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# GMATPrep Challenge Q-The United States hospital industry is an unusual

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GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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Updated on: 25 Dec 2018, 22:02
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NEW PROJECT!: Back to basic => Give your explanation- Get Kudos Point for best explanation

Passage-26 GMATPrep RCs-Collection(Main article)
The United States hospital industry is an unusual market in that nonprofit and for-profit producers exist simultaneously. Theoretical literature offers conflicting views on whether nonprofit hospitals are less financially efficient. Theory suggests that nonprofit hospitals are so much more interested in offering high-quality service than in making money that they frequently input more resources to provide the same output of service as for-profit hospitals. This priority might also often lead them to be less vigilant in streamlining their services—eliminating duplication between departments, for instance. Conversely, while profit motive is thought to encourage for-profit hospitals to attain efficient production, most theorists admit that obstacles to that efficiency remain. For-profit hospital managers, for example, generally work independently of hospital owners and thus may not always make maximum financial efficiency their highest priority. The literature also suggests that widespread adoption of third-party payment systems may eventually eliminate any such potential differences between the two kinds of hospitals.

The same literature offers similarly conflicting views of the efficiency of nonprofit hospitals from a social welfare perspective. Newhouse (1970) contends that nonprofit hospital managers unnecessarily expand the quality and quantity of hospital care beyond the actual needs of the community, while Weisbrod (1975) argues that nonprofit firms — hospitals included — contribute efficiently to community welfare by providing public services that might be inadequately provided by government alone.

1. Which of the following best describes the overall content of the second paragraph of the passage?

(A) It describes views concerning a particular aspect of one of the types of hospitals discussed earlier.
(B) It describes an additional benefit of one of the types of hospitals discussed earlier.
(C) It offers a potential solution to a problem inherent in the structure of the United States hospital industry.
(D) It provides an additional contrast between the two types of hospitals discussed earlier.
(E) It describes one of the consequences of the character of the United States hospital market.

2. According to the passage, Newhouse's view of the social welfare efficiency of nonprofit hospitals differs from Weisbrod's view in that Newhouse

(A) contends that government already provides most of the services that communities need
(B) argues that for-profit hospitals are better at meeting actual community needs than are nonprofit hospitals
(C) argues that nonprofit hospitals are likely to spend more to provide services that the community requires than for-profit hospitals are likely to spend
(D) argues that nonprofit hospitals ought to expand the services they provide to meet the community's demands
(E) believes that the level of care provided by nonprofit hospitals is inappropriate, given the community's requirements

3. The passage suggests which of the following about the managers mentioned in the highlighted text?

(A) They have generally been motivated to streamline hospital services as a result of direct intervention by hospital owners.
(B) They are more likely than managers of nonprofit hospitals to use unnecessary amounts of resources to provide services.
(C) Their most important self-acknowledged goal is to achieve maximum financial efficiency so that hospitals show a profit.
(D) Their decisions regarding services provided by their hospitals may not reflect hospital owners' priorities.
(E) They do not place a high priority on maximizing profits, despite their desire to achieve efficiency.

4. The passage is primarily concerned with

(A) discussing the advantages of increased efficiency in a particular type of hospital
(B) assessing obstacles to efficiency in a particular type of hospital
(C) describing conflicting assessments in the theoretical literature concerning particular types of hospitals
(D) challenging evidence used to support an argument advanced in recent theoretical literature concerning a particular type of hospital
(E) emphasizing the advantages of one particular type of hospital over another type

5. The author mentions duplication between departments primarily in order to

(A) illustrate an area in which nonprofit hospitals fail to provide adequate services
(B) describe the outcome of nonprofit hospitals' emphasis on maintaining managerial freedom
(C) recommend a particular change that would allow nonprofit hospitals to streamline their services
(D) suggest a way in which nonprofit hospitals may fail to achieve maximum financial efficiency
(E) explain why nonprofit hospitals may be able to provide more services than for-profit hospitals

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Originally posted by PiyushK on 12 Aug 2014, 09:36.
Last edited by workout on 25 Dec 2018, 22:02, edited 6 times in total.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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16 Jul 2018, 19:14
2

Question 2, Explained

sevenplusplus wrote:
For Quetion 2, I chose C because the text says:
Newhouse (1970) contends that nonprofit hospital managers unnecessarily expand the quality and quantity of hospital care beyond the actual needs of the community

From keyword "expand" and a bit of inference from Para 1 (which talks about non-profit hospitals as less efficient than for-profit hospital), I thought C would be the answer.
(C) argues that nonprofit hospitals are likely to spend more to provide services that the community requires than for-profit hospitals are likely to spend
Can someone point the error in my reasoning?
Thanks.

Question #2 is quite targeted:

Quote:
2. According to the passage, Newhouse's view of the social welfare efficiency of nonprofit hospitals differs from Weisbrod's view in that Newhouse...

Let's focus on what this question is asking:
• What is Newhouse's view
• of social welfare efficiency
• of nonprofit hospitals
• in contrast to Weisbrod's view?

Newhouse and Weisbrod are not mentioned at all in the first paragraph. The author never links them to the first paragraph. Consequently, everything we need to answer this question is in the second paragraph. We know that Newhouse thinks "nonprofit hospital managers unnecessarily expand the quality and quantity of hospital care beyond the actual needs of the community." It's up to us to look for something matching this description, and to eliminate choices that stray outside these lines.

Quote:
(A) contends that government already provides most of the services that communities need

Newhouse absolutely does not say this within the passage. The author does tell us that Weisbrod believes nonprofit firms provide public services that might be inadequately provided by government alone. However, this is a statement from Weisbrod, not from Newhouse. Eliminate (A).

Quote:
(B) argues that for-profit hospitals are better at meeting actual community needs than are nonprofit hospitals.

Newhouse says nothing about for-profit hospitals. While Newhouse contends that nonprofit hospital managers go beyond the actual needs of the community, we have no evidence of anything Newhouse says or thinks about for-profit hospital managers. We can't make that leap of logic because we're asked what's true according to the passage. Eliminate (B).

Quote:
(C) argues that nonprofit hospitals are likely to spend more to provide services that the community requires than for-profit hospitals are likely to spend.

Again, Newhouse says nothing about for-profit hospitals in this passage. This answer choice takes a nice-sounding phrase ("nonprofit hospitals are likely to spend more to provide services that the community requires"). Then this choice places that phrase into an incorrect statement, comparing spending of nonprofit vs. for-profit hospitals for the same level of services. Eliminate (C).

Quote:
(D) argues that nonprofit hospitals ought to expand the services they provide to meet the community's demands.

Newhouse says that nonprofit hospital managers' expansion of services is unnecessary, given the community's needs. Eliminate (D).

Quote:
(E) believes that the level of care provided by nonprofit hospitals is inappropriate, given the community's requirements.

This is the best answer choice by far, because it sticks closely to what the passage tells us about Newhouse.

• Passage: Newhouse contends that nonprofit hospital managers expand the quality and quantity of care beyond actual community needs.
• Choice (E): Newhouse believes this level of care is inappropriate when taking into account the community's requirements.

It's a solid match and every other choice has been proven incorrect, so we'll stick with (E) as the best answer choice available.

maggie27 wrote:
Need discussion on Q2. I feel the word "inappropriate" is too harsh in option E! However I am not fully confident of option B as well because it talks more for the profit organizations rather than the non-profit ones .

MSGmat1 wrote:
I also feel the word 'inappropriate' in choice (E) is quite hard. I picked answer choice (C) and found (B) the next possible correct answer. GMATNinjacould you please help.

I hope that my explanation clarifies why (C) and (B) are not correct. In choice (E), "inappropriate" is a perfectly acceptable word for two reasons:

• The definition of "inappropriate" is "not suitable or proper for the circumstances." This word is often used in an individual, pejorative context (e.g., inappropriate behavior, an inappropriate statement at a team meeting). However, we could say that a company's projection of revenue for Q3 was inappropriate, given a recent contraction in their supply chain. We could also say that the selection of vacuum cleaners available in a local shop was inappropriate for the kinds of floors built in most houses surrounding the shop.
• In this answer choice, the circumstances are clearly described. The quality of nonprofit hospital care is inappropriate, given the actual needs of the community. This is a reasonable way to describe Newhouse' view of nonprofit hospital care, so (E) remains a fine answer choice.

Question 3, Explained

powellmittra wrote:
Can someone please explain how the answer to third question is D and not E?

3. The passage suggests which of the following about the managers mentioned in the highlighted text?

Here's where the highlighted text comes in:

"Conversely, while profit motive is thought to encourage for-profit hospitals to attain efficient production, most theorists admit that obstacles to that efficiency remain. For-profit hospital managers, for example, generally work independently of hospital owners and thus may not always make maximum financial efficiency their highest priority."

The author brings up these for-profit managers as an example of obstacles to efficient production in for-profit hospitals. Let's see which choice fits the author's statement and purpose.

Quote:
D. Their decisions regarding services provided by their hospitals may not reflect hospital owners' priorities.

(D) is correct because it logically follows from what we know about for-profit hospital managers: They work independently of hospital owners, so the decisions of managers may not be in line with those owners. This split in priorities is brought up as an obstacle to efficiency, which suggests that the owners prioritize maximum efficiency while the managers may prioritize something else. Let's keep (D) around.

Quote:
E. They do not place a high priority on maximizing profits, despite their desire to achieve efficiency.

(E) states that for-profit hospital managers want to achieve efficiency, but do not prioritize maximizing profits. But the author never tells us that the managers want to achieve efficiency. If anything, the passage states that managers (unlike owners) do not prioritize efficiency. Furthermore, when bringing up the managers and owners of for-profit owners, the author never mentions the level of profit that either group wants. This entire discussion is about maximizing efficiency, not maximizing profit. That's why we eliminate (E) and keep (D) as our best answer choice.

I hope this helps... and that nobody needed to be hospitalized from exhaustion after reading it.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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Updated on: 13 Aug 2014, 21:33

Time taken 5:30 mins.

1.Which of the following best describes the overall content of the second paragraph of the passage?
A. It describes "views" concerning a particular aspect of one of the types of hospitals discussed earlier.
"The same literature offers similarly conflicting views of the efficiency of nonprofit hospitals from a social welfare perspective"

2. According to the passage, Newhouse's view of the social welfare efficiency of nonprofit hospitals differs from Weisbrod's view in that Newhouse
E. believes that the level of care provided by nonprofit hospitals is inappropriate, given the community's requirements
"onprofit hospital managers unnecessarily expand the quality and quantity of hospital care beyond the actual needs of the community"

3. The passage suggests which of the following about the managers mentioned in the highlighted text?
D. Their decisions regarding services provided by their hospitals may not reflect hospital owners' priorities.
"generally work independently of hospital owners and thus may not always make maximum financial efficiency their highest priority."

Originally posted by JarvisR on 13 Aug 2014, 12:25.
Last edited by PiyushK on 13 Aug 2014, 21:33, edited 1 time in total.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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13 Aug 2014, 19:04
1.a
2.D ( argues that nonprofit hospitals ought to expand the services they provide to meet the community's demands) Bcz arguments states that expansion in quality takes place beyond the need of community.
3.E
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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20 Aug 2014, 11:31
6 mins.

1.A
2.B
3.D

Need discussion on Q2. I feel the word "inappropriate" is too harsh in option E! However I am not fully confident of option B as well because it talks more for the profit organizations rather than the non-profit ones .
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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21 Aug 2014, 00:36
9min 4sec (Second question ate my time)

A E D

OAs are updated.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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30 Jun 2015, 08:41
1A 2E 3D (All Correct)

3 minutes 4 seconds

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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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23 Apr 2016, 07:32
Can someone please explain how the answer to third question is D and not E? From the passage: "For-profit hospital managers, for example, generally work independently of hospital owners and thus may not always make maximum financial efficiency their highest priority."

3. The passage suggests which of the following about the managers mentioned in the highlighted text?
A. They have generally been motivated to streamline hospital services as a result of direct intervention by hospital owners.
B. They are more likely than managers of nonprofit hospitals to use unnecessary amounts of resources to provide services.
C. Their most important self-acknowledged goal is to achieve maximum financial efficiency so that hospitals show a profit.
D. Their decisions regarding services provided by their hospitals may not reflect hospital owners' priorities.
E. They do not place a high priority on maximizing profits, despite their desire to achieve efficiency.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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28 May 2016, 14:36
1
powellmittra wrote:
Can someone please explain how the answer to third question is D and not E? From the passage: "For-profit hospital managers, for example, generally work independently of hospital owners and thus may not always make maximum financial efficiency their highest priority."

3. The passage suggests which of the following about the managers mentioned in the highlighted text?
A. They have generally been motivated to streamline hospital services as a result of direct intervention by hospital owners.
B. They are more likely than managers of nonprofit hospitals to use unnecessary amounts of resources to provide services.
C. Their most important self-acknowledged goal is to achieve maximum financial efficiency so that hospitals show a profit.
D. Their decisions regarding services provided by their hospitals may not reflect hospital owners' priorities.
E. They do not place a high priority on maximizing profits, despite their desire to achieve efficiency.

Hi Powerllmittra,

what I have learned from reading CR passages is that the entire answer prompt has to match the information provided in the text; and, while the text does state that for-profit hospital managers do not put emphasis on maximizing profits, yet nowhere in the passage does it say managers desire (also quite a strong word to use for correct answer choice) to achieve efficiency.
It is quite easy to assume that, yet this does not follow from the passage.

On the other hand, in the passage we do have that "managers work independently of the hospital's owners and thus may not always make maximum financial efficiency their highest priority", which does match answer choice D - that "and" implies that working independently and not maximizing profits are related.

I hope this helps
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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24 Aug 2016, 06:37
Took 7 mins and 10 seconds , including 2 mins 20 seconds to read the passage
-The author does not provide an opinion
- The author talks about For profit and non profit hospitals and explains differences between them
-The author also talks about the contrasting literature for non profit hospitals

1.
The second praragraph talks about only Non profit hospitals and 2 contrasting views about Non profit hospitals.
Only option (A) accurately captures the content of the second paragraph and is hence the right answer.

2.
"Newhouse (1970) contends that nonprofit hospital managers unnecessarily expand the quality and quantity of hospital care beyond the actual needs of the community"
The above excerpt shows that Newhouse hospital managers unnecessarily expanded the quality and quantity of Hospital Care was inappropriate. Hence option (E)

3.
"For-profit hospital managers, for example, generally work independently of hospital owners and thus may not always make maximum financial efficiency their highest priority"
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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05 Nov 2017, 02:27
All correct in 6mins 34seconds...happy to help in case some one needs any help!
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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14 Nov 2017, 16:50
For Quetion 2, I chose C because the text says:
Newhouse (1970) contends that nonprofit hospital managers unnecessarily expand the quality and quantity of hospital care beyond the actual needs of the community

From keyword "expand" and a bit of inference from Para 1 (which talks about non-profit hospitals as less efficient than for-profit hospital), I thought C would be the answer.
(C) argues that nonprofit hospitals are likely to spend more to provide services that the community requires than for-profit hospitals are likely to spend
Can someone point the error in my reasoning?
Thanks.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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18 May 2018, 22:19
TheMechanic wrote:
All correct in 6mins 34seconds...happy to help in case some one needs any help!

GMATNinja
Q1,OPTION D
although i have marked the correct answer choice(A),i wanted to check my reasoning with option D

OPTION D:It provides an additional contrast between the two types of hospitals discussed earlier.

in the second paragraph, for-profit hospital is never mentioned.the paragraph only discusses the contrasting views of efficiency of non-profit hospitals from social welfare perspective
Newhouse says: not efficient
Weisbrod: efficient

please correct me if i am wrong
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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05 Jul 2018, 11:14
maggie27 wrote:
6 mins.

1.A
2.B
3.D

Need discussion on Q2. I feel the word "inappropriate" is too harsh in option E! However I am not fully confident of option B as well because it talks more for the profit organizations rather than the non-profit ones .

I also feel the word 'inappropriate' in choice (E) is quite hard. I picked answer choice (C) and found (B) the next possible correct answer. GMATNinja could you please help.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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10 Jul 2018, 10:00
question 2 cannot be C because there is no comparision between for profit and non profit hospitals. Answer is E as the argument just states that the services provided are more than required.

Appropriate word was a problem for me..that was tricky.

anyways,

took around 6.5 mins

2 correct
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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17 Jul 2018, 14:10
Took 5 mins, 20 sec and got all 3 correct.

1.Which of the following best describes the overall content of the second paragraph of the passage?

(A) It describes views concerning a particular aspect of one of the types of hospitals discussed earlier. : Correct, particular aspect that "unnecessarily expand the quality and quantity of hospital care beyond the actual needs of the community" is then counter-attacked by Weisbrod.

(B) It describes an additional benefit of one of the types of hospitals discussed earlier. Though Weisbrod does explain a benefit. But this is partial answer. So you can hold on while eliminating but it will be incorrect. A is much more complete.

(C) It offers a potential solution to a problem inherent in the structure of the United States hospital industry. Incorrect. Nothing so mentioned in the passage.

(D) It provides an additional contrast between the two types of hospitals discussed earlier. Incorrect. There is no contrast between the two hospital types, that the passage reads in the second para. We are actually provided in the contrast of opinion on one particular type of hospital.

(E) It describes one of the consequences of the character of the United States hospital market. Incorrect.

2. According to the passage, Newhouse's view of the social welfare efficiency of nonprofit hospitals differs from Weisbrod's view in that Newhouse

(A) contends that government already provides most of the services that communities need. Incorrect. No opinion about the government provided.

(B) argues that for-profit hospitals are better at meeting actual community needs than are nonprofit hospitals. Incorrect. Faulty inference.

(C) argues that nonprofit hospitals are likely to spend more to provide services that the community requires than for-profit hospitals are likely to spend. Incorrect. Though the first half of the statement seems to be somewhat buyable, but the latter part "than for profit hospitals are likely to spend" is something not mentioned.

(D) argues that nonprofit hospitals ought to expand the services they provide to meet the community's demands. Incorrect. Distorted Statement.

(E) believes that the level of care provided by nonprofit hospitals is inappropriate, given the community's requirements. Correct. Focus on lines, "nonprofit hospital managers unnecessarily expand the quality and quantity of hospital care beyond the actual needs of the community."

3. The passage suggests which of the following about the managers mentioned in the highlighted text?

(A) They have generally been motivated to streamline hospital services as a result of direct intervention by hospital owners. Incorrect. That is not the context of the reasoning at all. Direct reject.

(B) They are more likely than managers of nonprofit hospitals to use unnecessary amounts of resources to provide services. Incorrect. Nothing like that mentioned.

(C) Their most important self-acknowledged goal is to achieve maximum financial efficiency so that hospitals show a profit. Incorrect. We cannot infer this.

(D) Their decisions regarding services provided by their hospitals may not reflect hospital owners' priorities. Correct. Focus on line, " generally work independently of hospital owners and thus may not always make maximum financial efficiency their highest priority."

Since they do not depend on hospital owners as decisions, it is not obvious that they will have financial efficiency as their highest priority. Retain this option.

(E) They do not place a high priority on maximizing profits, despite their desire to achieve efficiency. Incorrect. You cannot deduce that they desire efficiency. ( Do not choose an option if you see the former part to be something relevant in context of the passage, always evaluate the latter part.)

Thank you.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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07 Sep 2018, 06:17
1
Got all 3/3 correct. Took me 7:12 minutes in total including 3:30 to read the passage.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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25 Dec 2018, 21:57
1
HI workout, u1983, broall

Can you add the below questions to passages, seems like missed

The passage is primarily concerned with

(A) discussing the advantages of increased efficiency in a particular type of hospital
(B) assessing obstacles to efficiency in a particular type of hospital
(C) describing conflicting assessments in the theoretical literature concerning particular types of hospitals
(D) Challenging evidence used to support an argument advanced in recent theoretical literature concerning a particular type of hospital
(E)emphasizing the advantages of one particular type of hospital over another type

OA:

3. The author mentions duplication between departments primarily in order to

(A) illustrate an area in which nonprofit hospitals fail to provide adequate services
(B) describe the outcome of nonprofit hospitals' emphasis on maintaining managerial freedom
(C) recommend a particular change that would allow nonprofit hospitals to streamline their services
(D) suggest a way in which nonprofit hospitals may fail to achieve maximum financial efficiency
(E) explain why nonprofit hospitals may be able to provide more services than for-profit hospitals

OA:
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual  [#permalink]

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25 Dec 2018, 22:03
NandishSS

I've added the questions. Thank you.
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Re: GMATPrep Challenge Q-The United States hospital industry is an unusual   [#permalink] 25 Dec 2018, 22:03
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