Patient advocate: A new pancreatic cancer treatment has proven

Question

GST Week 6 Day 1 Veritas Prep Question 1 
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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.

aditya201819 · Accepted Answer

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

kunalcvrce · Answer

(A) Insurance companies should not value the saving of lives more than they value corporate profits.: Incorrect-topic doesnt insurance companies values.

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

(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.: Incorrect-topic doesnt talk about test.

(D) No other insurance companies offer the new cancer treatment in their insurance plans.: Incorrect-topic doesnt talk about other insurance companies

(E) The pancreatic cancer treatments currently offered by the insurer's plans will not become more effective over time: Incorrect-  Since topic doesnt discuss about insurers plan.

souvonik2k · Answer

(A) Insurance companies should not value the saving of lives more than they value corporate profits. - The insurer does not mention about profits but mentions about increase in premium with marginally better medical care.

(B) New treatments should only be included in insurance plans if they increase positive patient outcomes at a higher percentage than they increase costs. - Correct. This is the assumption that the insurer makes since he states that premiums will increase but care will be marginally better.

(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. - Irrelevant.

(D) No other insurance companies offer the new cancer treatment in their insurance plans. - Irrelevant. We are not concerned about other companies.

(E) The pancreatic cancer treatments currently offered by the insurer's plans will not become more effective over time. - This is not an assumption that the insurer makes.

Answer B.

Princ · Answer

OA : B

Premise : With New treatment, Mortality reduces by 10 percent as compared to current treatment in insurance plan
 New treatment is more than twice as expensive as others
Conclusion: Including the New treatment will increase insurance premiums while providing only marginally better care.
Missing link :What is criterion of including a new treatment into insurance plan

Only B provide the information about the missing link,hence it is the assumption.

Huahua1987 · Answer

To me it's either E or B.

I prefer E over B.

Insurer's premise #1: the increase of premium is doubled.

Insurer's premise #2: the current increase of treatment effectiveness is 10%.

Insurer's combined premise: the premium cost increases too large for a small improvement in the treatment.

Insurer's conclusion: I don't like that in our plan.

Potential

I don't like B because the insurer certainly doesn't imply or assume how high the percentage of the treatment improvement is supposed to be for him/her to accept the inclusion of the new treatment. The insurer's part of the conclusion is that the improvement is just too small. So the part "higher percentage than" really bothers.

If answer B is modified to "New treatments should only be included in insurance plans if they increase positive patient outcomes at a comparable percentage as they increase costs", I will pick that.

I prefer E because E points out an assumption: the treatment improvement will not get to a high percentage that will make me (insurer) prefer to have the new treatment in the insurance plan.

Feel free to discuss.

AshutoshB · Answer

IMO Answer should be: C

A) WE cannot say this based on the premise

B) What suspicious about this is"  Only " & " Higher percentage than they increase costs  this is too trong to be an assumption

c)  CORRECT  If there are some ways to determine that those patients whose rate of survival would increase by this new treatment
 Then only those patients would bare extra 200% cost and this will save other from paying extra, So this way Insurer Argument will be hurt

D) Irrelevant

E) Irrelevant

ruchik789 · Answer

I would go with B . 
 Insurance companies should not value the saving of lives more than they value corporate profits. -  Not given anywhere. Values of insurance ompany are not a point of question. So this is out

(B) New treatments should only be included in insurance plans if they increase positive patient outcomes at a higher percentage than they increase costs. Insurers makes a claim about the current price vs benefits hence he assumes this. Possible answer

(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.   Looke like a contender. But then conducting test is litle out of scope. Not sure for this option.

(D) No other insurance companies offer the new cancer treatment in their insurance plans.  There is no comparison amongst insurance companies. So not a point of discussion

(E) The pancreatic cancer treatments currently offered by the insurer's plans will not become more effective over time. Would have taken this if it did not talk about future. We are talking about inclusion in current plans and it considers future events.

ashisplb · Answer

Patient advocate: advises To include the new treatment in the policy as it will save more lives

Insurer: The new treatment is too costly . To accomodate the cost ,company has to increase the premium for all insurers but only some people who are affected can be saved .

So It will crease premium costs for all but will provide marginal better care to some .

(A) Insurance companies should not value the saving of lives more than they value corporate profits.-  IRRELEVANT  . Company is considering the percentage not how many lives can be saved .

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

If more people are affected by the disease ,it makes sense to increase the premium for all . Otherwise for a small set of people ,a large set of people has to pay the increased premium .

(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.  IIRELEVANT

We are not concerned about tests.

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

We are not considering other insurance companies

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

We are not considering whether the plan will be more effective over time or not

Press Kudos if you like the description

AshutoshB · Answer

IIRELEVANT

We are not considering whether the plan will be more effective over time or not

Press Kudos if you like the description

How Could B be an assumption, don't you think it is too Strong

Let Say (Acc to Opt 'B')

It says if Positive Outcomes which are now 10% higher than the treatments currently available, Should be more than 100%( costs increase )to be included in Insurence plan

if cost increase is 70% higher than old treatments cost than Positive outcome rate should be more than 70 %, to make them eligible to be included in Insurance plan

SonalSinha803 · Answer

(A) Insurance companies should not value the saving of lives more than they value corporate profits. -very extreme. Cannot assume this.

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

Correct since, the passage clearly states : 
therefore dramatically increase premiums - while providing only marginally better care.

(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. - irrelevant

(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. - ok, so the insurers will also do it in the future...why now ??
Out.

Hence IMO B.

Sent from my Lenovo K53a48 using  GMAT Club Forum mobile app

Masterscorp · Answer

The problem with C is that we don't know which percentage of all patients should be treated with the new method. Let's assume that 80% can be treated. In this case premiums would rise dramatically for everyone because there are not individual rates. Hence, the insurer's argument would make sense.

In contrary, if only 10% of patients could be treated with the new method, premiums would only rise slightly. In this case, the insurer's argument wouldn't make sense.

aditya201819 · Answer

As we know a medical insurance can have multiple options and riders and premium varies accordingly. If someone knows he can be treated by the new method he can afford to pay the higher premium (200%) but if there are no test available that can Identify people who have high likelihood of cure then it wont make sense to include this new method because it will increase the premium for everyone (since nobody knows the likelihood by what percent mortality will reduce)

AshutoshB · Answer

IMO Answer should be: C

A) WE cannot say this based on the premise

B) What suspicious about this is" Only" & "Higher percentage than they increase costs this is too trong to be an assumption

c) CORRECT If there are some ways to determine that those patients whose rate of survival would increase by this new treatment
Then only those patients would bare extra 200% cost and this will save other from paying extra, So this way Insurer Argument will be hurt

D) Irrelevant

E) Irrelevant[/quote]
The problem with C is that we don't know which percentage of all patients should be treated with the new method. Let's assume that 80% can be treated. In this case premiums would rise dramatically for everyone because there are not individual rates. Hence, the insurer's argument would make sense.

In contrary, if only 10% of patients could be treated with the new method, premiums would only rise slightly. In this case, the insurer's argument wouldn't make sense.[/quote]

As we know a medical insurance can have multiple options and riders and premium varies accordingly. If someone knows he can be treated by the new method he can afford to pay the higher premium (200%) but if there are no test available that can Identify people who have high likelihood of cure then it wont make sense to include this new method because it will increase the premium for everyone (since nobody knows the likelihood by what percent mortality will reduce)[/quote]

Exactly this is my point

Nightmare007 · Answer

*Edited the color of my explanation of why E is wrong.

Hi  abhimahna  , 
Can you please explain me where am missing.
Thank you in advance.

abhimahna · Answer

Hey  Nightmare007  ,

Insurer said "Hey, your plan is very costly. Since it saves only 10% of the people, I don't think there will be much benefit of increasing the premium."

I can very well say that the author is assuming everyone is going to buy the plan or there isn't any way to understand who should be the real receiver of the plan before the plan can actually be assigned. Hence, option C is correct.

Now, you need to understand that the key words to solve this question are " Including the new treatment in our plans would increase premiums while providing only marginally better care.". Meaning not beneficial for all.

Does that make sense?

komalpatna · Answer

Although i did mistake and selected option B but the correct answer is C. Option B is very strick which is not always possible. Negating option C proves that it is an assumption.

Although i soved many similar question always this is coming to be answered.

arvind910619 · Answer

Imo C A very tough question though.

A) This option is very subjunctive and very extreme. There is nothing in the argument that makes it even close to being an answer. 
B) Not necessarily true. The percentages of each of the item can vary. If the treatment is effective 20 percent and the cost is increased is 21 percent then they would or would not go for the treatment. There can also be case where the new treatment would limit regular visits to doctor thus saving in the long term. So reject this option.
C) Now this option is very tricky but this is our answer. First negate this choice,then C becomes that insurance companies should go for the new treatment since they can identify folks with high chances of survival, resulting in cost saving.
D) Tangential thinking what other companies do is not a concern here.
E ) Even if current treatments become effective we do not know whether they are more effective than the new treatment or not.

itsarudolf · Answer

Please, provide an official explanation for this one. I am really interested how you will exclude B although I correctly chose C.

PV66 · Answer

Please post the OE, I'm really struggling to understand how C offers a better choice over B. I get why C could be the correct choice, although I also feel B is an equally good contender.

Patient advocate: A new pancreatic cancer treatment has proven

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