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Joseph: Health insurance premiums are growing at an alarming

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Joseph: Health insurance premiums are growing at an alarming [#permalink] New post 26 Jan 2013, 04:37
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Joseph: Health insurance premiums are growing at an alarming rate. This is, in part, because many hospitals bill for unnecessary diagnostics and tests that inflate the subsequent amount that insurers pay out to them. These expenses are then passed on to consumers in the form of increased insurance premiums. Therefore, reducing the number of unnecessary tests performed by health care providers will be effective in controlling growing health insurance premiums.

Which of the following is an assumption required by the argument?

A. Doctors are generally able to determine, with great reliability, which diagnostic procedures and tests would yield the most effective results
B. Tests and diagnostic procedures do not make up an insignificant portion of the bills that are sent to insurers
C. Insurance companies in other industries, such as auto and home, have been able to reduce costs by reducing the number of unnecessary repairs and replacements on claims for automobiles and homes
D. Patients are not just as likely as doctors to choose the most expensive diagnostics and tests.
E. Health insurance premiums have increased twice as fast in the past five years than they have over an average of the past 25 years.
[Reveal] Spoiler: OA

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Re: Joseph: Health insurance premiums are growing at an alarming [#permalink] New post 26 Jan 2013, 04:47
Ans is B in my opinion

Let's analyze:
Option a is out of scope.

Option b- if we read line 2 carefully we csn find the wording 'in part'. So, by this, there are other causes for the premium to increase. And option b resolves this issue by stating that the diagnostic tests are NOT INSIGNIFICANT in other words IS SIGNIFICANT.

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Re: Joseph: Health insurance premiums are growing at an alarming [#permalink] New post 26 Jan 2013, 17:52
Premise 1-Providers are billing insurers for unnecessary tests.

Premise 2-Insurers are passing on these costs to policyholders.

Conclusion-Stop paying for these tests >>> healthcare costs go down

Assumption>>>These have a impact on the cost of healthcare.

Choice "A": the cost of those tests is significant.


Seems to fit my reasoning. Any thoughts?
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Re: Joseph: Health insurance premiums are growing at an alarming [#permalink] New post 26 Jan 2013, 18:59
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jgomey wrote:
Premise 1-Providers are billing insurers for unnecessary tests.

Premise 2-Insurers are passing on these costs to policyholders.

Conclusion-Stop paying for these tests >>> healthcare costs go down

Assumption>>>These have a impact on the cost of healthcare.

Choice "A": the cost of those tests is significant.


Seems to fit my reasoning. Any thoughts?


Let me point out one thing here - the conclusion is:

Reducing unnecessary tests will control growing costs i.e. the costs will not grow so much. The conclusion is not that the costs will go down.
The assumption certainly is that the cost of unnecessary tests have an impact on the cost of insurance premiums i.e. the cost of unnecessary tests is significant. So you are right there.

The only other option where there could be a confusion is "A. Doctors are generally able to determine, with great reliability, which diagnostic procedures and tests would yield the most effective results"
i.e. the doctors can figure out which tests are 'worth it' and which are not.
It certainly seems like an assumption - if someone tells us that the insurance costs are shooting up so reduce unnecessary tests to reduce the growing costs, we might be tempted to say, 'But you are assuming that it is possible to say which tests are necessary and which are not.' but in CR, it is not a valid assumption.

If our conclusion is of the form: 'A will lead to B', we need to analyze only whether A will lead to B. Whether A is possible or not is out of our scope. The point is 'if A DOES happen, can B happen?'
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Re: Joseph: Health insurance premiums are growing at an alarming [#permalink] New post 06 Feb 2014, 11:20
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Re: Joseph: Health insurance premiums are growing at an alarming   [#permalink] 06 Feb 2014, 11:20
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