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A major health insurance company in Lagolia

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A major health insurance company in Lagolia [#permalink]

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Official Guide for GMAT Verbal Review, 2nd Edition
Practice Question
Question No.: 17
Page: 121
Difficulty:

A major health insurance company in Lagolia pays for special procedures prescribed by physicians only if the procedure is first approved as “medically necessary” by a company-appointed review panel. The rule is intended to save the company the money it might otherwise spend on medically unnecessary procedures. The company has recently announced that in order to reduce its costs, it will abandon this rule.

Which of the following, if true, provides the strongest justification for the company’s decision?

(A) Patients often register dissatisfaction with physicians who prescribe nothing for their ailments.
(B) Physicians often prescribe special procedures that are helpful but not altogether necessary for the health of the patient.
(C) The review process is expensive and practically always results in approval of the prescribed procedure.
(D) The company’s review process does not interfere with the prerogative of physicians, in cases where more than one effective procedure is available, to select the one they personally prefer.
(E) The number of members of the company-appointed review panel who review a given procedure depends on the cost of the procedure.
[Reveal] Spoiler: OA

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Last edited by dentobizz on 21 Oct 2013, 22:24, edited 1 time in total.
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Re: A major health insurance company in Lagolia [#permalink]

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New post 07 Oct 2013, 14:43
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dentobizz wrote:
A major health insurance company in Lagolia pays for special procedures prescribed by physicians only if the procedure is first approved as “medically necessary” by a company-appointed review panel. The rule is intended to save the company the money it might otherwise spend on medically unnecessary procedures. The company has recently announced that in order to reduce its costs, it will abandon this rule.

Which of the following, if true, provides the strongest justification for the company’s decision?

(A) Patients often register dissatisfaction with physicians who prescribe nothing for their ailments.
(B) Physicians often prescribe special procedures that are helpful but not altogether necessary for the health of the patient.
(C) The review process is expensive and practically always results in approval of the prescribed procedure.
(D) The company’s review process does not interfere with the prerogative of physicians, in cases where more than one effective procedure is available, to select the one they personally prefer.
(E) The number of members of the company-appointed review panel who review a given procedure depends on the cost of the procedure.

Dear dentobizz,
I'm happy to help with this. :-)

Once you learn to see through trap-answers typical of the GMAT CR, the task becomes much easier. We are given some big hints in the passage --- the rule was "intended to save the company the money" and, later, the company got rid of the rule "to reduce its costs." This means we are looking for what about the review process was costing money, such that eliminating it would save money? That's the crucial issue. This question contains all kinds of other juicy reasons we might have a negative opinion about the rule (overall patient well-being, doctor autonomy, etc.), but all of those will be strictly irrelevant to the economic decision mentioned here.

(A) Patients often register dissatisfaction with physicians who prescribe nothing for their ailments.
A humanitarian concern, but irrelevant to the economic argument ---- doesn't save the company money.

(B) Physicians often prescribe special procedures that are helpful but not altogether necessary for the health of the patient.
A humanitarian concern, but irrelevant to the economic argument ---- doesn't save the company money, because those procedures already wouldn't make it past the review board.

(C) The review process is expensive and practically always results in approval of the prescribed procedure.
Ah!! The review process itself costs money, apparently more money than it saves. This is very promising.

(D) The company’s review process does not interfere with the prerogative of physicians, in cases where more than one effective procedure is available, to select the one they personally prefer.
A professional concern of doctors, but irrelevant to the economic argument ---- doesn't save the company money.

(E) The number of members of the company-appointed review panel who review a given procedure depends on the cost of the procedure
Does changing the number of people on the review panel change the company's cost of running the review panel?? Maybe, maybe not. (It wouldn't if all the members were volunteers, or paid by the government, or something of that nature.) This could be a strengthener, but we don't know for sure.

(C) is the only clear choice for a strengthener, so it is the only possible choice for the OA.

Here's a blog on GMAT CR strategy:
http://magoosh.com/gmat/2012/save-time- ... questions/

Does all this make sense?
Mike :-)
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Re: A major health insurance company in Lagolia [#permalink]

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New post 16 Dec 2014, 06:53
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).

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Re: A major health insurance company in Lagolia [#permalink]

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New post 11 Apr 2016, 08:27
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.

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Re: A major health insurance company in Lagolia [#permalink]

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New post 11 Apr 2016, 14:14
C is only option that strengthens the given statements and hence is the correct answer

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Re: A major health insurance company in Lagolia [#permalink]

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New post 13 Oct 2016, 10:31
I also go for C. It definitely support the fact that the process itself causes extra costs, which are not necessary.

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Re: A major health insurance company in Lagolia [#permalink]

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New post 13 Oct 2016, 12:09
dentobizz wrote:
Official Guide for GMAT Verbal Review, 2nd Edition
Practice Question
Question No.: 17
Page: 121
Difficulty:

A major health insurance company in Lagolia pays for special procedures prescribed by physicians only if the procedure is first approved as “medically necessary” by a company-appointed review panel. The rule is intended to save the company the money it might otherwise spend on medically unnecessary procedures. The company has recently announced that in order to reduce its costs, it will abandon this rule.

Which of the following, if true, provides the strongest justification for the company’s decision?



The rule is intended to save the company the money it might otherwise spend.......
The company has recently announced that in order to reduce its costs, it will abandon this rule...

Prethink -

If a plan of action is designed to save the company the money , why is the company considering to abandon this rule to save money ?
Justification : There must be some -ve issues with the current course of action..

So, we must look for the -ve issues in the options with the current plan..

Check the options -

Quote:
(A) Patients often register dissatisfaction with physicians who prescribe nothing for their ailments.
(B) Physicians often prescribe special procedures that are helpful but not altogether necessary for the health of the patient.
(C) The review process is expensive and practically always results in approval of the prescribed procedure.
(D) The company’s review process does not interfere with the prerogative of physicians, in cases where more than one effective procedure is available, to select the one they personally prefer.
(E) The number of members of the company-appointed review panel who review a given procedure depends on the cost of the procedure


Among the given options (C) states the -ve issues with the current procedure -

1. The review process is expensive
2. The process is a futile exercise since it always results in approval

Hence answer must be (C)

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Re: A major health insurance company in Lagolia [#permalink]

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New post 14 Dec 2016, 20:52
dentobizz wrote:
A major health insurance company in Lagolia pays for special procedures prescribed by physicians only if the procedure is first approved as “medically necessary” by a company-appointed review panel. The rule is intended to save the company the money it might otherwise spend on medically unnecessary procedures. The company has recently announced that in order to reduce its costs, it will abandon this rule.

Which of the following, if true, provides the strongest justification for the company’s decision?

(A) Patients often register dissatisfaction with physicians who prescribe nothing for their ailments.
(B) Physicians often prescribe special procedures that are helpful but not altogether necessary for the health of the patient.
(C) The review process is expensive and practically always results in approval of the prescribed procedure.
(D) The company’s review process does not interfere with the prerogative of physicians, in cases where more than one effective procedure is available, to select the one they personally prefer.
(E) The number of members of the company-appointed review panel who review a given procedure depends on the cost of the procedure.


Type - Strengthen
Boil it down - Insurance company has announced to abandon review panel to save costs
Pre-thinking - What if the review panel is expensive and it approves most of the procedures sent for review

Answer C
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Re: A major health insurance company in Lagolia [#permalink]

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New post 15 Aug 2017, 21:46
I picked up 'A' earlier which is incorrect choice - Suggests that patients might be pressuring their physicians to prescribe unnecessary procedures
for their ailments, which in turn suggests that the panel is reviewing these procedures and denying them.

C is correct - This statement properly identifies information that would help to justify the company's decision and cut costs.
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Re: A major health insurance company in Lagolia   [#permalink] 15 Aug 2017, 21:46
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