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Many United States companies believe that the rising cost of employees

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Many United States companies believe that the rising cost of employees  [#permalink]

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NEW PROJECT!: Back to basic => Give your explanation- Get Kudos Point for best explanation

Passage-19 GMATPrep RCs-Collection(Main article)
Many United States companies believe that the rising cost of employees' health care benefits has hurt the country's competitive position in the global market by raising production costs and thus increasing the prices of exported and domestically sold goods. As a result, these companies have shifted health care costs to employees in the form of wage deductions or high deductibles. This strategy, however, has actually hindered companies' competitiveness. For example, cost shifting threatens employees' health because many do not seek preventive screening. Also, labor relations have been damaged: the percentage of strikes in which health benefits were a major issue rose from 18 percent in 1986 to 78 percent in 1989.

Health care costs can be managed more effectively if companies intervene in the supply side of health care delivery just as they do with other key suppliers: strategies used to procure components necessary for production would work in procuring health care. For example, the make/buy decision--the decision whether to produce or purchase parts used in making a product--can be applied to health care. At one company, for example, employees receive health care at an on-site clinic maintained by the company. The clinic fosters morale, resulting in a low rate of employees leaving the company. Additionally, the company has constrained the growth of health care costs while expanding medical services.


1. The passage is primarily concerned with

A. providing support for a traditional theory
B. comparing several explanations for a problem
C. summarizing a well-known research study
D. recommending an alternative approach
E. criticizing the work of a researcher



2. The author of the passage asserts which of the following about managing health care costs in an effective manner?

A. Educating employees to use health care wisely is the best way to reduce health care costs.
B. Allowing employees to select health care programs is the most effective means of controlling health care costs.
C. Companies should pass rising health care costs on to employees rather than to consumers of the companies' products.
D. Companies should use strategies in procuring health care similar to those used in procuring components necessary for production.
E. Companies should control health care costs by reducing the extent of medical coverage rather than by shifting costs to employees.



3. Which of the following, if true, would provide the most support for the author's view about intervening on the supply side of health care?

A. Most companies do not have enough employees to make on-site clinics cost-effective.
B. Many companies with on-site clinics offer their employees the option of going outside the company's system to obtain health care.
C. The costs of establishing and running an on-site clinic are demonstrably higher than the costs of paying for health care from an outside provider.
D. Companies with health care clinics find that employees are unwilling to assist in controlling the costs of health care.
E. Employees at companies with on-site clinics seek preventive screening and are thus less likely to delay medical treatment.


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Originally posted by PiyushK on 12 Aug 2014, 08:02.
Last edited by SajjadAhmad on 22 Aug 2019, 23:44, edited 3 times in total.
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Re: Many United States companies believe that the rising cost of employees  [#permalink]

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New post 18 Aug 2014, 17:55
Time 5:35 mins

1. The passage is primarily concerned with
A. providing support for a traditional theoryOn the contrary, it asks for the discontinuation of the practice followed till now
B. comparing several explanations for a problemNope
C. summarizing a well-known research studyNo mention of any research theory
D. recommending an alternative approach It does exactly this.
E. criticizing the work of a researcher No mention of any researcher


2. The author of the passage asserts which of the following about managing health care costs in an effective manner?
A. Educating employees to use health care wisely is the best way to reduce health care costs. No mention of educating employees
B. Allowing employees to select health care programs is the most effective means of controlling health care costs.Author wants the employer to do something not the employees
C. Companies should pass rising health care costs on to employees rather than to consumers of the companies' products.On the contrary, the author criticises this approach which was adopted by the companies
D. Companies should use strategies in procuring health care similar to those used in procuring components necessary for production.True
E. Companies should control health care costs by reducing the extent of medical coverage rather than by shifting costs to employees.No mention of controlling healthcare costs. On the contrary, there is mention of increasing medical coverage through on-site medical clinic


3. Which of the following, if true, would provide the most support for the author's view about intervening on the supply side of health care?
A. Most companies do not have enough employees to make on-site clinics cost-effective.This would weaken our case since the cost per employee would be higher
B. Many companies with on-site clinics offer their employees the option of going outside the company's system to obtain health care.Has no effect on our author's view
C. The costs of establishing and running an on-site clinic are demonstrably higher than the costs of paying for health care from an outside provider.Weakens our case
D. Companies with health care clinics find that employees are unwilling to assist in controlling the costs of health care.Weakens our case
E. Employees at companies with on-site clinics seek preventive screening and are thus less likely to delay medical treatment.Strengthens our case. Medical treatment means costs. This point thus tells us that costs will be delayed.
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Re: Many United States companies believe that the rising cost of employees  [#permalink]

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New post 19 Aug 2016, 06:15
Took 6 mins , including 2 mins 10 seconds to read
-The author firsts discusses how united states companies view their employee health care benefits policy
- He then recommends a course of action for the United Sates companies which would result in increasing employee retention as well as reduce costs to the company

1.
The author clearly recommends a new approache that companies can use to reduce health care costs incurred .
Answer D

2.
“Health care costs can be managed more effectively if companies intervene in the supply side of health care delivery just as they do with other key suppliers: strategies used to procure components necessary for production would work in procuring health care".

3. A- would make on site clinics ineffective
B-would make on site clinics redundant
C and D - weaken the argument

Answer E
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Re: Many United States companies believe that the rising cost of employees  [#permalink]

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New post 11 Jan 2017, 06:47
e100 wrote:
Could anyone explain 3rd question?


Hi,
may be a bit late,but let me try.

This strategy, however, has actually hindered companies' competitiveness. For example, cost shifting threatens employees' health because many do not seek preventive screening.
This excerpt explains us the reason why the shift of health care costs to employees hurt the companies' competitiveness;hence,anything that could reduce such hindrance is the answer.
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Re: Many United States companies believe that the rising cost of employees  [#permalink]

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New post 31 Jan 2017, 10:13
e100 wrote:
Could anyone explain 3rd question?



3. Which of the following, if true, would provide the most support for the author's view about intervening on the supply side of health care?
A. Most companies do not have enough employees to make on-site clinics cost-effective.
B. Many companies with on-site clinics offer their employees the option of going outside the company's system to obtain health care.
C. The costs of establishing and running an on-site clinic are demonstrably higher than the costs of paying for health care from an outside provider.
D. Companies with health care clinics find that employees are unwilling to assist in controlling the costs of health care.
E. Employees at companies with on-site clinics seek preventive screening and are thus less likely to delay medical treatment.


Hi,
This is a strengthen question type. We have to support the authors point that an onsite clinic will favour the company. Since empolyees will seek preventive screening and will less likely to delay treatment , less health cost will be occured to the company , decreasing overall production cost . Since having a onsite clinic saved cost for the company , the solution provided by the author is strenghtened.
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Re: Many United States companies believe that the rising cost of employees  [#permalink]

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New post 27 Aug 2019, 01:38
time taken 3mins 15 secs
all questions right
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Re: Many United States companies believe that the rising cost of employees   [#permalink] 27 Aug 2019, 01:38
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