chapter 4 Flashcards
A student in an economics course is aware that the three premises that the study of economics is based upon would involve which of the following?
a. Price elasticity, choice, and scarcity
b. Scarcity, choice, and preference
c. Choice, price elasticity, and preference
d. Price elasticity, scarcity, and cost maximization
The three principles upon which the study of economics is based are scarcity (resources exist in specific finite quantities and the consumption demand is generally greater than the supply), choice (decisions are made about which commodities or resources to select and produce), and preference (individual and societal influence impact which items or services are preferred and which are not). INTRODUCTION
The concept of _____ does not work well when applied to health care because the general rule that when the price of an item or service goes up, the demand goes down does not necessarily impact the public’s demand for (or belief in their right to obtain) this item or service.
a. Price elasticity c. Economics
b. Scarcity d. Cost maximization
A: Price elasticity refers to the price that a person is willing to pay for any given item. The general rule states that when the cost of an item or service goes up, its demand goes down; however, this principle does not always apply when dealing with health care issues due to the public’s belief that they are entitled to the best available health care, state-of-the-art treatments, and innovative new techniques and medications, many of which are expensive due to their newness and the overhead to produce them. INTRODUCTION
A nurse educator evaluates the students’ understanding of the current factors influencing health care reform. Which response by a student would indicate that further teaching is required?
a. Interest groups c. Altruism
b. Political ideology d. Policy entrepreneurs
C: Further teaching is necessary if a student responded, “Altruism.” While a long-standing tradition of health care focused on altruism (the unselfish concern or dedication to the care of the sick), current factors influencing health care reform are interest groups, political ideology, and policy entrepreneurs. TRADITIONAL PERSPECTIVE ON THE COST OF HEALTH CARE
A nurse manager recognizes that methods used to account for the cost of health care expenditure include which of the following?
a. Regression analysis, flowcharts, and relative value points
b. Patient classification systems, regression analysis, and flowcharts
c. Relative value units, regression analysis, and patient classification systems
d. Relative value points, process improvement, and quality management
C: The use of certain processes can help to simplify and standardize the cost of health care expenditures such as the cost of nursing care. Some of these processes are relative value units (RVU), patient classification systems (PCS), and regression analysis. KEY CONCEPTS
An instructor wants to determine whether a nursing student knows during which era the cost of health care began to be questioned. Which response by the student would indicate that the student knows?
a. 1940s c. 1960s
b. 1950s d. 1990s
C: Prior to the 1960s, it was assumed that all Americans were entitled to all of the health care knowledge, skills, and treatments available no matter what the cost. Expenditures for health care escalated upwards and, in an attempt to control these costs, the U.S. government enacted Titles XVIII and XIX in 1965. Titles XVIII and XIX were amendments to the Social Security Act (Medicare and Medicaid programs). They were designed to require health care providers to provide documentation of care for Medicare and Medicaid patients. RIGHT HEALTH CARE AT ANY COST
During an in-service training, the speaker evaluates the attendees’ knowledge of the term cost plus. Which response by the attendees indicates they understand?
a. An international discount store
b. The amount of monies spent on health care plus the current inflation factor
c. The cost to the provider plus a profit incentive for being in business
d. The expenditure for being in the health care business plus benefits from pharmaceutical companies
C: As health care expenditures continued to escalate upward, the concept of cost plus became the way to determine the expenditure involved with service delivery. The actual cost (expenditure) the provider incurred for care plus a profit incentive for being in business became known as “cost plus.” The emphasis here was not on how services could be delivered economically, but “the more you spend, the more you get.” COST PLUS
A newly hired staff nurse understands that the organization’s vision statement provides which goals for the organization?
a. Short-term c. Short-term and long-term
b. Long-term d. Anticipated, short-term, and long-term
B: The vision statement logically extends the mission statement into the future by establishing long-range or long-term goals for the organization. The mission provides the initial purpose for the existence of the company and the rationale that justifies that existence. THE COST EQUATION: MONEY = MISSION = MONEY
A local hospital has no stockholders. This type of organization is most likely:
a. for-profit. c. monopoly.
b. not-for-profit. d. fiefdom.
B: Not-for-profit businesses do not have shareholders to share in their successes and profits. All of the profits are channeled directly back into the business for its maintenance and growth. For-profit businesses distribute a certain portion or percentage of their profits to their stockholders as appreciation for their fiscal investment in the company. BUSINESS PROFIT
Nurses should be familiar with the concept of ethics and understand that it represents the concern for which of the following?
a. Others instead of oneself
b. Oneself instead of others
c. The general welfare of society as the proper goal of actions
d. The welfare of the individual as opposed to groups as the proper goal of actions
C: Ethical behaviors and actions relate to the general welfare of society instead of primarily oneself (egoism) or the unselfish concern for the welfare of others (altruism).
TRADITIONAL PERSPECTIVE ON THE COST OF HEALTH CARE
An accountant at the local hospital would understand that which of the following government organizations is responsible for the administration of Medicare and Medicaid?
a. Health Care Financing Administration (HCFA)
b. Social Security Department
c. Tax Equity and Fiscal Responsibility Act (TEFRA)
d. Congress
A: It is the responsibility of the Health Care Financing Administration (HCFA) to administer and oversee the Medicare and Medicaid programs. In 1982, the Tax Equity and Fiscal Responsibility Act (TEFRA) went into effect as a means of establishing new payment regulations in an attempt to reduce the increasing governmental expenditure for these programs. CONTEMPORARY PERSPECTIVES ON COST OF HEALTH CARE: HEALTH CARE AS A BUSINESS
A client is seen at the local health center where a flat rate of payment up front is required, instead of reimbursing the health care provider’s cost. The client is most likely using which form of payment?
a. Pay for performance c. Cost plus
b. Prospective payment system d. Selective payment
B: The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 changed the way in which health care providers were paid for their services to Medicare and Medicaid patients. This new payment system is called prospective payment, and it reimburses the provider a flat rate that was stated up front instead of reimbursing for the actual cost of services rendered. CONTEMPORARY PERSPECTIVES ON COST OF HEALTH CARE: HEALTH CARE AS A BUSINESS
Which of the following was initiated to help ensure that the quality and safety of care was not compromised?
a. CQI c. TEFRA
b. HSA d. PPO
A: With the increase of monitoring and accountability for health care expenditure and the decrease of available services per health care dollar, attention to the quality and safety of the care given arose. Programs such as continuous quality improvement (CQI) and total quality improvement (TQI) were begun to help assure society that these cost management efforts were not compromising care. NEED FOR HEALTH CARE DETERMINED BY THE CONSUMER
High Risk Pool plans are:
a. a way to save money and get a tax deduction.
b. an incentive to shop for cost-effective health care services.
c. a branch of the U.S. government that deals with health and health services.
d. plans for patients previously refused insurance due to preexisting health care conditions.
D: State-administered High Risk Pool plans are for patients previously refused insurance due to preexisting health conditions; they provide affordable health care insurance for 45 million uninsured Americans. These uninsured persons can either choose a government-run insurance plan or they can choose from private insurance plans.NEED FOR HEALTH CARE DETERMINED BY THE CONSUMER
Which of the following emerged as the answer to cost-efficient quality care?
a. Health care savings plan c. Managed care
b. Evidence-based care d. Planned parenthood
C: Managed care emerged as the answer to cost-efficient quality care. The managed care model was generated from market (public) response to the curbing of services brought about in response to regulatory and governmental monitoring and restrictions of services such as those found in Medicare and Medicaid programs. MANAGED CARE
A for-profit brokerage company that acts as an agent who negotiates for a contract regarding how and when the provision of health care services will be accomplished is called:
a. Medicare. c. integrated health care system.
b. health service organization. d. managed care.
D: The above definition of managed care is not particularly positive or altruistic, but it does provide the basic tenets of the model. It is a business. It is for profit. It does negotiate contracts for care. The rationing of the care provided is a side effect of this health care model. MANAGED CARE
