1. If a price ceiling is to accomplish its intended goal of lowering overall spending, which of the following must be true?

a) Demand must be relatively price inelastic.

b) Demand must be relative price elastic.

c) Demand must be perfectly inelastic.

d) Demand must be perfectly elastic.

e) Price elasticity of demand has nothing to do with overall spending.

2. Which of the following statements is true concerning DRGs?

a) Soon after their implementation in 1983, the average length of stay in U.S. hospitals fell significantly.

b) Hospital operating margins fell dramatically immediately after implementation of the program.

c) The system encourages over-treatment of elderly patients.

d) The system encourages physicians to over-diagnose, referred to as DRG creep.

e) Both a and d are true.

3. The top 25 most frequently used DRGs accounted for approximately _______ percent of all discharges under Medicare.

a) 20.

b) 30.

c) 40.

d) 50.

e) 60.

4. One lesson that American policy makers can learn from the health care systems of other counties is

a) people must be willing to accept long waiting lists for expensive services.

b) a government-run system ensures equal access across socio-economic groups.

c) the importance of having a safety valve.

d) the mix between general practitioners and specialists is of little importance.

e) private insurance cannot complement government insurance.

5. Which of the following statements is true about the Canadian health care system?

a) Many Canadians travel to the U.S. in order to receive expensive treatments.

b) Canadians have the option of purchasing private health insurance if they can afford it.

c) Canadian physicians are salaries employees of the provincial health plans.

d) Canadian hospitals have significant excess capacity that is used to treat patients from foreign countries.

e) Canadian physicians are allowed to balance bill patients for certain high-cost procedures.

6. When medical fee schedules are negotiated by two monopolists one representing patients and one representing providers the equilibrium medical fees will

a) be greater than fees determined in a competitive market.

b) be less than fees determined in a competitive market.

c) be greater than fees determined by provider groups alone.

d) be less than fees determined by patient groups alone.

e) depend on the relative bargaining strengths of the two groups negotiating the fee schedule.

7. The French respect individual freedoms even as they accept collective action to reach important national goals of social solidarity and equality. What has been the major cost of a government-run system in France?

a) The long waiting lists of expensive medical services.

b) The high out-of-pocket spending with over 80 percent of the population purchasing supplementary private insurance.

c) An erosion of the incomes of physicians relative to those of the average wage and salary worker.

d) An erosion of physician autonomy in making treatment decisions.

e) Both b and c are true.

8. This study was the catalyst for the early 20th century reform of medical education in the United States. What was it?

a) Coolidge Commission.

b) Hill-Burton Committee.

c) Mangrum Report.

d) Flexner Report.

e) Kaiser Foundation Study.

9. In the 19th century hospitals had notorious reputations questionable places to visit, risky places to stay. What advances changed all this?

a) Development of the germ theory of disease.

B) Advances in medical technology.

C) Availability of health insurance to pay the bills.

D) All of the above.

10. The dominant factor affecting medical care delivery and finance in the 1960s was

a) the Hill-Burton Act.

b) prospective payment for hospitals.

c) the creation of Medicare and Medicaid.

d) the explosive growth of managed care.

e) the passage of ERISA.

11. The dominant factor affecting medical care delivery and finance in the 1980s was

a) the Hill-Burton Act.

b) prospective payment for hospitals.

c) creation of Medicare and Medicaid.

d) the explosive growth of managed care.

e) ERISA.