University of South Carolina, Arnold School of Public Health, Dept. of Health Services Policy and Management, HSPM J712
Last modified Monday, 22nd November, 2010, 09:00am

HSPM J712

Second Exam

Due: December 8, 2010

Instructions

Full credit is 40 points. For insurance, answer more than enough questions.

There are more than 40 points worth of questions here. You do not have to answer them all! You don't need that much insurance! Read over the whole exam first. Pick out the questions most interesting to you!

An 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.

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

0. (1 point) Which of these countries has the more efficient health care 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. (5 points) DRGs

• What are DRGs?
• Which health care providers get paid by DRGs in the U.S.?
• What is one way that DRG-based payment encourages (or is supposed to encourage) a more efficient use of social resources than does fee-for-service payment?
• What is one way that DRG-based payment encourages a worse use of social resources? Cite a reading in your answer to this part. (In this part, like the one above, I'm looking for changes in how hospitals operate. This is not about how hospitals might try to game the payment system. One reading I'm thinking of was assigned for the class about Cost in September. The DRG slideshow mentions some other articles that I did not assign for you to read. However, you can cite one of them anyway if you like.)

2. (5 points) RBRVS

• What does RBRV stand for?
• RBRVS was designed for the payment of which health care providers?
• What components of cost go into calculating the RBRV of a particular procedure?
• If RBRVS had been implemented as described in Hsiao's articles, which providers would have gained the most? Which providers would have lost the most? (Assume for your answer that RBRVS was implemented so that the total amount paid out did not change.)

3. (10 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.

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 to put a lot of money into public health education programs. (Like the ones we run! Ha! Ha!).
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 move malpractice claims to special administrative courts.
3. Too many of us have no health insurance ("uninsured") or have insurance that does not protect us well ("underinsured"). Therefore, the key to health reform is to give everybody a reliable health insurance policy.
4. Some doctors 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.
5. 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 should have an insurance policy with a high deductible, unless he or she is poor or has a bad chronic ailment. (For 2 points extra credit, what is the relevance of Reinhardt's "Chaos Behind a Veil of Secrecy" article?)
6. 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.

Your job is to critically evaluate two to six of these diagnoses. (Or others, if you can think of them.) 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 has promise to improve the quality or appropriateness of our health care. If there is a reading that advocates this diagnosis or is helpful for evaluating it, mention the reading.

Score 5 points for each one you do.

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.

If you do all six, then, for a 10-point bonus, which will get you to 40 points for this question alone, finish with from two sentences up to ½ page about which one of these is, or which two of these are, actually the most important "key" or "keys" and why.

5. (10 points) Administrative cost

• What portion of U.S. health care spending goes for administration?
• How is that estimated in one article in our readings? That is, what is included in total "administrative cost"? Does total "administrative cost" include more than what insurance companies spend on administration?
• How does the administrative cost of private health insurance in the U.S. compare with the administrative cost of Medicare, a government program?
• How does the U.S. compare with Canada (or Switzerland, Germany, France, Japan, or Taiwan) in total administrative cost?
• Are we saying that all adminstrative cost is bad? If not, then what is the issue with administrative cost?

1. (2 points if you do this part only) How well does the U.S. medical malpractice torts system do at identifying actual medical malpractice and efficiently compensating its victims? Cite a reading.
2. Critically evaluate the claim that malpractice tort reform -- specifically, limits on the right to sue -- is a crucial step to controlling health care costs. Cite a reading.

7. (10 points) Pharmaceuticals

What would Marcia Angell and Malcolm Gladwell each do about growing spending on pharmaceuticals, if anything? Gladwell, as you know, is critical of Angell. But is there also some commonality? Though Angell uses strong language about drug prices, are her ideas for reform mainly about price or mainly about how much of which drugs are sold? As for Gladwell, which does he think is more important, high prices or how much of which drugs are sold?

8. (2 or 5 points) Uninsured in America

For two points, what has been happening to the number of uninsured people in the U.S.? For three more points, what are some health effects of being uninsured? Mention a reading on the syllabus that is about this. (The reading I had put on the syllabus for this, called "No Health Insurance, It's Enough to Make You Sick," is no longer available. Instead, please see the syllabus for an Institute of Medicine report called "America's Uninsured Crisis: Consequences for Health and Health Care."

9. (5 points) Sicko

What is the main argument of Sicko? What is the film trying to tell us? The film has a series of sections. What point does each section make? (It is OK if you can't remember every section. Get almost all of the major ones for full credit.)

10. (5 or 10 points, depending on how much you write) Primary Care Shortage and Nurses

Who might provide health care at pay rates that doctors in Europe and Asia accept? Nurses!
Is there a looming primary care shortage? Discuss the possible role of nurses in expanding our health care capacity. See the last section of the syllabus.