MHA 710 Health Economics-
Chapters 1-4||Latest Exam
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What is "economics"? -CORRECT ANSWER A Map for decision making. Economics
analyzes the allocation of scarce resources.
What are some of the specific challenges faced by managers in healthcare? -
CORRECT ANSWER 1. The central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
What does asymmetric information mean? Can you give an example? -CORRECT
ANSWER When one party in a transaction has less information than the other party.
For example, physicians and other healthcare providers usually understand patients'
medical options better than patients do. Unaware of their choices, patients may accept
recommendations for therapies that are not cost-effective or, recognizing their
vulnerability to physicians' self-serving advice, may resist recommendations made in
their best interest.
What is adverse selection? -CORRECT ANSWER A situation that occurs when buyers
have better information than sellers. For example, high-risk consumers are willing to pay
more for insurance than low-risk consumers are. (Organizations that have difficulty
distinguishing high-risk from low-risk consumers are unlikely to be profitable.)
What is the problem of scarcity? -CORRECT ANSWER Demand for a good or service is
greater than the availability
What does it mean to say people are assumed to make choices rationally? -CORRECT
ANSWER focuses on individuals' efforts to best realize their goals, given their
resources.
What does it mean to says resources are scarce? -CORRECT ANSWER Anything
useful in consumption or production that has alternative uses.
What is opportunity cost? -CORRECT ANSWER Potential loss from a missed
opportunity. Passing up the next best choice.
, What does "marginal" refer to? -CORRECT ANSWER The examination of the costs and
benefits through a small change in the production of goods
What does efficiency refer to? -CORRECT ANSWER No way to rearrange production of
goods in a way that makes one person more better off without making somebody else
worse off. How well an economy uses scare resources to meet the needs/wants of their
customers
How do positive economic statements differ from normative economic statements? -
CORRECT ANSWER Positive economics is objective while normative economics is
subjective. Facts/ What is vs What should be
How can economics be applied to the health sector? -CORRECT ANSWER Describe,
Explain, Evaluate, Plan
As we progress through the chapters, think about the special characteristics that apply
to the health sector that might limit the applicability of traditional economic models. -
CORRECT ANSWER Social determinants of health, few insurance companies that
providers rely on, not a perfectly competitive market
How are healthcare products both outputs and inputs? Can you give an example? -
CORRECT ANSWER Products (goods and services are considered products) are
commonly both inputs and outputs. For example, a surgical tool is an input into a
surgery and an output of a surgical tool company. Similarly, the surgery itself can be
considered an output of the surgical team or an input into the health of the patient.
What is a life year? And what is it used for in the context of this chapter? -CORRECT
ANSWER One additional year of life. It can equal one added year of life for an individual
or an average of 1/nth of a year of life for n people. An example is spending $1 million
by reducing childhood obesity and saving thousands of lives or using if for
colonoscopies in 81 year old african american men and saving few lives.
What are examples of interventions that have the most impact on life years and those
that have less impact? -CORRECT ANSWER Interventions with the most include
antismoking, reducing childhood obesity, and multidisciplinary measurement of heart
failure. Interventions with the least include colonoscopies for african american men who
are 81 or 76 and multidisciplinary heart failure measurement with exercise.
How does healthcare spending per person in the US compare to other countries? -
CORRECT ANSWER US spends far more per person on healthcare than any other
large countries.
How does US life expectancy at birth compare to other countries? -CORRECT
ANSWER 27 out of 34 of the OECD countries (bad!)
Chapters 1-4||Latest Exam
upload||100% Guaranteed Pass
What is "economics"? -CORRECT ANSWER A Map for decision making. Economics
analyzes the allocation of scarce resources.
What are some of the specific challenges faced by managers in healthcare? -
CORRECT ANSWER 1. The central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
What does asymmetric information mean? Can you give an example? -CORRECT
ANSWER When one party in a transaction has less information than the other party.
For example, physicians and other healthcare providers usually understand patients'
medical options better than patients do. Unaware of their choices, patients may accept
recommendations for therapies that are not cost-effective or, recognizing their
vulnerability to physicians' self-serving advice, may resist recommendations made in
their best interest.
What is adverse selection? -CORRECT ANSWER A situation that occurs when buyers
have better information than sellers. For example, high-risk consumers are willing to pay
more for insurance than low-risk consumers are. (Organizations that have difficulty
distinguishing high-risk from low-risk consumers are unlikely to be profitable.)
What is the problem of scarcity? -CORRECT ANSWER Demand for a good or service is
greater than the availability
What does it mean to say people are assumed to make choices rationally? -CORRECT
ANSWER focuses on individuals' efforts to best realize their goals, given their
resources.
What does it mean to says resources are scarce? -CORRECT ANSWER Anything
useful in consumption or production that has alternative uses.
What is opportunity cost? -CORRECT ANSWER Potential loss from a missed
opportunity. Passing up the next best choice.
, What does "marginal" refer to? -CORRECT ANSWER The examination of the costs and
benefits through a small change in the production of goods
What does efficiency refer to? -CORRECT ANSWER No way to rearrange production of
goods in a way that makes one person more better off without making somebody else
worse off. How well an economy uses scare resources to meet the needs/wants of their
customers
How do positive economic statements differ from normative economic statements? -
CORRECT ANSWER Positive economics is objective while normative economics is
subjective. Facts/ What is vs What should be
How can economics be applied to the health sector? -CORRECT ANSWER Describe,
Explain, Evaluate, Plan
As we progress through the chapters, think about the special characteristics that apply
to the health sector that might limit the applicability of traditional economic models. -
CORRECT ANSWER Social determinants of health, few insurance companies that
providers rely on, not a perfectly competitive market
How are healthcare products both outputs and inputs? Can you give an example? -
CORRECT ANSWER Products (goods and services are considered products) are
commonly both inputs and outputs. For example, a surgical tool is an input into a
surgery and an output of a surgical tool company. Similarly, the surgery itself can be
considered an output of the surgical team or an input into the health of the patient.
What is a life year? And what is it used for in the context of this chapter? -CORRECT
ANSWER One additional year of life. It can equal one added year of life for an individual
or an average of 1/nth of a year of life for n people. An example is spending $1 million
by reducing childhood obesity and saving thousands of lives or using if for
colonoscopies in 81 year old african american men and saving few lives.
What are examples of interventions that have the most impact on life years and those
that have less impact? -CORRECT ANSWER Interventions with the most include
antismoking, reducing childhood obesity, and multidisciplinary measurement of heart
failure. Interventions with the least include colonoscopies for african american men who
are 81 or 76 and multidisciplinary heart failure measurement with exercise.
How does healthcare spending per person in the US compare to other countries? -
CORRECT ANSWER US spends far more per person on healthcare than any other
large countries.
How does US life expectancy at birth compare to other countries? -CORRECT
ANSWER 27 out of 34 of the OECD countries (bad!)
