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United States Hospitals have traditionally relied primarily on revenue

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United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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United States Hospitals have traditionally relied primarily on revenues from paying patients to offset losses from unreimbursed care. Almost all paying patients now rely on governmental or private health insurance to pay hospital bills. Recently, insurers have been strictly limiting what they pay hospitals for the care of insured patients to amounts at or below actual costs.

Which of the following conclusions is best supported by the information above?

(A) Although the advance of technology has made expensive medical procedures available to the wealthy, such procedures are out of the reach of low-income patients.

(B) If hospitals do not find ways of raising additional income for unreimbursed care, they must either deny some of that care or suffer losses if they give it.

(C) Some patients have incomes too high for eligibility for governmnetal health insurance but are unable to afford private insurance for hospital care.

(D) If the hospitals reduce ther costs in providing care, insurance companies will maintain the current level of reimbursement, thereby providing more funds for unreimbursed care.

(E) Even though philanthropic donations have traditionally provided some support for the the hospitals, such donations are at present declining.
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Re: United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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New post 13 Sep 2005, 10:28
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B here too. D is tempting but the passage states that insurers have been STRICTLY limiting theiry payments at or below costs.
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Re: United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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New post 14 Sep 2005, 04:33
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OA is B

The primary way hospitals have covered the cost of unreimbursed care is no longer available to them. It follows that they have three options: finding a new way to cover costs, reducing costs by giving less unreimbursed care, or suffering a loss.
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Re: United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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New post 08 Jun 2011, 20:52
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ruturaj wrote:
United States hospitals have traditionally relied primarily on revenues from paying patients to offset losses
from unreimbursed care. Almost all paying patients now rely on governmental or private health insurance to pay
hospital bills. Recently, insurers have been strictly limiting what they pay hospitals for the care of insured patients to amounts at or below actual costs.

Read the paraphrase very carefully. Its a small trick

Which of the following conclusions is best supported by the information above?

(A) Although the advance of technology has made expensive medical procedures available to the wealthy,Maybe true but its not what we are looking for
such procedures are out of the reach of low-income patients.
(B) If hospitals do not find ways to raising additional income for unreimbursed care, they must either deny some of that care of suffer losses if they give it. Correct Answer since hospitals wont have funds this is what they will have to do
(C) Some patients have incomes too high for eligibility for governmental health insurance but are unable to afford private insurance for hospital care.out of scope
(D) If the hospitals reduce their costs in providing care, insurance companies will maintain the current level of reimbursement, thereby providing more funds for unreimbursed care.
if read this carefully, even if hospitals reduce costs, insurance cos. will maintain current level of reimbursement - which is up to the actual cost or below it. So if cost goes down, reimbursements will as well.

(E) Even though philanthropic donations have traditionally provided some support for the hospitals, such
donations are at present declining.Nothing is mentioned regarding this in the passage
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Re: United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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New post 16 Jun 2011, 06:12
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Look at it this way

Conventional scenario: Hospital spends 1000 bucks on treating a patient. The patient pays back 1100 bucks to the hospital for the treatment helping the Hospital make a profit.

Scenario with private health insurance firms: Hospital spends 1000 bucks on treating a patient. The patient's insurer pays back only 900 bucks to the hospital. So the hospital is making a loss.

The last line shows that in the above example an insurance company will at the maximum pay 1000 bucks and not more for treatment. So the hospitals do not stand a chance to make money.

Option D explains that by cutting their operating costs (i.e. bringing down the cost of treatment lower than 900) they will continue to make profits.
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Re: United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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New post 06 Aug 2013, 19:28
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mridulbr wrote:
Look at it this way

Conventional scenario: Hospital spends 1000 bucks on treating a patient. The patient pays back 1100 bucks to the hospital for the treatment helping the Hospital make a profit.

Scenario with private health insurance firms: Hospital spends 1000 bucks on treating a patient. The patient's insurer pays back only 900 bucks to the hospital. So the hospital is making a loss.

The last line shows that in the above example an insurance company will at the maximum pay 1000 bucks and not more for treatment. So the hospitals do not stand a chance to make money.

Option D explains that by cutting their operating costs (i.e. bringing down the cost of treatment lower than 900) they will continue to make profits.


Hi Mridul,

I think we need to read option D more carefully.

(D) If the hospitals reduce their costs in providing care, insurance companies will maintain the current level of reimbursement, thereby providing more funds for unreimbursed care

Can we say anything about insurance companies? Whether they will maintain current level of reimbursement or not? Does the passage say anything about when insurers adjust their payments to the hospitals?

Think about these.

Thanks,
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Re: United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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New post 01 Nov 2016, 20:00
kimmyg wrote:
Official Guide for GMAT Verbal Review, 2nd Edition

Practice Question
Question No.: 75
Page: 147
Difficulty:



United States Hospitals have traditionally relied primarily on revenues from paying patients to offset losses from unreimbursed care. Almost all paying patients now rely on governmental or private health insurance to pay hospital bills. Recently, insurers have been strictly limiting what they pay hospitals for the care of insured patients to amounts at or below actual costs.

Which of the following conclusions is best supported by the information above?

(A) Although the advance of technology has made expensive medical procedures available to the wealthy, such procedures are out of the reach of low-income patients.
(B) If hospitals do not find ways of raising additional income for unreimbursed care, they must either deny some of that care or suffer losses if they give it.
(C) Some patients have incomes too high for eligibility for governmnetal health insurance but are unable to afford private insurance for hospital care.
(D) If the hospitals reduce their costs in providing care, insurance companies will maintain the current level of reimbursement, thereby providing more funds for unreimbursed care.
(E) Even though philanthropic donations have traditionally provided some support for the the hospitals, such donations are at present declining.


US Hospitals have relied on revenues from paying patients to offset losses from unreimbursed care .
Almost all paying patients reply on government or private insurance .
Now insurers have been limiting on what they pay .
Type- Inference
Pre-Thinking - If one of sources of incomes decreases , then hospitals will to find new ways to raise income or suffer losses

(B) If hospitals do not find ways of raising additional income for unreimbursed care, they must either deny some of that care or suffer losses if they give it. - Correct
(D) If the hospitals reduce their costs in providing care, insurance companies will maintain the current level of reimbursement, thereby providing more funds for unreimbursed care.
Out of scope - we do not know what insurance companies will do
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Re: United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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New post 18 Sep 2017, 14:59
United States Hospitals have traditionally relied primarily on revenues from paying patients to offset losses from unreimbursed care. Almost all paying patients now rely on governmental or private health insurance to pay hospital bills. Recently, insurers have been strictly limiting what they pay hospitals for the care of insured patients to amounts at or below actual costs.

Which of the following conclusions is best supported by the information above?


(A) Although the advance of technology has made expensive medical procedures available to the wealthy, such procedures are out of the reach of low-income patients.
- adding "advanced technology" = new info. nowhere in passage is new tech included/mentioned. could very well be current/old tech that is currently being used

(B) If hospitals do not find ways of raising additional income for unreimbursed care, they must either deny some of that care or suffer losses if they give it.
- correct as is

(C) Some patients have incomes too high for eligibility for governmental health insurance but are unable to afford private insurance for hospital care.
- "some" = any #. nowhere in passage is anything mentioned about patients who have income too high vs. patients whose income fall too low.

(D) If the hospitals reduce their costs in providing care, insurance companies will maintain the current level of reimbursement, thereby providing more funds for unreimbursed care.
- we have no reason to believe insurance co's will maintain the current level of reimbursement. what happens if it drops/increases?

(E) Even though philanthropic donations have traditionally provided some support for the the hospitals, such donations are at present declining.
- we are given no info to validate the idea that philanthropic donations are declining.

quickest way to go through this problem is POE. learn it. love it. use it.

Kudos please if helpful :)
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Re: United States Hospitals have traditionally relied primarily on revenue  [#permalink]

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New post 09 Jun 2019, 07:05
United States Hospitals have traditionally relied primarily on revenues from paying patients to offset losses from unreimbursed care. Almost all paying patients now rely on governmental or private health insurance to pay hospital bills. Recently, insurers have been strictly limiting what they pay hospitals for the care of insured patients to amounts at or below actual costs.

Which of the following conclusions is best supported by the information above?


This is an inference type question that requires us to find the premises (since there’s no conclusion). We are told that:

  • US hospitals revenues from paying patients use to cover unreimbursed care. (A fact)
  • BUT, now all paying patients use government and private insurance to pay instead. (Here’s our turn!)
  • Recently, the insurance company have limited how much they back and that amount is often lower than actual costs. (Oh, so the revenue for the hospitals must not be covering as much as before?)

We are looking for an answer choice that connects the change in insurance coverage for paying patients to the revenue of hospitals. According to our anticipated answer, it looks like (B) is our winner.

(A) Although the advance of technology has made expensive medical procedures available to the wealthy, such procedures are out of the reach of low-income patients.
This answer choice brings in an irrelevant distinction between the expenses of wealthy and low-income patients that are driven by technology. This distinction isn’t made in the argument or relevant.

(B) If hospitals do not find ways of raising additional income for unreimbursed care, they must either deny some of that care or suffer losses if they give it.
This answer choice explains what might happen to revenue and care if the insurance coverage will not cover as much as paying patients used to cover on their own!

(C) Some patients have incomes too high for eligibility for governmnetal health insurance but are unable to afford private insurance for hospital care.
This is a distinction that isn’t relevant to our argument. We are not trying to differentiate between government or private insurance.

(D) If the hospitals reduce their costs in providing care, insurance companies will maintain the current level of reimbursement, thereby providing more funds for unreimbursed care.
We don’t know how insurance companies will react to unreimbursed care when current level is maintained. This is also not necessarily true from our facts.

(E) Even though philanthropic donations have traditionally provided some support for the the hospitals, such donations are at present declining.
This is not relevant.

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Re: United States Hospitals have traditionally relied primarily on revenue   [#permalink] 09 Jun 2019, 07:05
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