1st paragraph summary:
Many US companies have shifted health care costs to employees in the form of wage deductions or high deductibles to 'regain' competitive advantage.
But this policy change ended up being counter-productive: it strained labor relations and many employees ended up not seeking preventive screening.
2nd paragraph summary(solution to correct a problem described in paragraph 1): Companies can use a business tactic (the make/buy decision) to foster morale and constrain the growth of healthcare costs.
1. The passage is primarily concerned with(A)
providing support for a traditional theory - does not support; instead, the passage highlights a flaw in a common business practice.
(B)
comparing several explanations for a problem - the passage does not provide multiple explanations
(C)
summarizing a well-known research study - Not exactly, since a recommendation was provided in the second paragraph
(D)
recommending an alternative approach - the second paragraph contains a recommendation and the possible benefits of these recommendations. Hence, (D) is the right answer choice here.(E)
criticizing the work of a researcher - the passage does not mention whether the topic under discussion is 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. - does not provide a statement about which method is the "best" way to reduce cost.
(B)
Allowing employees to select health care programs is the most effective means of controlling health care costs. - does not provide a statement about which method is the "most effective" way to control healthcare costs.
(C)
Companies should pass rising health care costs on to employees rather than to consumers of the companies' products. - does not make this recommendation at all
(D)
Companies should use strategies in procuring health care similar to those used in procuring components necessary for production. - In the first line of the second paragraph, we have "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......to procure components necessary for production would work in procuring health care". Hence, (D) is the right answer here.(E)
Companies should control health care costs by reducing the extent of medical coverage rather than by shifting costs to employees. - does not make this recommendation.
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. - passage does not provide any information regarding the 'number' of employees.
(B)
Many companies with on-site clinics offer their employees the option of going outside the company's system to obtain health care. - does not support the 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. - this would provide a reason to weaken the author's view, not strengthen it.
(D)
Companies with health care clinics find that employees are unwilling to assist in controlling the costs of health care. - does not support the author's view at all
(E)
Employees at companies with on-site clinics seek preventive screening and are thus less likely to delay medical treatment. - we do know from the first paragraph that after the healthcare policy shift, many employees "do not seek preventive screening.". (E) highlights the benefit of the author's view and therefore lends support to the author's view. Hence, (E) is the right answer here. If you find this explanation helpful, please do give it a kudos