MHA 710 Exam 1 | 109 Questions with 100% Correct Answers | Verified | Latest Updated 2024 | Graded A+

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 costeffective 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 lowrisk 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 customersHow 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 multidisciplinary measurement of heart failure. Interventions with the least includecolonoscopies for african american men who are 81 or 76 and multidisciplinary heart failure measurement with exercise. How does healthcare spending per person in the US compare to other countries? - US spends far more per person on healthcare than any other large countries. How does US life expectancy at birth compare to other countries? - 27 out of 34 of the OECD countries (bad!) Has the US achieved the same increases in life expectancy relative to their changes in spending as in other countries? - From one perspective, this increase in life expectancy reflects impressive performance. From another, it does not compare well to the performance of other industrialized countries. For example, French life expectancy at birth rose from 79.2 years in 2000 to 82.4 years in 2015, and costs increased less than half as much in France as in the United States Why might we want to measure healthcare spending as a share of GDP instead of just healthcare spending per person? - What appears to be higher spending, however, might just be the effects of inflation. To avoid inaccuracies resulting from changes in the value of money, economists use two strategies. The simplest and most reliable strategy to report spend-ing uses shares of national income, or gross domestic product (GDP). T