MHA 710 Exam 1 with 100% Correct Answers 2024
What is "economics"?
What are some of the specific challenges faced by managers in healthcare?
What does asymmetric information mean? Can you give an example?
What is adverse selection?
What is the problem of scarcity?
What does it mean to say peo...
Ans: A Map for decision making. Economics analyzes the allocation of scarce
resources.
2). What are some of the specific challenges faced by managers in healthcare?
Ans: 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
3). What does asymmetric information mean? can you give an example?
Ans: 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.
4). What is adverse selection?
Ans: 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.)
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, 5). What is the problem of scarcity?
Ans: Demand for a good or service is greater than the availability
6). What does it mean to say people are assumed to make choices rationally?
Ans: focuses on individuals' efforts to best realize their goals, given their resources.
7). What does it mean to says resources are scarce?
Ans: Anything useful in consumption or production that has alternative uses.
8). What is opportunity cost?
Ans: Potential loss from a missed opportunity. Passing up the next best choice.
9). What does "marginal" refer to?
Ans: The examination of the costs and benefits through a small change in the
production of goods
10). What does efficiency refer to?
Ans: 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
11). How do positive economic statements differ from normative economic statements?
Ans: Positive economics is objective while normative economics is subjective. Facts/
What is vs What should be
12). How can economics be applied to the health sector?
Ans: Describe, Explain, Evaluate, Plan
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, 13). 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.
Ans: Social determinants of health, few insurance companies that providers rely on,
not a perfectly competitive market
14). How are healthcare products both outputs and inputs? can you give an example?
Ans: 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.
15). What is a life year? and what is it used for in the context of this chapter?
Ans: 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.
16). What are examples of interventions that have the most impact on life years and those that
have less impact?
Ans: 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.
17). How does healthcare spending per person in the us compare to other countries?
Ans: US spends far more per person on healthcare than any other large countries.
18). How does us life expectancy at birth compare to other countries?
Ans: 27 out of 34 of the OECD countries (bad!)
19). Has the us achieved the same increases in life expectancy relative to their changes in
spending as in other countries?
Ans: From one perspective, this increase in life expectancy reflects impres-sive
performance. From another, it does not compare well to the performance of other
industrialized countries. For example, French life expectancy at birth rose from 79.2
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