Question 1

The nurse studying health care economics understands that a system that valued attaining competitive advantage as its primary goal would be classified as operating in the model of _____-sum competition.

Accepted Answer

Zero-sum competition is associated with profit maximization.In health care, this is done via limiting resources dedicated to patient care.Negative-sum competition is not an economic model.Normative-sum competition is not an economic model.Positive-sum competition creates value as its central goal.

Question 2

While studying health care economics, the nursing professor explains to a class that the economic principle of opportunity costs means that:

Accepted Answer

Making decisions to benefit others is not as common as making decisions based on self-interest.

Question 3

The student nurse knows that employer-sponsored health insurance was:

Accepted Answer

During the Depression, doctors and hospitals saw their revenue decline because people were not able to pay for health care.The American Hospital Association created Blue Cross of California in 1939 with the intent of securing income.Employer-sponsored health insurance came into existence during the Great Depression.The federal government did not create employer-sponsored insurance plans.Employer-sponsored insurance was not created as a temporary solution.

Question 4

A practicing nurse is interested in health care economics.To create an environment where health care more closely resembles the consumer market, this nurse would place high priority on activities revolving around:

Accepted Answer

In the consumer market, consumers have knowledge that allows them to dictate conditions.In the health care market, "consumers" often have much less information on which to base decisions about what to "buy." This violates a basic assumption of economics, so having more highly educated "consumers" would help to rebalance this situation.All nurses should have a basic understanding of the costs of health care, but this in itself does not address a difference in general economics and the economics of health care.Understanding payment options will not address a difference in general economics and the economics of health care.Using less expensive supplies may be a good idea if quality is not sacrificed, but this does nothing to address a difference in general economics and the economics of health care.

Question 5

An insurance company's internal statistics show that the company is losing a great deal of money processing small, frequent claims submitted by its customers.The company accountant suggests that the best way to decrease this loss is to:

Accepted Answer

Refusing to accept claims below a certain amount would probably be an unpopular action, perhaps leading to customers switching insurance companies.

Question 6

A health care practice has changed its mix of patients and now accepts fewer self-paying and more insured patients.The office manager tells the staff to anticipate:

Accepted Answer

When consumers carry health insurance, they become insulated from the cost of medical care, and the demand for health care services increases.Insured patients are not necessarily more-educated patients.Having more insured patients does not necessarily translate into the need for expanded hours and days of operation.Insured patients generally demand more health care services of all types, not just preventive care.

Question 7

In trying to understand current problems in today's health care environment, the nurse could reframe the discussion as a problem created by:

Accepted Answer

The U.S.health care system is a mix of market forces (based on equilibrium created through pricing mechanisms)and government entities (which should be based on egalitarian ideals).This mix of systems is primarily responsible for inequities in the health care system today.There are both for- and not-for-profit organizations operating in health care today.Not-for-profit status is a tax designation; all entities must make enough profits to continue operating.Redundancy in health care does exist, but it is not one of the root causes of its problems.Unchecked rises in fees were part of the reason managed care came into being, but this is not broad enough to reframe an entire concept.

Question 8

A chief nursing officer (CNO)is concerned about the ongoing nursing shortage and wants to implement strategies to keep it from getting worse.Which action by the CNO would best meet this goal?

Accepted Answer

Organizational attributes, including workload, management style, and opportunity for promotion, all figure into nurses' decisions to work.A career ladder provides a forum for promotion without competing for scarce management jobs.An across-the-board wage hike may attract and keep nurses, but research demonstrates that opportunities for promotion are more important for entering or remaining in the workforce, so this is not the best answer.Tuition reimbursement, similar to many other perks, may affect some nurses' work decisions; however, a specific perk may not be relevant to specific nurses' decisions about working.Holiday parties can contribute to a collegial environment, but research shows that other organizations characteristics are more important, including the availability of promotion.

Question 9

A nursing manager wants to be involved in activities that would systematically improve quality care.The manager would best accomplish this by:

Accepted Answer

Filling open positions is important to maintain quality in the hospital, but using temporary agency nurses is working from a crisis mode and not working toward long-term quality improvement.Policy groups do recommend a higher proportion of BSN-prepared nurses on staffs.However, this does not guarantee improved quality.Conflict-resolution skills are a great asset, but this does not address quality improvement.

Question 10

A nurse midwife has moved into town and wishes to establish a practice.Economically speaking, what could this nurse do that would best enhance her chances of establishing a successful practice?

Accepted Answer

Having costs that are lower than the competition will help bring in business according to the economic concept of substitutes.When two items or services are relatively equal in substance, an increase in the cost of one will drive up the demand for the other, which people will use as a substitute for the first item.By understanding the cost of physician care, this nurse can keep her prices low as the physicians raise theirs, leading patients to choose the midwife.Becoming affiliated with the busiest maternity group would not be the best choice; in a large group, the midwife might not have any control of overhead costs or decisions about how the practice is run or what to charge patients.Having low-interest loans will help the bottom line, but it would be more important to begin bringing in income.Locating offices near a hospital that has a lot of births may not be possible, and it may not lead to a successful business anyway.

Question 11

A chief nursing officer (CNO)wants to respond to a threatened reduction in nursing positions in a hospital where financial conditions are poor.Which action by the CNO would be best?

Accepted Answer

A nationwide comparison of nurse-patient ratios might yield important information, but information that is national in scope is easily dismissed as "someone else's problem" and might not convince administrators of the value of nursing care in this hospital.Hospital administrators are not elected to their positions, so political pressure probably would not garner the desired results.Cost-minimization strategies are rarely useful in health care settings because of the variability in interventions and outcomes.

Question 12

A nurse economist is explaining to a class that the health care market exists in a state of "market failure" because:

Accepted Answer

The economics of health care are unlike any other business sector.Demand for health care is not directly related to the quality and availability of services.Incomplete information by "consumers" and uncertainty related to the need for future health care result in a situation in which society cannot agree on an acceptable level of "output." This is known as market failure.It can be argued that health care today is not meeting demands, but this is unrelated to the concept of market failure.It may be true that more health care practices are failing economically in this market, but it is not related to the concept of market failure.Investment in the stock market is not related to market failure.

Question 13

At a rally for better health care coverage, a nurse hears someone say that government-sponsored health programs are inherently unfair.What statement best justifies this position?

Accepted Answer

Whereas healthy, middle-income people often pay more in taxes than they receive in benefits, the less affluent usually pay less than the value of the health care services they receive.Government activities have the ultimate accountability: the vote.Many people argue that taxes should not be used for anything other than running the government, but this does not get at the equity debate.In fact, if the government were not somehow involved in health care financing, there would be less equity because many individuals would have no way of paying for needed health care.Social security taxes are not deductible, but this affects everyone equally.

Question 14

A nurse realizes that nurse-run clinics demonstrate increasing economic value in nursing because they:

Accepted Answer

Based on the principles of stakeholder cooperation and emergent competition, nurse-run clinics are an example of increased economic value in nursing, because they fill an unmet need.Setting one's own wage or salary is definitely a perk, but this does not provide evidence of economic value.Economic competitiveness implies winners and losers and does not show system-wide value.Nurse-run clinics are a source of new job opportunities for nursing, but this is not related to demonstrating economic value.

Question 15

A state nurses association has convinced hospitals in that state to offer very attractive wage and benefits packages to nurses.To determine whether this strategy is working to provide a long-term solution to the nursing shortage, the association would measure the:

Accepted Answer

Wage increases can improve the nursing shortage by both short- and long-term methods.In the short term, nurses reenter the job market, work more hours, or add part-time nursing jobs.In the long term, the improved wages influence individuals in deciding to enter nursing school and join the profession.An improvement of vacancy rates would show that the increased wages and benefits have had a short-term effect on the nursing shortage in that state.Hospitals often use agency personnel to cope with nursing shortages, but this is a short-term solution.Working a second nursing job would help alleviate the nursing shortage, but this is considered a short-term mechanism.

Question 16

A nurse economist is explaining the principle of stakeholder cooperation as part of positive-sum competition to students.The student who understands this concept would paraphrase the concept as:

Accepted Answer

The principle of stakeholder cooperation says that over the long run, the interests of each group must be satisfied by the organization, and mutual support from all entities is needed for this to happen.Encouraging stakeholders to cooperate to allow continuous change corresponds to the principle of continuous creation.Giving stakeholders options in design and output of the system more closely relates to the principle of emergent competition.The principle of continuous creation states that entities cooperate with each other to create change and value.

Question 17

The nurse is explaining the American health care system to a patient from another country that has government-sponsored health care.The nurse would explain that one driving force for private insurance has been:

Accepted Answer

Most health care needs, other than those for preventive care, occur in an unpredictable manner and are costly enough that people cannot typically save or borrow enough money to pay for them.This led to the rise of private insurance.Private insurance was not created out of a demand from the consumer-driven marketplace.Rather, it was created from the uncertainty related to medical need.Private insurance and the lack of private insurance have contributed to what is essentially rationing of health care resources (not the other way around).People who are uninsured or underinsured often do not get the care they need.The federal government has been involved in health care at least since the 1960s.

Question 18

A nurse wishes to get a job in a large city with many hospitals from which to choose but is dismayed to learn that the wages for nurses are nearly as low in the city as in the rural area where the nurse lives.The nurse concludes that:

Accepted Answer

Although it is possible for a state government to mandate wage scales for nurses, it is not probable.Costs of living in the city and rural area might be comparable, but the larger number of hospitals in the city should equate to higher demand and therefore higher wages for nurses.

Question 19

A nurse performing a technology assessment understands that the results of the assessment will be used to:

Accepted Answer

Technology assessments are used to look at safety, effectiveness, and costs associated with technology, with the final outcome being decisions on resource allocation.A technology assessment is not used to compare different brands of equipment.A technology assessment does not evaluate equipment for its currentness.The technology assessment findings would not be used to distribute technology evenly across units.

Question 20

A nurse is explaining Medicaid and Medicare to a patient and describes the biggest difference in the programs as being the:

Accepted Answer

The waiting period for coverage is not a major differentiator between the two programs.

Quiz 7: Economic Issues in Nursing and Health Care