University of South Carolina, Arnold School of Public Health, Dept. of Health Services Policy and Management, HSPM J712
Last modified Tuesday, 22nd November, 2011, 12:02pm

HSPM J712

Second Exam

Due: December 6, 2011

Instructions

Full credit is 52 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.

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

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.

Critically evaluate as many of these diagnoses as you wish. (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 is a promising way 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 10 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.

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.

4. (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.

6. (10 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?

6. (10 points) Pharmaceuticals

What would Marcia Angell and Malcolm Gladwell each do about growing spending on pharmaceuticals, if anything? Is there some things that they agree about? Gladwell finishes his article with a challenge to Angell. How do her later articles address that challenge? Though Angell uses strong language about drug prices, 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?

7. (5 points) Uninsured in America

What has been happening to the number of uninsured people in the U.S.? Based on what you can find at kff.org, what is behind the change? Which types of insurance (public and private) have been expanding? Which types have been covering fewer people, and why?

8. (10 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.)

9. (10 points)

What are the main provisions of the Affordable Care Act? When do the different parts start? How much of the expansion in the number of insured will be because more people buy insurance, and how much will be because more people get on Medicaid?

10. (10 points)

T. R. Reid says that, regarding financing health care, different groups of Americans are living in:

1. Germany
2. Britain
3. Canada
4. Malawi