Garnet and RenCo each provide health care for their employees. Garnet

Question

Which of the following most logically completes the passage?

Garnet and RenCo each provide health care for their employees. Garnet pays for both testing of its employees’ cholesterol levels and treatment of high cholesterol. This policy saves Garnet money, since high cholesterol left untreated for many years leads to conditions that require very expensive treatment. However, RenCo dose not have the same financial incentive to adopt such a policy, because ______.

(A) early treatment of high cholesterol dose not entirely eliminate the possibility of a stroke later in life

(B) the mass media regularly feature stories encouraging people to maintain diets that are low in cholesterol

(C) RenCo has significantly more employees than Garnet has

(D) RenCo’s employees are unlikely to have higher cholesterol levels than Garnet’s employees

(E) the average length of time an employee stays with RenCo is less than it is with Garnet

fluke · Accepted Answer

Like I said, your doubt about the average is justified.

"However, RenCo dose not have the same financial incentive to adopt such a policy, because RenCo has significantly more employees than Garnet has."
Now, how do we know that there are no financial incentives to adopt a policy just on the basis of company's employee strength? We actually don't unless we are given a good reason. "E" gives us that reason.

Let's think it like this:
I) I'm not going to get much return even if I medically insure my employees because they are just too many in numbers. (Financial incentive-the return of investment)

II) I just can't afford to medically insure my employees because they are too many in numbers. (Financial incapacity)

III) I'm not going to get much return even if I medically insure my employees because they will leave my company after a short time anyway. 
E is trying to say just that in a convoluted manner.

IMO, "III" is a better reason than "I" for not getting the employees insured.

fluke · Answer

I agree with you to an extent. The average is not a good indicator when the data are too widely dispersed. However, if we consider the standard deviation is not too much, the answer perhaps lies in the word "incentive". If we replace the word "incentive" with "capacity", "C" becomes a stronger candidate. Incentive is something like an ROI. If RenCo's employees quit every two years, why does it have to worry about the long term demerits of the ailment as to oppose to the Garnet employees, who work at least 25-30 years for the company. Yes, I am assuming a wild case where the average of the two cases will vary significantly. Too many assumptions are making it a weak argument.

But, E is the strongest among the weak.

vprabhala · Answer

E. The only one which talks about the time frame.  the average length of time an employee stays with RenCo is less than it is with Garnet 
which is of importance because it is said that  This policy saves Garnet money, since high cholesterol left untreated for many years leads to conditions that require very expensive treatment

elevinty · Answer

think about it this way, the stimulus clearly specifies that HC levels left untreated will lead to sever conditions(not necessarily stroke but other conditions that are way expensive) but still, say if this is hold true, A would still not give us a reason to justify Renco position because there is a possibility that Renco would have to pay expensive treatments. We need some other reason that would tell us that there is small possibility Renco will have to pay in the future..that would be E, employees are not going to be there for long

sguptashared · Answer

As far as I know average is not a good indicator for any stats. In this case, it's been argued that average length of time an employee stays with RenCo is less than with Garnet. But in reality, this average might be less just because of few employees. Other employees may very well have length of time greater than that with Garnet. Considering this factor, is E still correct as many have suggested on this forum? Can someone please explain?

Also, I chose C because I thought if RenCo has more number of employees then upfront expenditure may be much more than the Garnet and my assumption is that not many employees will necessarily require expensive treatment. Hence, RenCo may not have the same advantage as Garnet. I was not fully convinced with this option either, but it sounded better than E.

sguptashared · Answer

Thanks fluke for the explanation. Perhaps I am still lacking the depth to understand these questions. Even after reading your explanation I don't understand the difference between capacity and incentive, and why would capacity make "C" a stronger candidate? I am always wary about choosing an option with "average". Do you know any strategy when I am in dilemma about these options?

Marcab · Answer

Still the question, whats wrong with C? Explanations will be appreciated.

egmat · Answer

Hi, I think I should offer my two cents to the reason why C cannot be the answer. This is a doubt expressed by a number of people. Let's start with a basic question - what incentive does Garnet has to allow cholesterol testing? The reason is clearly given in the passage that it allows it to save money that would have been spent on treatment of cholesterol, once its employees gets affected (after some years). Now, what makes us think that a similar policy won't help Renco save money? Are employees of Renco any different from Garnet? Some people have opined that it would lead to a lot of upfront cost for Renco because it has significantly more employees than Garnet. But with the same reason, one can say that allowing cholesterol testing should save Renco significantly more since it has larger number of employees. So, if the proportion of employees that are going to be treated for cholesterol are same for Garnet and Renco, both the companies have the financial incentive to support cholesterol testing. So, Renco has the same financial incentive as Garnet if there is no difference in the employees of the two companies. Option E specifically talks about the difference in employees of Renco and Garnet. Renco employees stay in the company for shorter period of time than Garnet employees. Therefore, option E is correct. Hope this helps

Let me know if further clarity is needed. Thanks, Chiranjeev

semwal · Answer

Garnet and RenCo each provide health care for their employees.
Garnet pays for both testing of its employees' cholesterol levels and treatment of high cholesterol. This policy saves Garnet money, since high cholesterol left untreated for many years leads to conditions that require very expensive treatment.
However, RenCo dose not have the same financial incentive to adopt such a policy, because ______.

A. early treatment of high cholesterol does not entirely eliminate the possibility of stroke later in life.... that may apply to both firms...irrelevant 
B. the mass media regularly feature stories encouraging people to maintain diets that are low in cholesterol... so what? 
C. RenCo has significantly more employees than Garnet has.... employee strength is irrelevant 
D. RenCo's employees are unlikely to have higher cholesterol levels than Garnet's employees even if it is equal...the financial benefit should have accrued... 
E. the average length of time an employee stays with RenCo is less than it is with Garnet correct..note the premise- ""This policy saves Garnet money, since high cholesterol left untreated for many years leads to conditions that require very expensive treatment"" ...if average time spent is less less benefit accrues from it as cases of " high cholesterol left untreated for many years leading to conditions requiring very expensive treatment " .. may not be there.....

souvik101990 · Answer

Which of the following most logically completes the passage?
Garnet and RenCo each provide health care for their employees. Garnet pays for both testing of its employees' cholesterol levels and treatment of high cholesterol. This policy saves Garnet money, since high cholesterol left untreated for many years leads to conditions that require very expensive treatment. However, RenCo does not have the same financial incentive to adopt such a policy, because __________.

A. early treatment of high cholesterol does not entirely eliminate the possibility of a stroke later in life
B. the mass media regularly feature stories encouraging people to maintain diets that are low in cholesterol
C. RenCo has significantly more employees than Garnet has
D. RenCo's employees are unlikely to have higher cholesterol levels than Garnet's employees
E. the average length of time an employee stays with RenCo is less than it is with Garnet

E. Let's start with a basic question - what incentive does Garnet has to allow cholesterol testing?

The reason is clearly given in the passage that it allows it to save money that would have been spent on treatment of cholesterol, once its employees gets affected (after some years).

Now, what makes us think that a similar policy won't help Renco save money? Are employees of Renco any different from Garnet?

Some people have opined that it would lead to a lot of upfront cost for Renco because it has significantly more employees than Garnet. But with the same reason, one can say that allowing cholesterol testing should save Renco significantly more since it has larger number of employees.

So, if the proportion of employees that are going to be treated for cholesterol are same for Garnet and Renco, both the companies have the financial incentive to support cholesterol testing.

So, Renco has the same financial incentive as Garnet if there is no difference in the employees of the two companies.

Option E specifically talks about the difference in employees of Renco and Garnet. Renco employees stay in the company for shorter period of time than Garnet employees.

Therefore, option E is correct.

Hope this helps

KarishmaB · Answer

G pays for testing and treatment while R does not pay for testing. 
Paying for testing helps G save money because if left untreated for a long time, treatment is expensive.
But this benefit does not accrue for R.

What could be a reason why this benefit does not accrue for R?
What if employees at R do not stay long. Then the problems that appear because of untreated cholesterol for a long time may not appear in R's employees. They may leave the company before they appear.

(A) early treatment of high cholesterol dose not entirely eliminate the possibility of a stroke later in life
 
No discussion on stroke.

(B) the mass media regularly feature stories encouraging people to maintain diets that are low in cholesterol
 
The same mass media is available to all employees of both companies.

(C) RenCo has significantly more employees than Garnet has
 
If R has more employees, it would lead to higher testing costs but could save much more money in the future. 
Say Garnet has 100 employees and pays $1000 for their testing now. If it detects 2 cases early enough, say, this could save it $20,000 in future. 
Say RenCo has 200 employees and pays $2000 for their testing now. If it detects 4 cases early enough (assuming same proportion of cases in employees), this could save it $40,000 in future. So every $1000 expense is still saving them $20,000. 
Hence this point is irrelevant.

(D) RenCo’s employees are unlikely to have higher cholesterol levels than Garnet’s employees
 
The comparison of the levels of cholesterol is irrelevant. The only distinction we are making is normal cholesterol vs high cholesterol. How high is irrelevant.
Yes, if there were a reason why high cholesterol was rarer among employees of R (say their jobs required them to be physically v active), then it makes sense that they may not want to invest in testing.

(E) the average length of time an employee stays with RenCo is less than it is with Garnet
 
This could be a good reason why R may not accrue the same benefit. We don't know exactly how much should be the difference in time spent but as a general rule, less the time spent, less likely are the employees to show symptoms and for the company to provide expensive treatment. We don't have to assume anything about the difference in the tenure of stay. If this can be a valid reason, it is our answer.

Answer (E)

Nsp10 · Answer

very nice Q, 
the key is to find a reason that is aligned with the policy of Renco such that by not applying the strategy that Garnet applies still benefitted Renco, 
E is the clear answer as it is giving the reason why.

Garnet and RenCo each provide health care for their employees. Garnet

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Garnet and RenCo each provide health care for their employees. Garnet

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