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Small community hospitals in poor urban areas almost always operate at

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Small community hospitals in poor urban areas almost always operate at [#permalink] New post   Updated on: 21 Mar 2021, 09:43
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Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care.

Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?


(A) Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.

(B) Advertise the hospital's specialty care services in the local community as well as nearby communities to attract more business.

(C) Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.

(D) Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.

(E) Negotiate with private insurers for higher reimbursement rates for routine care.
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C

Originally posted by dancinggeometry on 22 Sep 2008, 01:01.
Last edited by Bunuel on 21 Mar 2021, 09:43, edited 2 times in total.
Renamed the topic and edited the question.
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Re: Small community hospitals in poor urban areas almost always operate at [#permalink] New post   17 Apr 2021, 02:30
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dancinggeometry wrote:
Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care.

Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?


(A) Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.

(B) Advertise the hospital's specialty care services in the local community as well as nearby communities to attract more business.

(C) Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.

(D) Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.

(E) Negotiate with private insurers for higher reimbursement rates for routine care.


OFFICIAL EXPLANATION



We are given a list of problematic events, each one leading to the next, and we are asked to find a way to break the cycle of events. In order to do so, we need to find a way to alter one of these events in such a way that it will change the overall cycle so that small community hospitals are no longer losing money (at least, for these particular reasons).

(A) The reimbursement rates for specialty care are not a part of the problematic cycle; rather, the relatively low volume of specialty care at community hospitals is the problem. If the hospital is doing very little or no specialty care work in the first place, then charging more for specialty care won't help much.

(B) Even if the hospital successfully advertises its specialty care services and attracts a lot of new customers, it will not be able to serve these customers because it does not have the necessary specialists in place to provide the specialty care. This choice does not "follow through" the entire cycle.

(C) CORRECT. Since the local residents choose to patronize the nearby affluent hospitals due to the presence of specialists, they will also begin to patronize the community hospital, which is using these same specialists. The amount of high-margin specialty care will increase and the hospital will make more money, thus enabling it to continue using specialists.

(D) The mere act of educating the public about the relatively low reimbursement rates of government health plans does not directly impact the hospital or break the cycle. In order for this to work, the hospital would have to find some way to increase reimbursement rates for routine care from the government plans or convert people from government plans to private insurers that reimburse at better rates.

(E) Most of the community hospital's patients are either on government-funded plans or lack insurance altogether. Receiving more money from private insurers, therefore, is unlikely to generate enough revenue to break the cycle.
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Re: Small community hospitals in poor urban areas almost always operate at [#permalink] New post   14 Jan 2010, 09:29
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Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care.

Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?

A) Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.

B) Advertise the hospital's specialty care services in the local community as well as nearby communities to attract more business.

C) Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more
affordable than hiring these specialists full time.

D) Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.

E) Negotiate with private insurers for higher reimbursement rates for routine care.

What's wrong with [spoiler]E[/spoiler]?


Very interesting question stimulus, the very first sentence is the conclusion and all other premises build upon one another to make the very last sentence a sub-conclusion.

Attack the sub-conclusion and that can help change the situation. In that sense, answer should be E only.

By negotiating with private insurers for higher reimbursement, routine care will start minting money for community hospitals and they'll then be able to afford specialist doctors to provide speciality care competitively with other prestigeous hospitals, thus the unfortunate cycle is broken.
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Re: Small community hospitals in poor urban areas almost always operate at [#permalink] New post   10 Aug 2010, 07:23
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C for me.

It cannot be E because argument says....., a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay.

Since majority of people lacks insurance negotiating with private insurers for higher reimbursement rates for routine care will not help.

Rather partnering with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis will be helpful because then the small hospitals can provide specialty care, which is covered by govt. plan.
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Re: Small community hospitals in poor urban areas almost always operate at [#permalink] New post   23 Feb 2013, 14:42
Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care.

Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?


(A)Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.
(B)Advertise the hospital's specialty care services in the local community as well as nearby communities to attract more business.
(C)Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.


(D)Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.
(E)Negotiate with private insurers for higher reimbursement rates for routine care.
Need explanation.............
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Re: Small community hospitals in poor urban areas almost always operate at [#permalink] New post   23 Feb 2013, 22:45
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mun23 wrote:
Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care.

Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?


(A)Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.
(B)Advertise the hospital's specialty care services in the local community as well as nearby communities to attract more business.
(C)Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.


(D)Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.
(E)Negotiate with private insurers for higher reimbursement rates for routine care.
Need explanation.............


Answer should be C

assume this as a closed cycle or some sort of cyclical graph.
good docs are costly>community hospital doesn't have good surgeons>fewer people go to hospital for speciality care>less revenue
routine care>only small and poor assurance cover is provided by gov >less revenue

look for answer which breaks the pattern.
A wrong:people are aware about the specialists surgesons avaliable in hospitals so negotiating rates won't help as long as people don't come for the care.
B.again advertising won't attract more people as long as good surgeons are not available/
C.this helps to keep the cost of hiring low as well as serves the purpose of attracting more patients as patients know that hospital has got good doctor.correct answer
D:launching awareness programme will not necessarily result in insurers and gov. doing something about this issue.
E.Even if hospital negotiates successfully with private insurers(there is no guarantee) ,most of people in community has gov insurance and hence won't imapct hospital in improving its margins
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Re: Small community hospitals in poor urban areas almost always operate at [#permalink] New post   23 Feb 2013, 23:07
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Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care.

Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?

(A)Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.This will increase the local residents rush to prestigious hospitals. Therefore, no change in pattern

(B)Advertise the hospital's specialty care services in the local community as well as nearby communities to attract more business. More business with low margin may not enable the Small community hospitals to become profitable

(C)Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time. Breaking the pattern: High revenue specialists ===> prestigious hospitals. This may attract local residents for specialty care in Small community hospitals. Correct

(D)Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers. OFS. No comparison of health plans will help to change the pattern

(E)Negotiate with private insurers for higher reimbursement rates for routine care. will not help to change the pattern

Pattern: High revenue specialists ---wants---> higher salaries ===provided by ===> prestigious hospitals <-----specialty care or forgo care------ local residents -----routine checkup--->local hospital =====[b]Net outcome===> Small community hospitals is in LOSS[/b]
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Re: Paradox Revision: Small community hospitals in poor urban areas [#permalink] New post   05 Mar 2015, 21:18
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Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care. Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?

A. Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.

B. Advertise the hospital’s specialty care services in the local community as well as nearby communities to attract more business.

C. Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.

D. Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.

E. Negotiate with private insurers for higher reimbursement rates for routine care.

ans is C, as with availability of specialist on need basis, these small community hospitals will win back the people who go to nearby hospitals .. and the cycle of financial constrains would break..
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Re: Paradox Revision: Small community hospitals in poor urban areas [#permalink] New post   07 Mar 2015, 03:25
souvik101990 wrote:
This question is part of the GMAT Club Critical Reasoning : Paradox Revision Project.

Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care. Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?

A. Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.

B. Advertise the hospital’s specialty care services in the local community as well as nearby communities to attract more business.

C. Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.

D. Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.

E. Negotiate with private insurers for higher reimbursement rates for routine care.




Here is the conclusion of the argument :
surgeons flock to hospitals that are more prestigious and can afford to pay higher salaries. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care.
what should be done to get these surgeons back should be our answer ... lets check

A. Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.
--- goverment plans only covers regular care and there is no mention of private insurers. so this option is not our answer.

B. Advertise the hospital’s specialty care services in the local community as well as nearby communities to attract more business.
-- Ok, but this does not explain why the surgeons will come back to hospital and we are told surgeons are the one which yield high margins for hospital.

C. Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.
--Aaahaa..this looks promising...now we have a surgeon available on need basis. thats what we want .

D. Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.
--passage doesnt mention about private insurers.
E. Negotiate with private insurers for higher reimbursement rates for routine care.
--we are concerned about speciality care also passage doesnt mention about private insurers.


Let me know if my reasoning has a loop hole. suggestions invited.

thanks
lucky
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Re: Paradox Revision: Small community hospitals in poor urban areas [#permalink] New post   08 Mar 2015, 17:18
Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care. Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?

A. Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.
If local residents only go to small community hospitals for routine care, instead of specialty care, then even if the small hospitals receive higher reimbursements from the government it won't help. In addition, most of the local residents don't have insurance so higher reimbursements from private insurers won't help either.

B. Advertise the hospital’s specialty care services in the local community as well as nearby communities to attract more business.
This won't change the fact that residents are aware that specialists work at other hospitals and will still frequent the affluent hospitals.

C. Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.
If small hospitals can obtain affordable specialists then people may begin patronizing the small hospitals.

D. Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.
This may gain sympathy but if residents need specialized care they are still going to go to nearby hospitals.

E. Negotiate with private insurers for higher reimbursement rates for routine care.
Similar to A. If the residents don't have insurance then higher reimbursements from insurance companies aren't going to help.
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Re: Small community hospitals in poor urban areas almost always operate at [#permalink] New post   22 Aug 2022, 07:46
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