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Economics 436/530
Health Economics
Quiz #2
Professor Thornton
Winter 2017
On the answer sheet provided, write the letter that corresponds to the best answer. Each question is five
points.
1. The quality of a medical care service is the value of the characteristics of the service. Which of the
following do medical researchers not consider to be a characteristic of a medical care service when
evaluating quality?
a. Structural characteristics
b. Process characteristics
c. Need characteristics
d. Outcome characteristics.
2. Three studies of the quality of medical care in the U.S. healthcare system are: Institute of Medicine
Report: To Error is Human (1999), James Study (2013), and Makary et. al. Study (2016). How do
these three studies measure the quality of care?
a. Deaths that result from medical care.
b. Deaths that result from medical errors.
c. Diagnosis and treatment that is consistent with evidence-based guidelines.
d. Availability of diagnostic and treatment equipment in physician offices and hospitals.
3. A study by the McGlynn et al. published in 2003 estimated that 45% of patients receive either an
incorrect diagnosis or treatment. Which of the following did the study use to determine if a diagnosis
or treatment was correct or incorrect?
a. Evidence-based guidelines.
b. Art of medicine guidelines.
c. Whether a diagnosis or treatment injured the patient.
d. Whether a diagnosis or treatment was medically necessary or resulted in a financial gain for
the physician.
4. When doctors in Los Angeles went on strike for a month in 1976 to protest rising malpractice
insurance premiums, the patient mortality rate in Los Angeles decreased by 18% while they were on
strike. Which of the following is the most plausible explanation for this?
a. Underuse of medical care decreased during the strike.
b. Overuse of medical care decreased during the strike.
c. Misuse of medical care increased during the strike.
d. Medical intern use increased during the strike.
5. One cause of the relatively low quality of medical care is that doctors provide medical care services
that have no health benefit and may harm a patient. Which of the following has been given as a reason
for this type of behavior?
a. Scientific evidence does not exist for the effectiveness of many types of medical services.
b. Too many doctors use evidence based guidelines to make medical decisions.
c. Doctors rely too much on scientific studies of effectiveness that apply to an average
patient, not each individual patient.
d. Both b and c.
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6. In the U.S., before a new surgical procedure can be used to treat patients:
a. it must be approved by the FDA who requires evidence that it is safe.
b. it must be approved by the FDA who requires evidence that it is effective.
c. it must be approved by the FDA who requires evidence that it is both safe and effective.
d. it requires neither FDA approval nor evidence that it is safe or effective.
7. Each year about 700,000 arthroscopic knee surgeries are performed to treat osteoarthritis of the knee
and meniscal tears. Yet scientific studies find that this surgery has no positive effect on knee health
for an average or typical patient. Which of the following is the most plausible explanation of why
doctors perform these surgeries?
a. Many doctors do not practice evidence-based medicine.
b. Most doctors are not aware of these studies.
c. Most doctors don’t care if knee surgery improves a patient’s knee health.
d. Studies estimate that 90 percent of all patients are different from a typical patient.
8. Many experts believe that electronic medical records would increase the quality of care by:
a. reducing the amount of time a doctor is required to spend with a patient.
b. increasing the number of diagnostic tests doctors perform on patients.
c. increasing the amount of drugs doctors prescribe for patients.
d. making it easier for two or more doctors who treat the same patient to coordinate care.
9. Which of the following is a reason why the medical industry has been slow to adopt and use
information technology?
a. A national information technology network has a very high cost.
b. A number of doctors have resisted adopting information technology.
c. Doctors and hospitals have little financial incentive to invest in information technology
because it is typically not profitable.
d. All of the above.
10. Which of the following is not an initiative taken by the government since 2004 to promote the use of
medical information technology?
a. Congress passed the Health Information Technology Act of 2009
b. Congress passed the Medical Records Act of 2010.
c. Congress created the Office of the National Coordinator of Health Information Technology in
2004.
d. Medicare instituted a 4 year e-prescribing program in 2009.
11. Suppose you argue that we should extend health insurance to the uninsured because having health
insurance is a basic human right.
a. This is an economic argument for extending health insurance to the uninsured.
b. This is a fairness argument for extending health insurance to the uninsured.
c. This is a moral argument for extending health insurance to the uninsured.
d. This is an incontrovertible argument for extending health insurance to the uninsured.
12. The Rand Health Insurance Study done in the 1970s concluded that having a lower coinsurance rate
and therefore paying a lower out-of-pocket price for medical care results in:
a. utilization of more medical care and better health.
b. utilization of less medical care and worse health.
c. utilization of more medical care with no effect on health.
d. utilization of less medical care with no effect on health.
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13. Which of the following is not an objective of the Affordable Care Act?
a. To contain rising medical care spending and costs.
b. To improve the quality of medical care.
c. To increase medical care access.
d. To increase employment in the medical care industry.
14. Which of the following is a mechanism contained in the Affordable Care Act to extend health
insurance coverage to the uninsured?
a. Creation of an Independent Payment Advisory Board.
b. Expansion of Medicare to cover more lower income individuals.
c. Expansion of Medicaid to cover more lower income individuals.
d. All of the above.
15. Which of the following best describes a state health insurance exchange?
a. A state sponsored institution where doctors can exchange information about the type of
health insurance coverage a patient has.
b. An online market created by a state or the federal government where individuals and small
businesses can purchase health plans.
c. A forum for states to exchange ideas about how to improve health insurance coverage for the
uninsured.
d. A website that allows states to exchange information about the quality of health plans
provided by health insurance companies.
16. The Affordable Care Act:
a. requires health insurers to charge the same premiums to the young and elderly.
b. prohibits health insurers from including a deductible on health plans.
c. prohibits health insurers from denying a person insurance coverage for any reason.
d. All of the above.
17. The Affordable Care Act created and funded the Center for Medicare and Medicaid Innovation.
What is its purpose?
a. To develop and fund experiments to test new methods of paying doctors and hospitals, and
new medical delivery systems to increase the efficiency and quality of care.
b. To regulate Accountable Care Organizations.
c. To fund comparative effectiveness research to help doctors and patients to make better medical
decisions.
d. To make innovative policy recommendations to contain rising medical care spending and cost.
18. Preliminary results from the Medicare Accountable Care Organization (ACO) program indicate that:
a. ACOs are more effective at achieving quality criteria than lowering medical care cost.
b. ACOs are more effective at lowering medical care cost than achieving quality criteria.
c. ACOs are not effective at lowering medical care cost or achieving quality criteria.
d. ACOs are equally effective at lowering medical care cost and achieving quality criteria.
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19. Which of the following provisions of the Affordable Care Act is supposed to decrease the likelihood
of adverse selection on state health insurance exchanges?
a. Individual mandate to have health insurance.
b. Open enrollment period that restricts the period when insurance can be purchased on a state
health insurance exchange.
c. Subsidies to help people below a certain income level pay insurance premiums on health plans
purchased on a state health insurance exchange.
d. All of the above.
20. Which of the following statements about the Medicaid program is false?
a. Medicaid is the largest health insurance program in the U.S. covering more than 70 million
individuals.
b. The Oregon Health Insurance Study finds evidence that having Medicaid insurance results in a
large improvement in an individual’s health.
c. Many doctors don’t accept Medicaid patients because of the low payments they receive for the
services they provide to individuals with Medicaid insurance.
d. More than half of the newly insured from the Affordable Care Act are insured through
Medicaid.
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