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805+ Level|   Assumption|      
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Patient advocate: A new pancreatic cancer treatment has proven 18 Jan 2022, 20:58
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Hi experts, can you pls help on why the answer should be C? It seems OA is C.
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Patient advocate: A new pancreatic cancer treatment has proven 24 Jan 2022, 10:45
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GST Week 6 Day 1 Veritas Prep Question 1


Give your best shot at writing a top notch explanation and you will have the chance to win GMAT Club tests daily and GMAT On-Demand Prep by Veritas Prep. See the GMAT Spring Training Thread for all details

Patient advocate: A new pancreatic cancer treatment has proven to decrease mortality by 10% over the treatments currently available under your company's insurance plans. Allowing doctors to prescribe the new treatment could save many lives.

Insurer: You fail to recognize that the new treatment is more than twice as expensive as the others. Including the new treatment in our plans would more than double our costs - and therefore dramatically increase premiums - while providing only marginally better care.

Which of the following is an assumption required by the insurer's argument?

(A) Insurance companies should not value the saving of lives more than they value corporate profits.

(B) New treatments should only be included in insurance plans if they increase positive patient outcomes at a higher percentage than they increase costs.

(C) There is no affordable test to determine which patients' lives would be more likely saved by the new treatment than by the old treatment.

(D) No other insurance companies offer the new cancer treatment in their insurance plans.

(E) The pancreatic cancer treatments currently offered by the insurer's plans will not become more effective over time.

I will go with C here is why:-
Patient's Advocate:-
Premise: A new treatment has proven to decrease mortality rate by 10 % and therefore Conclusion 1: Allowing doctor to prescribe new prescription can save many life.
Insurance Company:-
Premise: The new treatment is 2 times more expensive and including new treatment in our plan will increase the premium while only marginally provide better care.
Conclusion 2: dramatic increase in premium (200%) is not justified for marginal improvement (10% improvement) in healthcare. therefore it should not be included in the plan.
we have to find out the option which is required assumption for conclusion 2
No let us look on the answer choices one by one


(A) Insurance companies should not value the saving of lives more than they value corporate profits.-- lets negate this--- insurance company should value the saving lives more than they value corporate profit.
-- Irrevlevant the conclusion does not talk about profit it is talking about increased premium or cost.
(B) New treatments should only be included in insurance plans if they increase positive patient outcomes at a higher percentage than they increase costs.-- tempting one:- but this is not neccessary, please look on the word ONLY. The insurance company may include the new treatment even if it sees 70 to 80 % improvement with 200% increase in cost we never know

(C) There is no affordable test to determine which patients' lives would be more likely saved by the new treatment than by the old treatment- Correct Answer:- Lets negate this. There are some affordable test to determine which patients lives would be more likely saved- this means that those who know that their life will be more likely to be saved will pay 200% to increase their chances of survival (of course by some greater margin than 10%) while others can keep on paying the lower premium, and therefore this gives a reason why insurance company should include it in its plan.

(D) No other insurance companies offer the new cancer treatment in their insurance plans.-- irrelevant

(E) The pancreatic cancer treatments currently offered by the insurer's plans will not become more effective over time.--- irelevant
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Yes I think the same with you, but I was stuck between C and E. I don't think E is irrelevant because if negate it ---> The new treatments currently offered will become more effective over time, that can weaken the conclusion "providing only marginally better care", so I can E is correct too. Can anybody explain?
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Patient advocate: A new pancreatic cancer treatment has proven 24 Jan 2022, 10:48
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Hi expert,
I was stuck between C and E. If negate E ---> The new treatments currently offered will become more effective over time, thus can weaken the conclusion "providing only marginally better care", so I can E is correct too.
Any expert would like to shed some light? Thanks
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Patient advocate: A new pancreatic cancer treatment has proven 14 Feb 2022, 04:09
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Mavisdu1017
Hi expert,
I was stuck between C and E. If negate E ---> The new treatments currently offered will become more effective over time, thus can weaken the conclusion "providing only marginally better care", so I can E is correct too.
Any expert would like to shed some light? Thanks
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I am not an expert and it took me more than 5 mins to get the correct answer C.
B - Is incorrect coz even if you do the calculations: the percentage increase in Cost Suppose (20k to 45k) = 125%
and Suppose if earlier 7 people were saved and now 8 people are saved (as per 10% improvement), then percentage improvement =
(8-7/7) X100 = 14.28%, which is way less than 125% increase in cost. In other words, this isn't possible.

C - is correct, Coz if there is a cheaper way to find out which patient will survive the new treatment, the company will include the treatment and ask the patient to pay a higher premium, therefore making more profit and not having to pay the insurance claim in case the patient doesn't survive the new treatment.
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Patient advocate: A new pancreatic cancer treatment has proven 14 Feb 2022, 05:21
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Afnan24
Mavisdu1017
Hi expert,
I was stuck between C and E. If negate E ---> The new treatments currently offered will become more effective over time, thus can weaken the conclusion "providing only marginally better care", so I can E is correct too.
Any expert would like to shed some light? Thanks

I am not an expert and it took me more than 5 mins to get the correct answer C.
B - Is incorrect coz even if you do the calculations: the percentage increase in Cost Suppose (20k to 45k) = 125%
and Suppose if earlier 7 people were saved and now 8 people are saved (as per 10% improvement), then percentage improvement =
(8-7/7) X100 = 14.28%, which is way less than 125% increase in cost. In other words, this isn't possible.

C - is correct, Coz if there is a cheaper way to find out which patient will survive the new treatment, the company will include the treatment and ask the patient to pay a higher premium, therefore making more profit and not having to pay the insurance claim in case the patient doesn't survive the new treatment.
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Hello Afnan24, thanks for your reply. But I'm confused between C and E, not B and C. Pls help to elaborate why E is wrong if you like, much thanks in advence.
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Patient advocate: A new pancreatic cancer treatment has proven 27 Oct 2023, 13:17
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As it is an assumption question one must focus on the contents of the questions and distinguish facts - conditions and assumptions.
To clarify what i mean by that let's take a look at the top contenders of the options> B) and C)
Both attack the Condition or logic presented by the insurer that is premium cost increase with little benefit to patient.
However please note - B) directly says that condition is not required and not what is assumed by the insurer while making that logic we need to find the assumption in that logic.
C) Does that perfectly by saying those who need that plan can get it thus making benefit proportional to cost.
IMPORTANT NOTE -> Pre-thinking in assumption questions make it a cake walk as it helps you find where to locate or look for the assumption.
Genuinely good question.
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Patient advocate: A new pancreatic cancer treatment has proven 11 Jul 2024, 12:32
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I believe that C is not the correct answer due to one simple reason - insurance policies mandate a certain time-period during which you need to be ensured in order to be eligible for the insurance 'pay-out'.

If this were not the case and let's say C was the correct answer - negating it would mean that tests do exist where one can find whether the new treatment will be effective.

Patient finds out new treatment will save their lives -> they will instantly buy the said policy -> company will have to pay out 100% of the time.
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Patient advocate: A new pancreatic cancer treatment has proven 17 Aug 2025, 07:04
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