University of South Carolina, Arnold School of Public Health, Dept. of Health Services Policy and Management, HSPM J712
Last modified Tuesday, 29th September, 2020, 01:19am


Second Exam

Due: December 11, 2012


Full credit is 48 points. For insurance, answer more than enough questions.

You do not have to answer all of the questions. You don't need that much insurance! Read over the whole exam first. Pick out the questions most interesting to you.

Question points   Answer should be about this long  
1 point One letter
6 points ½ to 1 double-spaced page, or about 140 to 275 words
(A little more than that is OK. Much less than that could cost you credit, unless you are very good at succinct writing.)

A 6-point answer will get full credit if you use the concept(s) correctly and cite readings or tutorials where appropriate. Mistaken or incomplete answers will get you partial credit.

Your 6-point answers should include some details. Facts and/or numbers. Give the impression that you have learned something.

When you cite readings for this exam, it is enough to give the first author's last name and the title. If the title is long, you can shorten it. For a web reference without an author's name, give a short title.

Please submit your completed exam on Blackboard.

Multiple Choice questions

(You asked for them! You got them!)

0. (1 point) Which of these countries has the more efficient health care financing system?

  1. Canada
  2. United States

00. (1 point) Prescription drug prices in the U.S. are:

  1. Too high
  2. Too low
  3. Just right

Essay questions

1. (6 points per section. There are five sections.) Blind men describe an elephant.

During this semester we have read quite a few different diagnoses for why the U.S. health care system uses so many resources but shows such mediocre results for the whole population. Like in the fable of the blind men describing an elephant, various commentators grab different aspects of our system and then say that fixing the problem they identify is the "key" to bringing spending under control without sacrificing the public's health. These diagnoses, and their associated cures, include:

  1. Americans have bad habits. We eat too much of the wrong foods; use too much alcohol, tobacco, and other drugs; do not exercise; and have unsafe sex. Therefore, the key to health reform is prevention programs.
  2. Our malpractice tort system is hugely costly and distorts the practice of medicine. Therefore, the key to health reform is to limit malpractice awards, limit lawyers' fees, and maybe move malpractice claims to special administrative courts.
  3. Doctors in some places do a lot of costly procedures and prescribe pricey drugs for which the benefits do not outweigh the risks. Therefore, the key to health reform is to reorganize the practice of medicine so doctors are in environments that encourage good practice.
  4. Health insurance makes it too easy for patients to get whatever care they please and ignore the cost. Therefore, the key to health reform is that everyone (except, maybe, the poor) should have an insurance policy with a high deductible. (For 3 points extra credit, what is the relevance of Reinhardt's "Chaos Behind a Veil of Secrecy" article?)
  5. Our hodge-podge of payment systems is costly for the insurers to administer. It imposes administrative costs on the providers. And it is burdensome to patients. Therefore, the key to health reform is to put everybody on Medicare.

Critically evaluate as many of these diagnoses as you wish. For each one you evaluate, how important is it, really? In other words, for each one, say about how much it can contribute to reducing total U.S. health care spending control. Also say if it is a promising way to improve the quality or appropriateness of our health care. Mention a relevant reading.

By the way, some parts of this question draw on material from the first half of the course.

Some of these are hard to evaluate definitively. For those, it will be enough for you to show that you understand the issues. Just be sure that you show me that you got ideas from the readings and are not just making things up.

2. (6 points) What are DRGs? Briefly explain how DRG-based payment works. In other words, what determines how much the hospital gets paid, when payment is by DRG? What happened to patient care and medical records after DRG payment was introduced?

3. (6 points) RBRVS

4. (6 points) Cost-shifting

How does "cost-shifting" work? Start with telling me how hospitals usually say it works. Then give me Reinhardt's argument in his "Is Medicare Raising Prices for the Privately Insured?" Oct. 16, 2009, Economix blog post. Then tell me what you think: Do private insurers pay more because the government pays less, or can the government pay less because the private insurers pay more? To put this question another way: Reinhardt asks, "Do private insurers function mainly as (a) purchasing agents for patients and employers or (b) collection agents for the providers of health care?" What does he mean by that, and what's your answer? You don't have to agree with Reinhardt to get full credit, but you do have to show that you grasp what he is saying.

5. (6 points) Managed care

What is managed care? How are the financial incentives on doctors in HMOs different from incentives under fee-for-sevice? Back when HMOs were a new thing, did HMO patients use the hospital less than fee-for-service patients? Do HMOs have a financial incentive to maintain the subscriber's health? What caused public backlash against HMOs?

6. (6 points) Administrative cost

7. (6 points) Patents and the Food and Drug Administration

  1. What is a patent?
  2. What do we have patents, from the standpoint of the public interest?
  3. How does FDA regulation of new drugs -- requiring proof of safety and efficacy -- affect the value of patents to the patent holder?
  4. Why does that matter to the public? (Hint: It has to do with innovation.)

8. (6 points) Pharmaceuticals

What would Marcia Angell and Malcolm Gladwell each do about growing spending on pharmaceuticals, if anything? That is my general question. Here are some particular ideas to consider: Angell uses strong language about drug prices, but what are her ideas for reform mainly about? Are they about controlling prices or are they mainly about how much of which drugs get prescribed? As for Gladwell, which does he think is more important, high prices or how much of which drugs get prescribed? Gladwell finishes his article with a challenge to Angell. How do Angell's later articles address that challenge?

9. (6 points) Insured and Uninsured in America

Which types of health insurance (public and private) have been expanding? Which types have been covering fewer people, and why? What has been happening to the number of uninsured people in the U.S.?

(6 additional points) Make up a slide show on an aspect of insurance or uninsurance. Use slides from Powerpoint offers a Notes section for each slide. Write something in the Notes for each slide that explains what I should learn from each slide, as if you were narrating the slides to a live audience. Five or six slides will do.

10. (6 points)

Write a page about the Affordable Care Act. What are the main ways that it will expand health insurance coverage? How much of the expansion in the number of insured will be because more people buy private insurance, and how much will be because more people get on Medicaid? What are some important new regulations on private health insurance? Will the Affordable Care Act eliminate underinsurance?

11. (6 points) Accountable Care Organizations

Write a page about the Accountable Care Organization idea. How are they supposed to improve quality or control cost? How do they differ from Health Maintenance Organizations? Any results so far?

12. (6 points) Primary Care Reform

Write a page about current ideas for primary care reform. What problems do the primary care reform ideas address? What is new in the new ideas? Any results so far?

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