---Occur when someone external to the
market transaction (someone who is neither the buyer nor seller) is affected by
transaction and *not* compensated
-Positive - beneficial effect (ex: herd immunity)
-Negative - negative/harmful effect (ex: smoking, pollution)
What is pharmacoeconomics? -- ANSWER--Identifies, measures, and compares
the costs, risks, and benefits of pharmaceutical products, services, or programs
-Determines which alternative produces the best health outcome for the
resources invested, and finds if added benefit of product is worth the added
costs
-Serves to guide optimal healthcare resource allocation in a standardized and
scientifically grounded manner
Misperceptions in pharmacoeconomics -- ANSWER---PE means cost-
containment or costeffectiveness; these are not the only goals of PE analysis.
NEW PHRM 3750 EXAM 1 ACTUAL EXAM
QUESTIONS AND ANSWERS TESTED AND
APPROVED!!!
Derived demand for healthcare -- ANSWER---Most consumers would be happy
to never need to consume health care
-We consume healthcare to benefit for the longterm, but the need in the short
term is usually bad or painful (vaccination, tooth filling, stitches)
Restrictions on competition/Barriers to entry for healthcare -- ANSWER--Many
practices in healthcare markets effectively restrict competition or entry into the
sector
Ex: *patent protection*, licensure requirements for providers, restrictions on
advertising
Equity and Need -- ANSWER---Need for health care can be unlimited, but
resources are limited
-"Need" is difficult to define in context of healthcare
What is economics? -- ANSWER--Study of how people use their scarce
resources to satisfy their unlimited wants/incentives
, 2
What is health economics? -- ANSWER--Branch of economics that focuses on
issues related to efficiency, effectiveness, value, and behavior in the production
and consumption of health and healthcare
What is health? -- ANSWER--State of complete physical, mental, and social
well-being and not merely the absence of disease or infirmity
What is health care? -- ANSWER--Goods and services whose primary purpose
is to improve or prevent deterioration in health
What is health care system? -- ANSWER--Configuration of services that
delivers quality services to all people when and where they need them; requires
robust financing mechanism, well-trained and adequately paid workforce,
reliable information on which to base decisions and policies, well-maintained
facilities and logistics to deliver quality medicines and technologies.
How is Health Care different from other services? (Characteristics of health
care) --
ANSWER---Uncertainty due to presence of third party payers
-Asymmetry of information
-Presence of Externalities
-Derived demand
, 3
-Restrictions on competition
-Barriers to entry
-Equity and Need
-Government interventions/subsidies, public provision
-Non-profit firms
Uncertainty in healthcare -- ANSWER---Present in both demand (uncertain
about type and frequency of health care needed) and supply (uncertain about
outcome of treatment)
-Leads to presence of insurance
Asymmetry of information -- ANSWER---Occurs when one party in transaction
has more information than the other party, which may allow the better informed
party to exploit the less informed party
-Occurs between providers and patients and can go both ways (physician may
know more about diagnosis, patient may know more about symptoms or
history)
Exacerbated by:
-Limited time to shop/seek information
, 4
-Occurs at times when individual is vulnerable or cognitively impaired -
Inability to learn from experience
Externalities in healthcare -- ANSWER---Occur when someone external to the
market transaction (someone who is neither the buyer nor seller) is affected by
transaction and *not* compensated
-Positive - beneficial effect (ex: herd immunity)
-Negative - negative/harmful effect (ex: smoking, pollution)
What is pharmacoeconomics? -- ANSWER--Identifies, measures, and compares
the costs, risks, and benefits of pharmaceutical products, services, or programs
-Determines which alternative produces the best health outcome for the
resources invested, and finds if added benefit of product is worth the added
costs
-Serves to guide optimal healthcare resource allocation in a standardized and
scientifically grounded manner
Misperceptions in pharmacoeconomics -- ANSWER---PE means cost-
containment or costeffectiveness; these are not the only goals of PE analysis.
