walden MGMT6695 week 2 quiz

Question
1

1.

Offering insurance coverage through an
optional rider would likely cause the most problems with adverse selection for
which condition?

Answer

		Prenatal care for pregnant women
		Stress reduction counseling for employees
		HIV/AIDS treatment
		Preventive dental examinations
		Policy covering accidents for children in daycare

1 points

Question
2

1.

Bill’s health insurance covers
preventive and cosmetic dental services, including orthodontic care, for
employees and their family members. Bill is willing to pay $30 per month for
over-the-counter teeth-whitening strips at the local pharmacy. With his co-pay,
he learns he can pay $25 per month and receive
professional teeth-whitening services at his dentist. He chooses to go to
the dentist for the service, which costs the insurance company $75 per month.

This is an example of adverse
selection. True or false?

Answer

True

False

1 points

Question
3

1.

An actuarial assistant at an HMO
presents graphs and charts of the number of colonoscopies performed per 1,000
patients by each doctor in its plan. This is an example of:

Answer

		Preadmission testing.
		Concurrent review.
		Retrospective review.
		Discharge planning.
		Database profiling.

1 points

Question
4

1.

Catastrophic medical expenses are
large, infrequent, and unpredictable. Risk aversion explains why people buy
insurance which covers such catastrophic events.

Answer

True

False

1 points

Question
5

1.

Health economists observe individuals’
willingness to pay not only by observing cash transactions, but also by
observing patients’ time spent waiting and/or pain endured to obtain medical
services. Examples of observable, non-cash prices paid by patients include all
of the following,except:

Answer

		A caretaker waits 9 months for a family member to receive nursing home care.
		A patient undergoes experimental cancer vaccine to arrest the growth of a tumor.
		A patient pays another patient $50 to trade places in the queue at the free clinic.
		An elderly patient waits 8 hours to see a doctor for free at a famous eye clinic.
		A morbidly obese patient must undergo 6 months of nutrition counseling prior to undergoing surgery to induce weight loss.

1 points

Question
6

1.

The Law of Large Numbers explains why
it is unlikely that the actuarially fair premium for an insurance policy will
be the same for a small start-up firm as it will be for a large employer such
as a university.

Answer

True

False

1 points

Question
7

1.

The demand for cosmetic surgery is more
elastic than the demand for Botox treatments. True or false?

Answer

True

False

1 points

Question
8

1.

If a dentist decides to lower the price
of teeth-whitening treatments, total sales (revenues) for treatments will go up
if:

Answer

		Excess supply for teeth-whitening services exists.
		Price elasticity is less than one.
		Price elasticity is greater than one.
		Excess demand for teeth-whitening services exists.
		Price elasticity of demand has changed.

1 points

Question
9

1.

Health Savings Accounts may contribute
to risk-sharing problems as younger, healthier, better-educated
individuals use HSAs as savings accounts. True or false?

Answer

True

False

1 points

Question
10

1.

Traditional fee-for-service (FFS)
payment plans of Medicare and Medicaid in the 1970s contributed to cost
escalation because:

Answer

		Physicians had incentive to provide more services.
		Patients had incentive to demand more care.
		Insurance companies had no incentive to contains costs.
		Government had no system-wide tools to reduce costs.
		All of the above.

Explanation & Answer

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