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# GMATPREP ChallengeQ -The United States hospital industry is

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GMATPREP ChallengeQ -The United States hospital industry is [#permalink]

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12 Aug 2014, 09:36
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Question 2
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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.

[Reveal] Spoiler:
A

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

[Reveal] Spoiler:
E

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.

[Reveal] Spoiler:
D

[Reveal] Spoiler: Question #1 OA
[Reveal] Spoiler: Question #2 OA
[Reveal] Spoiler: Question #3 OA

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Last edited by alexsr on 14 Jan 2017, 13:38, edited 2 times in total.
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Re: GMATPREP ChallengeQ -The United States hospital industry is [#permalink]

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13 Aug 2014, 12:25

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."
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Last edited by PiyushK on 13 Aug 2014, 21:33, edited 1 time in total.
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Re: GMATPREP ChallengeQ -The United States hospital industry is [#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 ChallengeQ -The United States hospital industry is [#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 ChallengeQ -The United States hospital industry is [#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 ChallengeQ -The United States hospital industry is [#permalink]

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

3 minutes 4 seconds

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Manish Khare
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Re: GMATPREP ChallengeQ -The United States hospital industry is [#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 ChallengeQ -The United States hospital industry is [#permalink]

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28 May 2016, 14:36
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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 ChallengeQ -The United States hospital industry is [#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 ChallengeQ -The United States hospital industry is [#permalink]

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01 Nov 2016, 06:33
Time Taken : 6 mins. All Correct. Question 2 is tricky.
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Re: GMATPREP ChallengeQ -The United States hospital industry is   [#permalink] 01 Nov 2016, 06:33
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