HCM 402 Economics for Healthcare Managers Unit 1: Chapter 1 || Questions and 100% Accurate Answers.
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HCM 402 Economics for Healthcare Managers Unit 1:
Institution
HCM 402 Economics For Healthcare Managers Unit 1:
Why is economics valuable for managers? correct answers 1. Economics helps managers focus on key issues.
2. Economics outlines strategies for realizing goals given the available resources.
3. Economics gives managers ground rules for strategic decision making.
4. Economics gives managers a frame...
HCM 402 Economics for Healthcare Managers Unit 1:
Chapter 1 || Questions and 100% Accurate Answers.
Why is economics valuable for managers? correct answers 1. Economics helps managers focus
on key issues.
2. Economics outlines strategies for realizing goals given the available resources.
3. Economics gives managers ground rules for strategic decision making.
4. Economics gives managers a framework making sense out of costs.
5. Economics gives managers a framework for thinking about value.
6. Economics sensitizes managers to fundamental ideas that affect the operations of every
organization.
What special challenges to healthcare managers face? correct answers 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
Cost correct answers The value of a resource in its next best use
Economics is a map for decision making correct answers 1. It suppresses what is not important
2. It highlights what is important
Marginal/Incremental correct answers Involving a small change from the current situation
Marginal/Incremental costs correct answers The cost of producing an additional unit of output
Rational Decision Making correct answers Choosing the course of action that gives you the best
outcomes, given the constraints you face
Economics analyzes the allocation of scarce resources correct answers True
Resource correct answers Something useful in consumption and production
Scarce correct answers has alternative uses
Limits to Rationality correct answers Management time is scarce
Complete rationality is irrational
Managers use decision shortcuts
Three Questions relevant to economics correct answers - What shall we produce?
- How shall we produce it?
- Who gets what we produce?
, What are major challenges for healthcare managers? correct answers 1. Insurance
2. Risk and uncertainty
3. Information asymmetry
4. Not-for-profit organizations
5. Technical and institutional change
Insurance as a challenge correct answers - Multiple "customers" (patient and insurer)
- Complex billing rules
- Dependence on a handful of insurers (Medicare, Blue Cross)
Ongoing Changes to Insurance correct answers - New Types (high-deductible plans, Individual
plans)
- New focus on costs
Risk and Uncertainty as a challenge correct answers - The usual uncertainties of business
(behavior of rivals, state of the economy)
Information Asymmetries as a challenge correct answers The party with more information has an
opportunity to take advantage of the party with less information; recognizing a disadvantage the
party with less information may become skeptical of the other party's motivation and decline a
recommendation that would be beneficial
Information Asymmetry definition correct answers When one party in a transaction has less
information than another
Adverse selection correct answers - High-risk consumers' willingness to pay more for insurance
than low-rick consumers
- Organizations that have difficulty distinguishing high-risk from low-risk consumers are
unlikely to be profitable
The special problems in healthcare with risk and uncertanty correct answers - Good luck/good
performance = good outcomes
- Bad luck/bad performance = bad outcomes
Who gets what we make? How will products be allocated? correct answers 1. Prices (if prices are
high, only those who are able to pay would receive product)
2. Waits (whomever was willing to wait for product)
3. Insurance coverage (if somebody else is paying for your product, would people be more
interested in getting product?)
4. Rules and Regulations (medications should be governed by rules and regulations, limiting the
population who may receive your product)
Information Asymmetries are common problems for correct answers 1. Supervisors and
subordinates
2. Professionals and clients
3. Insurers and customers
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