Chapter 05: Economics of Health Care Delivery Nursing School Test Banks

Stanhope: Public Health Nursing, 8th Edition

Chapter 05: Economics of Health Care Delivery

Test Bank

MULTIPLE CHOICE

1. The allocation of scarce resources within the health care sector and the focus on resource allocation issues related to producing and distributing health care is called:
a. Economics
b. Health economics
c. Economic evaluation of health care
d. Microeconomic theory
ANS: B
Health economics is the allocation of scarce resources within the health care sector and the focus on resource allocation issues related to producing and distributing health care.

DIF: COG: Remembering REF: 100 OBJ: 1

2. Public health economics focuses on the:
a. Use of resources
b. Availability and usage of goods and services related to public health
c. Scarcity of resources in the health care industry
d. Management and use of monies to improve the health of populations
ANS: B
Public health economics focuses on producing, distributing, and consuming goods and services related to public health.

DIF: COG: Understanding REF: 100 OBJ: 1

3. Which statement regarding poverty and health insurance is true?
a. Millions of people in the United States are without health insurance.
b. The poor in the United States are as healthy as persons with higher incomes.
c. Persons with money or health insurance are less likely to seek health care.
d. The poor are more likely to receive health care through private agencies.
ANS: A
In the United States, 49.4 million people are without health insurance. The poor in the United States are generally not as healthy as persons with middle or higher incomes. Persons with money and/or health insurance are more likely to seek health care. The poor are less likely to receive health care through private agencies.

DIF: COG: Understanding REF: 99 OBJ: 1

4. Implementation of a teen pregnancy prevention program in a high school is shown to decrease the rate of teen pregnancy. This is an example of:
a. Effectiveness
b. Efficiency
c. Microeconomics
d. Production
ANS: A
Effectiveness refers to the extent to which a health care service meets a stated goal or objective, or how well a program or service achieves what is intended.

DIF: COG: Applying REF: 102 OBJ: 1

5. Which is an example of a service offered at the federal government level?
a. Family planning
b. Counseling
c. Policy making
d. Prevention of communicable diseases
ANS: C
Policy making is offered at the federal level. Family planning, counseling, and preventing communicable and infectious disease are offered at the state and local levels.

DIF: COG: Applying REF: 100 OBJ: 1

6. Conducting a class at a public health clinic on breast self-examination to a group of 50 women is an example of:
a. Supply and demand
b. Market
c. Efficiency
d. Effectiveness
ANS: C
Efficiency refers to producing maximum output, such as a good or service, or using a given set of resources or inputs, such as labor, time, and available money. Teaching one topic to many people is an example of this.

DIF: COG: Applying REF: 102 OBJ: 1

7. Nurses can promote efficiency by:
a. Evaluating how well a program of service achieves what was intended
b. Trying new products provided by sales representatives
c. Using time wisely by delegating non-nursing tasks to unlicensed care providers
d. Setting up a clinic to look aesthetically pleasing to clients
ANS: C
Efficiency relates to producing maximal output given a set of resources. Using time wisely through delegation is the best example of using efficiency.

DIF: COG: Analyzing REF: 102 OBJ: 1

8. When a business offers wellness incentives to its employees and then notices a decrease in the frequency of physician visits among employees, this is an example of:
a. Macroeconomic theory
b. Efficiency
c. Supply and demand
d. Microeconomic theory
ANS: D
Microeconomic theory is examining the behaviors of individuals and organizations that result from trade-offs in utility and budget constraints of health care.

DIF: COG: Applying REF: 101 OBJ: 2

9. Nurses should be cognizant of microeconomics because:
a. Nurses are often the ones to allocate resources to solve a problem.
b. Nurses are often involved in federal policy making.
c. Nurses should know about microeconomics in order to deliver quality patient care.
d. Health care supplies can be very costly and nurses must use them wisely.
ANS: A
Nurses often allocate resources, design, plan, coordinate, and evaluate community-based health services.

DIF: COG: Analyzing REF: 103 OBJ: 2

10. Evaluating a smoking cessation program, the gained or increased financial income, the improvements in the community attributable to the program, or costs that would result if the program was not given are examples of:
a. Cost-effectiveness analysis
b. Cost-benefit analysis
c. Supply and demand
d. Microeconomic theory
ANS: B
Cost-benefit analysis involves the listing of all costs and benefits that are expected to occur from an intervention during a prescribed time.

DIF: COG: Analyzing REF: 103 OBJ: 2

11. Supply and demand is illustrated when:
a. The demand for nurses in public health is low, but the supply is high
b. Few goods or services are available, the price tends to rise
c. Supplies are low, nurses must find alternate resources
d. Lesser-developed countries receive supplies from other countries
ANS: B
Supply and demand is in force when few goods or services are available, and then the price tends to rise.

DIF: COG: Analyzing REF: 101-102 OBJ: 2

12. An example of a macroeconomics issue faced by nurses is:
a. The evaluation of client access to services
b. A health policy that makes the development of a new program possible
c. Informing clients and others of the cost of service
d. The referral of clients to available services
ANS: B
Macroeconomics focuses on the big picture, such as a program, whereas microeconomics focuses on the individual or organization.

DIF: COG: Analyzing REF: 102 OBJ: 2

13. Nurses working with aggregates would apply the macroeconomic theory because they are concerned with the:
a. Factors that determine prices and affect resource allocation
b. Positive effect of competitiveness on health care costs
c. Supply, demand, and costs of services available to their clients
d. Policies to support programs to improve the health of the community
ANS: D
Macroeconomics focuses on the big picture, which is policy, whereas microeconomics focuses on the individual or organization.

DIF: COG: Evaluating REF: 102 OBJ: 2

14. Which characteristic has the greatest effect on health?
a. Obesity
b. Marital status
c. Health insurance
d. Age
ANS: A
Personal behavior/lifestyle (obesity) has the greatest effect on health. Environmental factors (marital status) and human biology (age) are next followed by the health care system (health insurance).

DIF: COG: Applying REF: 105 OBJ: 3

15. Which individual would most likely experience a barrier when accessing health care?
a. A 40-year-old female who speaks English
b. A 25-year-old female with health insurance
c. A 50-year-old male with hypertension
d. A 30-year-old male who is unemployed
ANS: D
Barriers to accessing care include the inability to afford health care, lack of transportation, physical barriers, communication problems, child care needs, lack of time or information, or refusal of services by providers. The unemployed male is most likely to experience a barrier because of not having a job, which may reduce his access to health insurance and limit his income.

DIF: COG: Analyzing REF: 105 OBJ: 3

16. Which person is most likely to be uninsured?
a. An 82-year-old woman with chronic medical problems
b. A 2-year-old whose mother is on welfare
c. A 50-year-old businessman who works for a large corporation
d. A 32-year-old man who works part-time at a small business
ANS: D
The typical uninsured person is one who works at a low-paying job, part-time or temporary, or at a small business. The elderly person would be eligible for Medicare, and the 2-year-old is probably eligible for Medicaid. The man who works at the large corporation probably has health insurance, since most large businesses provide it.

DIF: COG: Analyzing REF: 104 OBJ: 3

17. Which was considered the first national health insurance plan in the United States?
a. HMO Act
b. Marine Hospital Service
c. Medicare
d. Medicaid
ANS: B
The Marine Hospital Service was created in 1798 by the federal government to provide medical service for sick and disabled sailors and to protect the nations borders against the importing of disease through seaports.

DIF: COG: Remembering REF: 114 OBJ: 4

18. The first phase of development of the health care system was characterized by:
a. The rise in technology
b. Epidemics of infectious disease, such as typhoid, influenza, and malaria
c. Physicians and nurses who attained their skills in scientifically-based programs
d. An expansion of hospital clinics and long-term care facilities
ANS: B
Phase one was concerned with epidemics and infectious disease control. Technology is characteristic of phase four, and physicians and nurses attained skills in scientifically based programs in phase two. Phase three included the expansion of hospital clinics and long-term care facilities.

DIF: COG: Understanding REF: 107 OBJ: 4

19. A characterization of the fourth developmental stage of the health services delivery framework is:
a. Nurses in the United States being predominantly women
b. The expansion of the number and type of health care facilities
c. Dependence on technology for patient care
d. The discovery and development of pharmacological advances
ANS: C
Nurses have become dependent on technologies to monitor client progress, make decisions about care, and deliver care in innovative ways.

DIF: COG: Understanding REF: 109 OBJ: 4

20. Which statement about the Medicare program is accurate?
a. Part A provides coverage for hospitalization.
b. Part A requires payment of a monthly premium for coverage.
c. Part B provides payment for home health services and extended care facilities.
d. Part B is available without cost to all elderly people who have paid social security taxes.
ANS: A
Medicare Part A covers hospital care, home care, and skilled nursing care. Medicare Part B is a supplemental program available to all Medicare-eligible persons for a monthly premium.

DIF: COG: Understanding REF: 115 OBJ: 4

21. Medicare and Medicaid are:
a. Available to any citizen who wishes to enroll
b. Two federal programs that provide insurance to special groups
c. Private insurance providers
d. Funded by the state government
ANS: B
Medicare provides insurance for persons over 65, and Medicaid is for low-income and needy children, aged, blind, and/or disabled. Medicare is financed by the federal government. Medicaid is jointly financed by states and the federal government. They are not private insurance providers by definition.

DIF: COG: Understanding REF: 115 OBJ: 4

22. A Medicare recipient has elected to pay a monthly premium for Medicare that will cover expenses, such as laboratory services and equipment. This part of Medicare is called Medicare Part:
a. A
b. B
c. C
d. D
ANS: B
Medicare Part B is a supplemental (voluntary) program; it provides coverage for services that are not covered by Part A, such as laboratory services, ambulance transportation, prostheses, equipment, and some supplies.

DIF: COG: Applying REF: 115 OBJ: 4

23. A person with end-stage kidney failure who is on dialysis is eligible for:
a. Medicaid
b. Blue Cross
c. Medicare
d. HMO
ANS: C
Medicare is available to anyone on dialysis regardless of age.

DIF: COG: Applying REF: 115 OBJ: 4

24. Which individual would most likely receive Medicaid services?
a. An 85-year-old female who has hypertension
b. A 25-year-old female who is pregnant
c. A 50-year-old male who is blind
d. A 70-year-old male who is hearing impaired
ANS: C
Medicaid provides financial assistance to states and counties to pay for medical services for the aged poor, the blind, the disabled, and families with dependent children who are below state poverty income levels.

DIF: COG: Analyzing REF: 116 OBJ: 4

25. Which service would be covered under Medicare Part A?
a. Blood draw to assess PT/INR
b. Physical therapy visit
c. Stay in skilled nursing facility
d. Transportation by an ambulance
ANS: C
Medicare Part A covers hospital care, home care, and skilled nursing care.

DIF: COG: Analyzing REF: 115 OBJ: 4

26. When a health care organizations fees for delivery of services are not decided until after they are provided, it is called:
a. Retrospective reimbursement
b. Prospective reimbursement
c. Fee-for-service
d. Capitation
ANS: A
Retrospective reimbursement is the method whereby fees for the delivery of health care services in an organization are set after services are delivered.

DIF: COG: Understanding REF: 120 OBJ: 5

27. When a third-party payer establishes the amount of money that will be paid for the delivery of a particular service before offering the service to the client, it is called:
a. Retrospective reimbursement
b. Prospective reimbursement
c. Fee-for-service
d. Capitation
ANS: B
Prospective reimbursement is the method of paying an organization whereby the third-party payer establishes the amount of money that will be paid for the delivery of a particular service before offering the services to the client.

DIF: COG: Understanding REF: 120-121 OBJ: 5

28. Which statement about the reimbursement of health services for nurses is accurate?
a. Reimbursement for health care services can be directed only to physicians.
b. Nurse practitioners and clinical nurse specialists are reimbursed for Medicare Part B services.
c. Nursing care is a separate budget item in determining hospital service costs.
d. Nursing care is reimbursed separately from medical care in outpatient settings.
ANS: B
This became effective January 1, 1998, under Public Law 105-33.

DIF: COG: Understanding REF: 122 OBJ: 5

29. A physician receives a set amount of money to provide care to a given group of clients for a set period of time. This is an example of:
a. Retrospective reimbursement
b. Prospective reimbursement
c. Fee-for-service
d. Capitation
ANS: D
Capitation describes the practice of paying physicians and other practitioners a set amount to provide care to a given client or group of clients for a set period of time and amount of money. This is similar to prospective reimbursement for health care organizations.

DIF: COG: Applying REF: 121 OBJ: 5

30. An employee is able to receive health insurance from a former employer after changing jobs because of the:
a. Health Insurance Portability and Accountability Act (HIPAA)
b. Omnibus Budget Reconciliation Act
c. Balanced Budget Act of 1997
d. Social Security Act
ANS: A
HIPAA is a federal intervention to protect health insurance coverage for workers and families following a job change or loss.

DIF: COG: Applying REF: 114|119 OBJ: 5

31. An example of managed care is:
a. Medicare
b. Medicaid
c. Medical savings accounts
d. Health maintenance organizations
ANS: D
Health maintenance organizations and preferred provider organizations are types of managed care.

DIF: COG: Applying REF: 120 OBJ: 6

32. A public health nurse is counseling a client who is trying to determine if a health maintenance organization (HMO) or preferred provider organization (PPO) will provide the better health care coverage. One main difference between these two types of managed care arrangements is:
a. HMOs provide comprehensive care to its members for a fixed fee.
b. PPOs designate providers that members can choose.
c. PPOs employ physicians as PPO employees.
d. HMOs provide financial incentives to encourage members to select HMO providers.
ANS: A
The HMO is a provider arrangement whereby comprehensive care is provided to members for a fixed per member per month fee. A PPO uses predetermined rates for services to be delivered to members. HMOs have multiple models of delivery including the staff model, where physicians are HMO employees. PPOs provide financial incentives to encourage members to select PPO providers.

DIF: COG: Analyzing REF: 120 OBJ: 6

33. An example of primary prevention is:
a. A smoking cessation program
b. Radiation therapy for lung cancer
c. Care at a long-term care facility
d. Hospice care
ANS: A
Primary preventions aim is preventing disease. Radiation therapy, a long-term care facility, and hospice are secondary or tertiary care examples.

DIF: COG: Applying REF: 105 OBJ: 7

MULTIPLE RESPONSE

1. Factors that influence health care costs include (select all that apply):
a. Technology and intensity
b. Demographicsthe aging population
c. Chronic illness
d. Use of the health care system
ANS: A, B, C
All but the last option influence health care costs. The fact that individuals have, over time, consumed more health care is not an adequate explanation.

DIF: COG: Understanding REF: 111-112 OBJ: 3

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