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# Small community hospitals in poor urban areas almost always

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Small community hospitals in poor urban areas almost always [#permalink]

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22 Sep 2008, 01:01
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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.
[Reveal] Spoiler: OA

Last edited by Skywalker18 on 06 Feb 2017, 04:53, edited 1 time in total.
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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22 Sep 2008, 04:23
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.

I went to E. Local's doing routine care. A is not right in this sense. Community people anyway go to the big hospital since there are many specialty doctors. So, C is wrong. Only E works.
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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22 Sep 2008, 07:19
Richardson wrote:
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.

I went to E. Local's doing routine care. A is not right in this sense. Community people anyway go to the big hospital since there are many specialty doctors. So, C is wrong. Only E works.

If the community hospitals can afford to pay for a better qualified doctors it will stop the vicious cycle. Concentrate at the last sentence as well. It seems that hiring the best doctors, even part time, would solve the problems.
i would go with C?

What is the OA?
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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22 Sep 2008, 14:41
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.

Dog of a Q and I chose A. Clearly B & D were not in the running.

LH needs to break the vicious cycle, means LH needs money to hire specialists. If they don't have money to start with they possibly cannot hire part time as well. C is out

LH needs to break the VC, means LH needs money to move forward. If they negotiate with pvt insurers for routine care, people will still come up with govt care, which reimburses peanuts. Does not help them

If they negotiate higher reimbursement rates for specialty care, they can hire these specialty doctors and pay them with those higher rates. This will also attract local people who will come to LH.
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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22 Sep 2008, 15:18
well all the suggestions are good

but the passage is emphasizing on "special care- specialists ",... so i think the answer shud adress that concern

hence C for mee too ..

please dnt delay much in publishing the OA as at times people loose the thread before the OA is published !
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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22 Sep 2008, 15:49
C for me. Negotiation for higher reimbursement for specialty care is not going to help since the reimbursement is low for routine care and it is not the private insurances that are responsible. It is the government health plans which most of the insurers have.
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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22 Sep 2008, 21:35
OA is indeed C.
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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24 Sep 2008, 15:21
Just wondering - what is the source of this question?

Is this an official question?
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14 Jan 2010, 03:11
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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 E?
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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14 Jan 2010, 09:29
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joyseychow 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.

What's wrong with E?

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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14 Jan 2010, 17:38
C here too.
the main point is of cost if the speciality.if that can be had it will help small hospitals.

Posted from my mobile device
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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15 Jan 2010, 09:59
We all know that community hospitals are for the poor sector of the society, it is an accepted truth. The government needs to pay their dues regularly to support the community hospitals. People are paying taxes for this, it should be given to where it is needed.

Last edited by dudieezper on 30 Jan 2010, 08:35, edited 1 time in total.
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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15 Jan 2010, 12:56
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?

intention is to make profit
A) Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers. -- how can will this help local hospital. people do not go to local hospital for specialty cares and there is no proof that local users get reimbursement for specialty cares.

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

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. -- one problem solved. what about reimbursement?? local hospitals had two problems

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.-- meaningless

E) Negotiate with private insurers for higher reimbursement rates for routine care. -- this can atleast solve the first problem. even though hospitals can not afford specialty cares they can make profit out of routine cares.

E is the answer as per my opinion.
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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16 Jan 2010, 12:37
joyseychow 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.

What's wrong with E?

CN: Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors
Permises or Factors:
P1: Cannot afford surgeons as they need high salaries and local hospitals cannot afford it. Hence 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.
P2: 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.

In order to enable Local hospitals to afford the specialist for conducting speciality care, the local hospital should be able to generate the money required. This can be done if the reimbursement on routine care checks can be done efficiently and properly.

Hence IMO... the answer should be E... Negotiate with private insurers for higher reimbursement rates for routine care. Once the higher reimbursement rates are available for the common routine check, the overal financial health of local hospitals would increase which would be thereby enable the high salaries surgeons to be affordable!

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Re: Small community hospitals in poor urban areas almost always [#permalink]

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16 Jan 2010, 23:05
Tough question,
can not come up with any legible answer.
Answer E seems wrong to me, because nowhere in the text you can see a word about private insurance companies. Even if we assume, these hospitals will negotiate with private insurers higher rates, if majority of government insured and un insured people keep not paying or paying very little, hospitals will never be profitable, even getting higher rates for routine care from private insurers.
Puzzled...
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17 Jan 2010, 02:07
mirzohidjon wrote:
Tough question,
can not come up with any legible answer.
Answer E seems wrong to me, because nowhere in the text you can see a word about private insurance companies. Even if we assume, these hospitals will negotiate with private insurers higher rates, if majority of government insured and un insured people keep not paying or paying very little, hospitals will never be profitable, even getting higher rates for routine care from private insurers.
Puzzled...

Since it is the question in the stems states, that we could take the answer if true, we could assume that private insurers could be available for the negotiating for higher rates.

Also if we check the second last sentence of the stem - "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"
This statement states that since the majority of people are insured by the government plans, most of the reimbursement is poor for common routine care itself. Hence if the same can be replaced by private insureres who could pay well, there would certainly be a change in the financial input received by the hospitals.
Please note that in the stem we are not talking about the uninsured people as they are anyway a minority. If the majority is insured with better private insurers, the reimbursement could be of a better quality.

The question is tough... but I guess only option E could be the best take on this....
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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21 Jan 2010, 00:42
jeeteshsingh wrote:
joyseychow 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.

What's wrong with E?

CN: Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors
Permises or Factors:
P1: Cannot afford surgeons as they need high salaries and local hospitals cannot afford it. Hence 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.
P2: 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.

In order to enable Local hospitals to afford the specialist for conducting speciality care, the local hospital should be able to generate the money required. This can be done if the reimbursement on routine care checks can be done efficiently and properly.

Hence IMO... the answer should be E... Negotiate with private insurers for higher reimbursement rates for routine care. Once the higher reimbursement rates are available for the common routine check, the overal financial health of local hospitals would increase which would be thereby enable the high salaries surgeons to be affordable!

My take is the same, E. But OA is C. Man CAT online explains it as below but I'm not convince!! Experts help!!

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.
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21 Jan 2010, 00:45
vibhaj wrote:
C here too.
the main point is of cost if the speciality.if that can be had it will help small hospitals.

Posted from my mobile device

Pls. elaborate. I'm not convince...
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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21 Jan 2010, 09:28
Yeah, C makes sense to me now.

I belive hiring the same doctors part time will attract affluent citizens to the hospital, thus will bring more money.
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Re: Small community hospitals in poor urban areas almost always [#permalink]

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10 Aug 2010, 05:46
How can it be C?
Agreed that bringing specialists will bring in more customers so more money. But, from where will the community hospitals get money to pay to the specialists??
Re: Small community hospitals in poor urban areas almost always   [#permalink] 10 Aug 2010, 05:46

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