Question

1-

The proportion of an insurance company’s premium income spent on provision of treatments is called the

	formulary.
	capitation per member per month.
	point of service.
	medical loss ratio.
	total premium

2-

Theoretically, the way managed care organizations can reduce total costs by taking the following approach(es)

	is to decrease intensity or quantity of services provided.
	is to decrease prices paid to providers.
	is to drive away small competitors, then force lower prices on all remaining hospitals.
	(a) and (b).
	(a), (b), and (c)

3-

The U.S. government subsidizes the private provision of health insurance through employers. Benefits paid to employees are deductible as expenses by firms, but not recognized as taxable income by employees. Consider two employees, Ann and Bob, who both receive $12,000 in insurance benefits for their family. Ann earns $30,000 and pays 15% in taxes. Bob earns $75,000 and pays 25% in taxes.

	The tax subsidy to Bob is the same as the tax subsidy to Ann.
	The tax subsidy to Bob is the greater than the tax subsidy to Ann. This is due to the regressive income tax structure.
	The tax subsidy to Bob is less than the tax subsidy to Ann. This is due to the regressive income tax structure.
	The tax subsidy to Bob is the greater than the tax subsidy to Ann. This is due to the progressive income tax structure.
	The tax subsidy to Bob is the less than the tax subsidy to Ann. This is due to the regressive income tax structure.

4-

Even in a clinic where physicians are more productive than registered nurses in both general patient counseling and specialty patient counseling, it is beneficial to the clinic to have physicians specializing in specialty patient counseling where they have an even greater advantage. The above describes which of the following:

	benefit from specializing in absolute advantage
	benefit from specializing in comparative advantage
	none of the above

Answer 1

1-
The proportion of an insurance company’s premium income spent on provision of treatments is called the
	formulary.
	capitation per member per month.
	point of service.
	medical loss ratio.	Correct	(MLR) is the percent of premium an insurer spends on claims and expenses on provision of treatments.
	total premium
2-
Theoretically, the way managed care organizations can reduce total costs by taking the following approach(es)
	is to decrease intensity or quantity of services provided.
	is to decrease prices paid to providers.
	is to drive away small competitors, then force lower prices on all remaining hospitals.
	(a) and (b).
	(a), (b), and (c)	Correct	MCO can reduce total cost by reducing price , decrease intensity or quantity of services provided and by establishing competitive price.
3-
The U.S. government subsidizes the private provision of health insurance through employers. Benefits paid to employees are deductible as expenses by firms, but not recognized as taxable income by employees. Consider two employees, Ann and Bob, who both receive $12,000 in insurance benefits for their family. Ann earns $30,000 and pays 15% in taxes. Bob earns $75,000 and pays 25% in taxes.
	The tax subsidy to Bob is the same as the tax subsidy to Ann.
	The tax subsidy to Bob is the greater than the tax subsidy to Ann. This is due to the regressive income tax structure.
	The tax subsidy to Bob is less than the tax subsidy to Ann. This is due to the regressive income tax structure.
	The tax subsidy to Bob is the greater than the tax subsidy to Ann. This is due to the progressive income tax structure.	Correct	Employer-sponsored insurance reduces taxable income, it is worth more to taxpayers in higher tax brackets than to those in lower brackets
	The tax subsidy to Bob is the less than the tax subsidy to Ann. This is due to the regressive income tax structure.
4-
Even in a clinic where physicians are more productive than registered nurses in both general patient counseling and specialty patient counseling, it is beneficial to the clinic to have physicians specializing in specialty patient counseling where they have an even greater advantage. The above describes which of the following:
	benefit from specializing in absolute advantage	Correct	It would be absolute  advantage   to have specialized physicians for speciality patient counclling
	benefit from specializing in comparative advantage
	none of the above