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Chapter 12: Economics of Health Care
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Chapter 12: Economics of Health Care
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Community Public Health Nursing 7th Edition Nies Test Bank
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Community Public Health Nursing 7th Edition Nies Test BankChapter 12: Economics of Health Care
Nies: Community/Public Health Nursing, 7th Edition
MULTIPLE CHOICE
1. Which is the best definition of economics?
a. Assets that can be traded for different assets
b. Income and outgo of monies
c. Science of allocation of resources
d. Study of goods, services, talents, and transportation
ANS: C
Economics represents the science of allocation of resources. Resources are goods or services.
The other definitions do not fully describe economics.
DIF: Cognitive Level: Understand (Comprehension)
2. A client living in the 1920s received health care services. Which would have been the most
likely form of payment?
a. Patients paid out of their pockets for whatever care the provider charged.
b. Public health employees gave care to those who needed it.
c. There was little health care to be had, regardless of a person’s wealth.
d. Workers who belonged to a union had their bills paid by insurance.
ANS: A
Until the 1930s, the predominant method of health care financing was self-payment. Health
care providers charged a fee N r tR
foU heSsIeN
rvG esBth.eC
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ndered, and the patient paid the
out-of-pocket expense. The assumption was that those who could pay would pay and those
who could not pay should receive care and pay what they could. Insurance companies did not
exist in the 1920s.
DIF: Cognitive Level: Apply (Application)
3. Which statement best describes what happened to health care providers during the Great
Depression?
a. The amount of charity care greatly increased.
b. Both hospitals and physicians went bankrupt.
c. Government funding was legislated to assist those in need.
d. Public health greatly expanded to care for those in need.
ANS: B
With 25% of the population out of work, the number of patients capable of paying their
medical bills was reduced. Because public financing was limited, hospitals, physicians, and
other providers went bankrupt. Because hospitals and physicians were going bankrupt, there
was no way to increase charity care or services for those in need.
DIF: Cognitive Level: Remember (Knowledge)
4. Why did employers decide to offer health insurance as an employee benefit?
a. Hospitals and physicians quit offering charity care to those who could not pay.
, Community Public Health Nursing 7th Edition Nies Test Bank
b. Society was focused on not having to pay for doctor visits and other needed health
benefits.
c. Teachers were role models for unions to demand insurance as a benefit.
d. To obtain and retain the limited number of persons available to work when
government rules prohibited raising wages, insurance was offered.
ANS: D
The idea of paying a small fee for guaranteed health care to have sickness cured was very
popular. Health care providers liked knowing they would receive payment for their services.
During World War II, faced with a limited workforce and governmental restrictions on wages,
employers began to see health insurance as a means of supplying workers’ benefits without
granting a wage increase. Teachers were not demanding insurance as a benefit. Hospitals and
physicians continued to provide charity care as they were able. Society understood that they
needed to pay for health services; however, businesses realized that providing insurance was a
way to keep their needed workforce.
DIF: Cognitive Level: Understand (Comprehension)
5. Which best describes a flaw of indemnity plans?
a. Blue Cross and Blue Shield had a great idea, but they went bankrupt.
b. Cost sharing was expected of Blue Cross and Blue Shield enrollees.
c. Enrollees could not choose their provider or manage their own care.
d. Plans lacked any incentives to contain costs.
ANS: D
Indemnity plans paid all the costs of covered services provided to the enrollee. The enrollee
enjoyed free choice of provider and services. They preserve the enrollee’s right of choice and
allow the person to manage hN isUoRheI
rS rNGnThBea.ltChOcaMre. These plans became very costly
ow
because there were no incentives for cost containment. Today, cost-sharing efforts (e.g.,
copayments, deductibles) help contain costs. Blue Cross and Blue Shield continue to be a
provider of health insurance.
DIF: Cognitive Level: Understand (Comprehension)
6. Which best describes the first government step in trying to stop constantly rising costs?
a. Insurance companies were told to cease adding new members to their plan.
b. Payment reimbursement was based on diagnosis and client characteristics rather
than on treatment given.
c. Physicians were limited to a maximum amount that would be paid for any
particular service.
d. Reimbursement was based on prospective payment, that is, in advance of
admittance for care.
ANS: B
The first efforts to control costs were made by the federal government when Medicare
hospital reimbursement was based on a prospective payment system. Payment would be based
on a classification system that identified costs according to diagnosis and client
characteristics. Restricting insurance companies to add new members to their plan was not
part of the first steps to try to stop constantly rising costs.
DIF: Cognitive Level: Understand (Comprehension)
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