Question 1

An economist is asked to choose an appropriate cost escalation index for long term care providers. Using an index that relied more on housing and employment cost indices than on technology cost increases would probably result in lower cost escalation than a more general hospital cost index.

Accepted Answer

A) True 
 B)False

Question 2

The full economic impact of nursing home certificate of need restrictions on a local economy is difficult to quantify because

Accepted Answer

A)   it is difficult to measure the opportunity cost of the real estate that could have been used for a nursing home.
B)   it is difficult to measure the opportunity cost to the Medicaid program of the patient per diem payment.
C)   fees for filing a CON application vary significantly from state to state.
D)   it is difficult to measure the opportunity cost of the caregivers who are financially uncompensated while caring for loved ones waiting for a nursing home space.
E)   more economic analysis is needed.F) C) and E)
G) B) and C)

Question 3

Payments to physicians from Medicare can be characterized as having reached which stage of a typical financial reimbursement cycle?

Accepted Answer

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.F) B) and E)
G) B) and C)

Question 4

Long term care insurance

Accepted Answer

A)   is not useful to the family of a policyholder.
B)   is just as popular as traditional indemnity type health insurance.
C)   cannot be purchased after age 65.
D)   is unpopular because financial benefits really accrue to the survivors, heirs and family members of the person receiving care, not the beneficiary.
E)   can be used to cover residence at selective over-55 living communities.F) A) and B)
G) A) and E)

Question 5

What are some of the difficulties in implementing case-mix adjusted payment schedule in nursing homes? What are the criteria used to determine a case-mix weight? What are the strengths and weaknesses of such a system?

Accepted Answer

In a fixed payment system, nursing homes...

Question 6

More than 10% of U.S. health care spending goes to nursing homes.

Accepted Answer

A) True 
 B)False  False

Question 7

Explain how the market for nursing home care is a two part market in which those who can afford to pay out of pocket subsidize those with less money who are dependent on Medicaid to pay for nursing home. It may be helpful to draw a graph of the market demand.

Accepted Answer

A student could draw Figure 10.3 in the ...

Question 8

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

Accepted Answer

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 homes 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.F) A) and C)
G) All of the above

Question 9

Use the concept of cost control by substitution to explain how the efforts to reduce healthcare costs by making cataract surgery an ambulatory surgery have actually increased Medicare spending on cataract surgery.

Accepted Answer

Providing incentives to reduce utilizati...

Question 10

Medicaid payments to nursing homes using a case-mix adjustment

Accepted Answer

A)   makes it harder for patients who are sicker to get care.
B)   is an effort to relate the cost of care with the severity of patients' needs.
C)   uses the DRG system of administered prices.
D)   always considers resource utilization groups (RUGs) .
E)   reflects certificate of need requirements.F) B) and E)
G) B) and D)

Question 11

Originally, Medicaid has been created to provide medical insurance for indigent women and children. Now, however, the majority of Medicaid expenditures are for the elderly.

Accepted Answer

A) True 
 B)False

Question 12

Middle and low income taxpayers benefit from several federal tax incentives to buy long term care insurance.

Accepted Answer

A) True 
 B)False

Question 13

The wealthiest group in America is in the age category of

Accepted Answer

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.F) A) and B)
G) A) and C)

Question 14

Long term care facilities covered by Medicaid include facilities for the mentally impaired and the permanently disabled.

Accepted Answer

A) True 
 B)False

Question 15

Payments to hospices from Medicare can be characterized as having reached the fourth stage of a typical financial reimbursement cycle: total cost control through global budgets.

Accepted Answer

A) True 
 B)False  False

Question 16

Home health care providers meet only functional and social needs of patients.

Accepted Answer

A) True 
 B)False

Question 17

Increasing demand for long-term care is associated with macroeconomic and demographic trends as well as individual life style choices. For instance, higher workforce participation by women has raised the opportunity cost of care giving.

Accepted Answer

A) True 
 B)False  True

Question 18

The case-mix reimbursement system for nursing homes may not be perfect because

Accepted Answer

A)   it provides nursing homes with incentives to admit only severely ill patients.
B)   it provides nursing homes with incentives to admit only less costly patients.
C)   even with differential payment rates, if differences in payment rate are not correctly matched with differences in cost, nursing homes may find it profitable to accept some patients while turning others away.
D)   when the state pays only a single fixed rate per day for nursing home care, it means that some patients may be denied care.
E)   with revenue per day fixed, a nursing home can increase profits by accepting only less costly patients who need very little care.F) A) and D)
G) C) and D)

Question 19

Long term care insurance

Accepted Answer

A)   pays more than 10% of U.S. nursing home and home health care bills.
B)   is widespread in the U.S.
C)   is popular because significant financial benefits go to the heirs of the individual who purchased the insurance.
D)   must be purchased so far in advance of anticipated need that savings become a good alternative to insurance.
E)   pays mostly for medical care, with less budget allocated to lifestyle choices, such as housing, food, social amenities.F) A) and E)
G) A) and D)

Question 20

Research shows that much more money is spent on medical care for the elderly today than 50 years ago. What is the likely reason? Do today's elderly tend to be sicker and more likely to be disabled than in prior years?

Accepted Answer

No, today's elderly tend to be healthier...

Exam 10: Long-Term Care

An economist is asked to choose an appropriate cost escalation index for long term care providers. Using an index that relied more on housing and employment cost indices than on technology cost increases would probably result in lower cost escalation than a more general hospital cost index.

Correct AnswerverifiedShow Answer

The full economic impact of nursing home certificate of need restrictions on a local economy is difficult to quantify because

Correct AnswerverifiedShow Answer

Payments to physicians from Medicare can be characterized as having reached which stage of a typical financial reimbursement cycle?

Correct AnswerverifiedShow Answer

Long term care insurance

Correct AnswerverifiedShow Answer

What are some of the difficulties in implementing case-mix adjusted payment schedule in nursing homes? What are the criteria used to determine a case-mix weight? What are the strengths and weaknesses of such a system?

Correct AnswerverifiedIn a fixed payment system, nursing homes...View AnswerShow Answer

More than 10% of U.S. health care spending goes to nursing homes.

Correct AnswerverifiedFalse

Explain how the market for nursing home care is a two part market in which those who can afford to pay out of pocket subsidize those with less money who are dependent on Medicaid to pay for nursing home. It may be helpful to draw a graph of the market demand.

Correct AnswerverifiedA student could draw Figure 10.3 in the ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Use the concept of cost control by substitution to explain how the efforts to reduce healthcare costs by making cataract surgery an ambulatory surgery have actually increased Medicare spending on cataract surgery.

Correct AnswerverifiedProviding incentives to reduce utilizati...View AnswerShow Answer

Medicaid payments to nursing homes using a case-mix adjustment

Correct AnswerverifiedShow Answer

Originally, Medicaid has been created to provide medical insurance for indigent women and children. Now, however, the majority of Medicaid expenditures are for the elderly.

Correct AnswerverifiedShow Answer

Middle and low income taxpayers benefit from several federal tax incentives to buy long term care insurance.

Correct AnswerverifiedShow Answer

The wealthiest group in America is in the age category of

Correct AnswerverifiedShow Answer

Long term care facilities covered by Medicaid include facilities for the mentally impaired and the permanently disabled.

Correct AnswerverifiedShow Answer

Payments to hospices from Medicare can be characterized as having reached the fourth stage of a typical financial reimbursement cycle: total cost control through global budgets.

Correct AnswerverifiedFalse

Home health care providers meet only functional and social needs of patients.

Correct AnswerverifiedShow Answer

Increasing demand for long-term care is associated with macroeconomic and demographic trends as well as individual life style choices. For instance, higher workforce participation by women has raised the opportunity cost of care giving.

Correct AnswerverifiedTrue

The case-mix reimbursement system for nursing homes may not be perfect because

Correct AnswerverifiedShow Answer

Long term care insurance

Correct AnswerverifiedShow Answer

Research shows that much more money is spent on medical care for the elderly today than 50 years ago. What is the likely reason? Do today's elderly tend to be sicker and more likely to be disabled than in prior years?

Correct AnswerverifiedNo, today's elderly tend to be healthier...View AnswerShow Answer

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In a fixed payment system, nursing homes...
View Answer

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False

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A student could draw Figure 10.3 in the ...
View Answer

Correct Answer
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Correct Answer
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Providing incentives to reduce utilizati...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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False

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True

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Correct Answer
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No, today's elderly tend to be healthier...
View Answer