Final_Answers_Posted_2023
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Cornell University *
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2350
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Medicine
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Apr 3, 2024
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PAM 2350 Final Exam
December 8, 2023
There are 100 points on the exam. Ask for a white book if you need more space to answer a question (label you answer carefully). You have 2.5 hours to complete the exam.
I. True/False: CIRCLE the correct answer [3 points each, for a total of 9]
1) True
False
A physician who loses 5 malpractice cases in his first 3 years of
practicing medicine will generally pay the same malpractice insurance premium in his 4
th
year as a physician who is never sued in her first 3 years of practicing medicine. 2)
True
False
According to the Feldstein and Melnick textbook, primary care
physicians represent a higher percentage of total physicians in European countries than in the United States. 3)
True
False
Germany and Japan both mandate that employers offer health insurance.
II. Multiple Choice: CIRCLE the correct answer [3 points each, for a total of 9]
4) Approximately what percentage of prescription drugs that begin Phase 1 testing are approved
by the Food and Drug Administration (FDA)? a.
12% (i.e., one out of eight)
b.
5% (i.e., one out of 20)
c.
2% (i.e., one out of 50)
5) Rank the following three according to how highly correlated income and mortality are (i.e., the
slope of the line between mortality and the poverty ranking of a county/region): Black
Americans, White Americans, Europeans:
[
1 point
for each correct answer. So, if somebody reverses the order of White and Black Americans, for example, they would receive 1 point total]
Lowest correlation
____Europeans____________
(flattest line)
Middle
____White Americans______
Highest correlation)
____Black Americans_______
(steepest line)
6) According to the Institute of Medicine, approximately how many hospital patients die in the
United States each year due to preventable medical errors?
a.
Between 50,000 and 100,000
b.
Between 500,000 and 1 million
c.
Between 5 million and 10 million
III. Short Answer [12 points each except for Questions #8 and #11, which are worth 11 points each].
Feel free to use bullet points and/or incomplete sentences in this section. 7) Consider a situation where the United States institutes a no-fault malpractice policy: patients harmed by medical care automatically receive compensation according to a schedule regardless of
whether it was due to negligence (e.g., $100,000 for impaired speech following surgery), and patients forfeit their right to sue physicians and hospitals for malpractice. How and why is this policy likely to affect: a) medical spending; b) the health of the population?
Medical spending -
Will reduce medical spending
because there should be less defensive medicine because providers won’t provide services in order to be sued (the definition of defensive medicine), because they can’t be sued in the proposed system. -
Will reduce
medical spending because the administrative costs
of the malpractice system will fall.
-
Do not get credit for saying medical spending will fall because there will be less spent on malpractice premiums, because that ignores how the no-fault insurance payments will be financed/paid for, which is by having MDs/hospitals pay fees into the fund.
-
Will have little effect
on medical spending because defensive medicine has been shown to be relatively unimportant.
Health of the population -
Will have little effect
on population health because defensive medicine is, by definition, services that the physician doesn’t believe will make the patient any better been shown to
be relatively unimportant, or there will be less defensive medicine but these services were
neither improving nor harming health.
-
Will worsen population health
because medical providers (e.g., physicians and hospitals) will have weaker incentives to avoid lawsuits (e.g., by improving their skills), which will lead to worse health outcomes.
-
Will improve
population health because medical providers (e.g., physicians and hospitals) will engage in less defensive medicine (i.e., provide fewer medical services), and these services may have been harming patients
.
8) A typical prescription drug takes about 8 to 10 years to reach its peak level of sales, and then its sales usually drop sharply after about 12 years on the market. Why do sales usually have these
two features: a long ramp-up period and a sharp drop?
Long ramp-up period: prescription drugs are an experience good
-- patients and physicians must try a drug before they know whether the drug works for patients. It takes
time for a biotech/pharmaceutical firm to market a product and convey information to physicians/patients regarding how well the drug works and/or its side effects.
Sharp drop: once a pharmaceutical firm loses its patent, generic firms enter and capture most of the sales/market share.
9) Of the following 3 countries, which has a health care system that is closest to the United States’ current system, and why: Canada, the United Kingdom, Germany? If the United States instituted a Medicare-for-All system, which of these 3 countries would it be closest to, and why? a)
Closest to the U.S. currently
-
Germany.
-
People can choose
a private health insurance plan, or sickness fund.
-
Both workers and employers contribute to the plan’s premium. -
Patients do not have to wait very long to receive medical care, or there is a lack of queues.
b)
Closest to a Medicare-for-All system
-
Canada.
-
All citizens are offered/given the same health insurance plan (the UK government provides medical care rather than insurance).
-
There is no available replacement plan, or people cannot opt out, or there is no private insurance that replaces the standard plan
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10) Evaluate the following statement: “Differences between Black Americans and White Americans in their income, insurance status, and where they live do not fully explain differences in their health. There must be other factors that explain some of the health disparity between these racial groups.” Provide evidence to support the first sentence and identify two
possible factors relevant to the second sentence.
Evidence to Support the First Sentence -
The “breast cancer study” (Ko et al., 2020) shows that “after controlling for income, education, insurance status, and other SES variables, Black patients were still 29% more likely to be diagnosed with Stage III cancer than white patients.” -
Or, in this study factors other than income, insurance status, or geography explain about one-half of the disparities in stage of cancer at diagnosis, and thus probability of survival.
-
The Morden study shows Black and White patients treated at the same
hospital received opioid different treatment for pain.
Possible Factors
to explain racial health differences (other than income, insurance, and geography) -
Racism
or racial discrimination
-
Implicit bias
among health care professionals
-
Poorer or less effective communication
between physicians and Black patients versus physicians and White patients (due in part to a less diversified workforce).
-
Less trust
between physicians and Black patients versus physicians and White patients (due in part to a less diversified workforce)
11) The Inflation Reduction Act (IRA) requires the U.S. government to negotiate prices of prescriptions drugs with manufacturers and is expected to reduce drug prices and save taxpayers $25 billion a year. Describe a scenario where this policy could end up making U.S. patients/taxpayers worse off.
-
pharmaceutical and biotech firms might invest less money to develop
new drugs, or might develop fewer drugs or not develop follow-on indications for already
approved drugs, or there will be fewer new drugs available, or there would be less R&D.
-
o
The value of the drugs that were not developed was high – they would have improved our health substantially.
o
Or, the value of the drugs that were not developed was higher than the cost savings to taxpayers.
12) Consider the following 3 quality measures: a) structure
: whether a hospital has the ability to provide customized discharge instructions to congestive heart failure patients so each patient knows how to treat their condition after leaving the hospital; b) process
: the percentage of a hospital’s congestive heart failure patients who received such instructions; c) outcomes
: the percentage of a hospital’s congestive heart failure patients who had to be re-admitted because their condition worsened after they were sent home from the hospital. For each of these 3 measures, provide one reason why it might be a valid/effective
way to measure the quality of medical care, and one reason why it might not be a valid/effective way
to measure the quality of medical care. Valid Measure
Not a Valid Measure
Structure
Structures provide the foundation
: should make it easier for providers to provide the recommended processes/medical care
Simple to measure
A good structure may not necessarily produce good processes or good outcomes (e.g., an EMR system/IT may not work well in practice)
Patients care about outcomes, not structures.
Process
Good processes should lead to good
outcomes, on average.
Providers can control whether to recommend a process, whereas they
can’t fully control whether the patient has a good outcome.
You don’t need to risk-adjusted process measures to account for differences in patient severity.
A provider can provide all the correct/recommended processes but the patient might still have a bad outcome.
Patients care about outcomes and not processes.
Outcomes
Outcomes are what patients ultimately care about.
Patient could have a bad outcome even
though all recommended processes were provided.
An MD’s patients may have bad outcomes because the MD treats sick patients.
Physicians could respond to outcomes measurement by avoiding the sickest patients.
A small sample size of patients would make accurate outcomes measurement difficult.
13) Consider the reform proposal that we discussed on the last day of the course that was recommended by three professors in 2023. They argue that all U.S. citizens should have access to a “basic bundle” of medical services at zero premium, paid for by income taxes. Relative to not allowing people to purchase optional, supplemental private health insurance plans in this system (i.e., with a basic bundle only), what impact would allowing these supplemental plans have on the following, and why?
a) total national medical spending
b) equity (i.e., people having the same access to medical services)
c) the probability that the reform proposal actually becomes law
a)
Total national medical spending: increase
medical spending because the supplemental plans would allow some people to receive coverage for extra services or otherwise encourage them to receive more services (e.g., by covering patient cost sharing or allowing patients to get to the front of the queue/line). Or, decrease/no change
in national
spending because allowing a supplemental plan allows policy makers to keep the basic plan small/narrow.
b)
Equity: worsen
equity because allowing supplemental plans would allow those with higher income to have better access to medical services.
c)
Becomes a law: increases
this probability because more people would be able to find their optimal health insurance plan/access to medical care.
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