MHA 710 Exam 1 | 100% Correct Answers |
Verified | Latest 2024 Version
What is "economics"? - A Map for decision making. Economics analyzes the allocation of scarce
resources.
What are some of the specific challenges faced by managers in healthcare? -
1. The central roles of risk and uncertai...
MHA 710 Exam 1 | 100% Correct Answers |
Verified | Latest 2024 Version
What is "economics"? - ✔✔A Map for decision making. Economics analyzes the allocation of scarce
resources.
What are some of the specific challenges faced by managers in healthcare? - ✔✔
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? - ✔✔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? - ✔✔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? - ✔✔Demand for a good or service is greater than the availability
What does it mean to say people are assumed to make choices rationally? - ✔✔focuses on individuals'
efforts to best realize their goals, given their resources.
, What does it mean to says resources are scarce? - ✔✔Anything useful in consumption or production that
has alternative uses.
What is opportunity cost? - ✔✔Potential loss from a missed opportunity. Passing up the next best
choice.
What does "marginal" refer to? - ✔✔The examination of the costs and benefits through a small change
in the production of goods
What does efficiency refer to? - ✔✔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? - ✔✔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? - ✔✔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. - ✔✔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? - ✔✔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? - ✔✔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? - ✔✔Interventions with the most include antismoking, reducing childhood obesity, and
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