US Health Care_Finals Practice Questions
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Johns Hopkins University *
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651
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Medicine
Date
Feb 20, 2024
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Test 1 1.
A hospital executive is worried that he will not meet 2020 targets under his hospital’s ACO contract. In planning for the next year, he hires people to help providers more fully document comorbidities that their patients face (without actually altering treatments). How might this change in coding impact the ACO’s likelihood of meeting its 2021 targets
and receiving an MSSP reward? Be specific.
a.
Documenting the medical complexity of the ACO’s patient population will increase the risk-adjusted benchmark target, increasing the likelihood that the ACO’s spending meets the target and receives the reward.
2.
An insurance executive is considering implementing a so-called “Value-Based Insurance Design” (VBID) approach in her company's plans. In this VBID model, what specifically would she direct the insurer to do for a drug that is considered high value for a given clinical scenario? How might this executive cite the RAND Health Insurance Experiment to support her decision?
a.
She would want the insurer to cover the drug that is considered high value for the clinical scenario and lower the patient’s copayment for the drug. The RAND Health Insurance Experiment would support her decision as a lowered copayment would result in higher utilization of the drug.
3.
As more insurers move towards using “pay for performance” in their contracts with providers, they can potentially use a mix of process-based measures and outcomes-
based measures. Identify one drawback of selecting process-based measures when evaluating physician performance. Similarly, identify one drawback of selecting outcome-based measures.
a.
Process-based measures do not directly give you a direct indication of health outcomes b.
Outcomes-based measures may lead to providers avoiding providing care to the sickest patients who may not attain those outcomes 4.
Classify each of the following four approaches to health policy as more likely to be favored by a Republican or a Democrat policymaker. a.
(A) Support for a public insurance option - Democrat
b.
(B) Support for transitioning Medicaid to Block Grants to states - Republican
c.
(C) Support for the initial creation of Medicare Advantage - Republican
d.
(D) Support for "play or pay" employer mandates. - Democrat
5.
Consider a higher-income patient enrolled in traditional fee-for-service Medicare Parts A
and B without any supplemental coverage who has an inpatient hospital stay for a surgery. Does she face a single deductible or two different deductibles?
a.
Two deductibles 6.
Consider a political candidate who is advocating for a public insurance option as part of her position on healthcare reform. On the campaign trail, she argues that a public option would be less expensive due to having lower administrative costs. Would relatively lower administrative costs increase, decrease, or not affect a plan’s Medical Loss Ratio (MLR)? Would a public option’s MLR tend be closer in magnitude to a large employer or a small employer? Briefly identify the way rules around MLR requirements changed with the passage of the ACA.
a.
Lower administrative costs increase a plan’s Medical Loss Ratio (MLR). A public option’s MLR would be closer in magnitude to a large employer’s MLR as large employers have lower administrative costs. The ACA set minimum MLR requirements of 80% for insurers in the individual and small group market and 85% in the large group market.
7.
Consider a politician advocating for a single payer model of healthcare. Which, if any, of the politicians’ arguments for a single payer system are NOT supported by existing models such as Canada’s healthcare system? (You may select more than one.)
a.
“A single payer system will decrease wait times for elective procedures.”
b.
“A single payer system will lower taxes.”
c.
“A single payer system will lower the number of uninsured.”
d.
“A single payer system will have lower drug prices.”
8.
Consider the current implementation of the Affordable Care Act’s Medicaid expansion. Does CMS withhold all federal Medicaid funding for states that have not expanded their Medicaid eligibility for adults? Why or why not?
a.
No – this was deemed coercive by the Supreme Court 9.
Employees at a PBM are deciding which drugs to have on its preferred formulary. In which of the following two scenarios is the PBM likely in the stronger position to negotiate discounts with the manufacturer(s)?
a.
When there is only one brand-name drug for a given common clinical indication b.
When there are multiple brand-name and generic drugs available for a given common clinical condition. Has the use of multiple tiers by PBMs for employer-based plans increased or decreased over time? This has increased over time 10. For an insurer operating in the individual market after 2014, which of the following four factors is it permitted to use in determining its premiums? Please select all that apply. a.
Gender
b.
Age
c.
Cancer diagnoses
d.
Tobacco use.
11. Identify which of the following four items may be considered as part of a nonprofit hospital’s community benefit dollars. (You may select more than one.)
a.
Allocating land to build a homeless shelter
b.
providing care for a patient who does not have insurance
c.
subsidizing healthcare for a burn unit
d.
uncompensated costs of educating medical residents.
12. Imagine that the RVS Update Committee decided to increase RVUs associated with cognitive (non-procedure) based office work and, correspondingly, decrease the RVUs associated with office-based procedures. How would you anticipate that this change would impact the relative incomes of primary care physicians versus surgical subspecialists? Would you expect this change to the payment rates to accelerate or decelerate the historical trend over time in the ratio of primary care physicians to specialists?
a.
Increase the incomes of PCPs relative to specialists. This would decelerate the historical trend.
13. In a “socialized medicine” paradigm, the government both finances and largely delivers healthcare. Among the United Kingdom, Canada, and Germany, which country has a healthcare system that is most in line with this “socialized medicine” paradigm? Which of these three countries has a healthcare system that is the least aligned with this paradigm?
a.
The UK
b.
Germany
14. In what ways was the ACA similar to Massachusetts’ health reform in 2006? Select all that apply out of the following four statements.
a.
Both relied on an insurance exchange to help people purchase private insurance plans
b.
Both provided financial assistance to help individuals afford private insurance plans
c.
Both passed with a Democrat head of government (i.e., President/Governor)
d.
Both had a “play or pay” mandate for employers.
15. One of the lectures began by differentiating the “level” of healthcare spending at a point
in time versus the “change” in healthcare spending over time. At the end of that lecture,
several examples were provided to illustrate that higher spending was not associated with better outcomes. Were these examples of inefficiency mainly considering levels of spending or changes in spending?
a.
Levels of spending
16. Recall that the ACA set up several tiers of insurance coverage: bronze, silver, gold, and platinum. Define “actuarial value” and how it is reflected in these tiers. Which of these tiers, if any, is used to determine a person’s tax credit within a particular geographic region? All other things being equal, which tier would most expect the sickest people to gravitate towards? Which risk mitigation provision remains in effect to help insurers with the potential consequences of adverse selection in the individual insurance market?
a.
Actuarial value is the percentage of total average spending of covered benefits that will be paid by a health insurance plan b.
Silver
c.
Platinum d.
Risk adjustment helps mitigate adverse selection 17. Recall the creation of the Children’s Health Insurance Program (CHIP) in the 1990s. What
is the specific mechanism that the federal government used to incentivize states to expand their Medicaid programs through CHIP? Did data from the 2000s indicate that a majority or minority of children who were uninsured were eligible for government-
funded health insurance?
a.
Enhanced FMAP
b.
Majority of children who are uninsured are eligible for government funded health insurance.
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18. The so-called “Cadillac Tax” was repealed on December 20, 2019. Consider a Senator who was arguing that the Cadillac Tax should have been repealed because the tax would
encourage employers to offer higher cost insurance options. Was this Senator’s argument consistent with what most health policy experts suggested? Provide a brief summary of the Cadillac Tax to indicate why or why not?
a.
Not consistent – this would have been a tax on employer-sponsored insurance premiums above a certain threshold. It would have led to lower cost plans to reduce or eliminate the tax
19. Which of the following four statements is true about geographic variation in health care as described by the Dartmouth Atlas? (You may select more than one.)
a.
Geographic variation in healthcare spending is well correlated with health outcomes
b.
Geographic variation for some types of surgical procedures is positively correlated with the number of specialists in the area who perform that procedure
c.
The intent of the Dartmouth Atlas is to illustrate the geographic variation primarily due to the age distribution and comorbidities of the underlying population
d.
The Dartmouth Atlas data is a detailed compilation of private insurers’ negotiated prices with hospitals and physicians.
20. Who are the four groups of low-income adults who have mandatory eligibility for Medicaid?
a.
Elderly b.
Disabled c.
Pregnant women d.
Parents Test 2 1.
Supreme Court rulings have been a constant part of the history of the Affordable Care Act. Some rulings have allowed the ACA to go forward while others have fundamentally transformed how the ACA has been executed. Which ruling was most significant in terms of shaping how the ACA has been executed and why?
a.
Putting all Medicaid funds at risk is coercive – changed the way the ACA was executed in that not all states implemented a Medicaid expansion in 2014. This gave states more of a choice.
2.
Hospital A, the largest hospital in the region, is planning to acquire Hospital B, the second largest hospital in the area. Hospital A’s spokesperson has argued that this merger will lower costs through economies of scale, improve quality through creating centers of excellence, and maintain patient access. Why might an insurer be concerned about the merger when it comes time for contract renegotiation with the hospitals?
a.
Insurer will be nervous that the hospital will renegotiate for higher rates since they will have more market power.
3.
Primary care physicians in the US earn substantially less than specialty care physicians in
the US. Do primary care physicians is the US earn more or less than primary care physicians in most other OECD countries?
a.
More
4.
Mr. Smith had an uncomplicated total knee replacement surgery and needs to go to a rehabilitation facility after hospital discharge. Under a bundled payment model, would Mr. Smith’s insurer typically pay a separate amount for her care at the rehabilitation facility? Why or why not?
a.
No – under a bundled payment model, all costs are incorporated into a single price and post-operative services are included up to a specified period of time. 5.
Is it necessary to have a doctorate in medicine (M.D.) to be a physician in the United States? Please explain.
a.
No – you can have a DO and be considered a physician 6.
Classify each of the following four approaches to health policy as more likely to be favored by a Republican or a Democrat policymaker.
a.
Support for a public insurance option - Democrat
b.
Support for Health Savings Accounts - Republican
c.
Support for ‘essential health benefits’ in health insurance plans - Democrat
d.
Medicaid as a “block grant” program rather than entitlement – Republican 7.
The “Medicare-for-all” rhetoric and policy proposals for reforming health care in the U.S. were an important part of the debate around the future of the US health care system over the past 2 years. There are daunting politics to reform the system in this way. Pick one
political barrier and explain why it you believe this will be the most difficult barrier to overcome.
a.
A main barrier would be moving Americans out of private insurance plans. This would mean that they do not get to keep their coverage, and insurance companies would resist this. This will be difficult to overcome because people will not want to give up their insurance. 8.
The ACA’s tax credit subsidies towards exchange plans are sliding scale subsidies to offset a portion of the premium for those that qualify for the subsidy so that the plans remain “affordable”. Name two key features of eligibility for the tax credit. For those that qualify for an ACA tax credit, if premiums in the ACA exchanges double, does the premium contribution from the beneficiary become less “affordable” for that beneficiary?
a.
Whether your employer offers you affordable insurance and your income
b.
A fixed-dollar tax credit equal to the difference between the second-cheapest silver plan and a affordable premium is equal to % of one’s income. The % varies from 2% to 9.5%. Therefore, the subsidy goes up and not the amount of money someone pays.
9.
Recall that the ACA set up several tiers of insurance coverage: bronze, silver, gold, and platinum. Define “actuarial value” and how it is reflected in these tiers. Which of these tiers is used to determine a person’s tax credit within a particular geographic region? Which plan in that tier is used to determine a person’s tax credit within a particular
geographic region? All other things being equal, which tier would you most expect the healthiest people to gravitate towards?
a.
10. Managed care contains costs by, among other things, managing the supply side of care. Which of the features below are often part of managed care because they can be effective in reducing national health care expenditure . a.
selective contracting (discounting of provider fees)
b.
favorable risk selection (attracting healthy customer to their plans)
c.
utilization review (limiting unnecessary care)
d.
large financial penalties for going out of network
11. Part 1 – What is the main source of revenue for the part of the Medicare program offering hospital insurance? Payroll tax Part 2 – How have the consequences of the COVID-19 pandemic affected this source of revenues for the Medicare program? Less funds available
Part 3 - In comparison to the same period in 2019, it likely that these funds have increased, decreased or remained relatively stable? Decreased 12. A 64 year old man, currently covered via employer-sponsored health insurance, is preparing to enroll in Medicare. He has a chronic condition and needs to take three drugs every day to keep it under control.
a.
Part 1- If this man decides to enroll in "Traditional" Medicare, how can he obtain drug coverage? He must opt into Medicare Part D b.
Part 2 – Under Medicare, which expenditures can this man expect to have in order to obtain the drugs he needs? Premiums and OOP payments or cost-
sharing 13. In the UK, the National Health Service is the source of health coverage for virtually everyone in the UK. In the US, the largest population groups are covered by Medicare, Medicaid, private insurance, or remain uninsured. For which two population groups in the US does coverage differ the most from the UK? Think about how health care is financed for the two groups of the US population that you mentioned above. [Hint = think back to Class 1]. What is the equity implication from relying on this type of revenue collection to fund health care services?
a.
Differences are the large portion of uninsured and the large portion of people with private insurance i.
These are very regressive forms of health financing (premiums and OOP payments)
14. A hospital is financed by a global budget. If the hospital has an unexpected decrease in the utilization of their services for a certain time period, what can be expected in terms of the hospital revenue during this period of time?
a.
Revenue would stay the same since the hospital can increase rates to maintain the budget
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15. Why are prices of comparable health care services generally lower in Germany when compared to the United States? Which of these systems results in higher administrative
costs? Why?
a.
Germany negotiates prices with regional provider associations and are fixed for all payers, which gives strong negotiating power to the payer relative to providers b.
IN the US, payers have less negoatiting power. c.
Not having centralized negotiation creates greater inefficiency in the US and leads to higher administrative costs 16. A pregnant 32 year-old single woman obtains prenatal care through the Medicaid program in her state. She is self-employed as a hairdresser and makes $16,000 per year. She currently needs physical therapy to manage sciatica pain developed in pregnancy. Because of COVID-19 she is considering to a different state. a.
Part 1 – what can this woman expect in terms of her Medicaid eligibility in the new state? Since her income is under 133% of the FPL, all states are required to cover her under Medicaid.
b.
Part 2 - what can this woman expect in terms of coverage for physical therapy in the new state? Physical therapy is an optional service and coverage may vary depending on the state.
HINT = 2020 FPL $12,760 for single individual
17. A mayor is concerned about the high number of uninsured children in their city. What would be the single, most impactful policy that this mayor could implement in order to reduce this problem? Why? Hint=assume that the characteristics of the children in this city are the same as shown in national statistics.
a.
Auto-enrollment of children in Medicaid
18. Assume that there are two equivalent drugs available in the US market. Drug 1 has list price of $800, and it offers a negotiated post-rebate price of $400 to insurers. Drug 2 has
list price of $450, and it offers a negotiated post-rebate price of $400 to insurers. Which of the drugs is the PBM most likely to choose to place in the insurer's formulary? Why?
a.
The PBM is likely to pick Drug 1 since it looks like they negotiated a huge price reduction and they will make more money off of it by including it in the formulary.
19. Assume that there are two equivalent drugs available in the US market. Drug 1 has list price of $800, and it offers a negotiated post-rebate price of $400 to insurers. Drug 2 has
list price of $450, and it offers a negotiated post-rebate price of $400 to insurers. If a patient is asked by their insurer to pay a coinsurance of 25% in order to obtain this drug,
which drug would the patient prefer to have placed in the formulary?
a.
Patient would prefer drug 2 because the list price is lower and would result in lower OOP costs for the patient.
20. The United States pays, on average, 3 to 4 times higher prices for the same drugs than other industrialized countries like the UK or Germany. What is one mechanism that helps bring down drug prices in the UK or Germany?
Given the current legislation and regulatory policies in place in the United States, could the FDA incorporate this mechanism to their drug approval process in order to decrease drug prices?
NICE - health technology assessment or cost-effectiveness
No the FDA is not allowed to take drug prices into consideration when approving a drug