1. Many hospitals break out the payment for a radiologist’s service into two components: the radiologist’s time interpreting x-rays and the hospital’s charge for producing the x-rays. After doing so, they decide to contract out the service of producing the x-rays. This is most likely because

a) economies of scale exist in x-ray production.

b) diseconomies of scale exist in x-ray production.

c) cost shifting is possible.

d) radiologists historically have been able to price discriminate.

e) the hospital is more efficient at producing x-rays.

2. Which of the following tools has not yet been used to constrain growth in hospital costs?

a) price controls.

b) diseconomies of scale.

c) certificate of need legislation.

d) administered prices, as in DRGs.

e) budgetary review.

3. Economies of scale

a) might be more easily realized in an emergency room rather than a cardiac surgery unit.

b) depend on the spreading of minimal fixed costs over a number of procedures.

c) depend on the spreading of high variable costs over a number of procedures.

d) depend on the spreading of high marginal costs over a number of procedures.

e) depend on the spreading of high fixed costs over a number of procedures.

4. Payments to hospitals from private insurers can be characterized as having reached which stage of a typical financial reimbursement cycle?  

a) The First Stage: fees paid to trusted voluntary organizations.

b) The Second Stage: cost reimbursements.

c) The Third Stage: complex administered prices.

d) The Fourth Stage: total cost control through global budgets adjusted to match growth in GDP.

e) The Fifth Stage: start over.

5. Which of the following statements about the certificate of need legislation is false?

a) Patients benefit from the certificate of need legislation in the nursing home market, since CON legislation ensured incentives for nursing homes to provide high-quality care to attract more patients.

b) Current providers benefit from the certificate of need legislation in the nursing home market, as they face less competition from potential market entrants.

c) Taxpayers benefit from the certificate of need legislation in the nursing home market, since they have less nursing home to support through tax payments to Medicaid.

d) State regulators benefit from the certificate of need legislation in the nursing home market, as CON regulations reduced state Medicaid budgets.

e) Nursing home owners benefit from the certificate of need legislation in the nursing home market, as restricted entry into the market leads to excess profits.

6. The wealthiest group in America is in the age category of

a) 35 to 44 years old.

b) 45 to 54 years old.

c) 55 to 64 years old.

d) 65 to 74 years old.

e) 75 and older.