The health-care economy is replete with unusual and even unique

Question

The health-care economy is replete with unusual and even unique economic relationships. One of the least understood involves the peculiar roles of producer or “provider" and purchaser or “consumer" in the typical doctor-patient relationship. In most sectors of the economy, it is the seller who attempts to attract a potential buyer with various inducements of price, quality, and utility, and it is the buyer who makes the decision. Where circumstances permit the buyer no choice because there is effectively only one seller and the product is relatively essential, government usually asserts monopoly and places the industry under price and other regulations. Neither of these conditions prevails in most of the health-care industry.

In the health-care industry, the doctor-patient relationship is the mirror image of the ordinary relationship between producer and consumer. Once an individual has chosen to see a physician-and even then there may be no real choice-it is the physician who usually makes all significant purchasing decisions: whether the patient should return “next Wednesday,” whether X-rays are needed, whether drugs should be prescribed, etc. It is a rare and sophisticated patient who will challenge such professional decisions or raise in advance questions about price, especially when the ailment is regarded as serious.

This is particularly significant in relation to hospital care. The physician must certify the need for hospitalization, determine what procedures will be performed, and announce when the patient may be discharged. The patient may be consulted about some of these decisions, but in the main it is the doctor's judgments that are final. Little wonder then that in the eyes of the hospital it is the physician who is the real  “consumer.”  As a consequence, the medical staff represents the “power center" in hospital policy and decision-making, not the administration.

Although usually there are in this situation four identifiable participants-the physician, the hospital, the patient, and the payer (generally an insurance carrier or government)-the physician makes the essential decisions for all of them. The hospital becomes an extension of the physician; the payer generally meets most of the bona fide bills generated by the physician/hospital; and for the most part the patient plays a passive role. In routine or minor illnesses, or just plain worries, the patient's options are, of course, much greater with respect to use and price. In illnesses that are of some significance, however, such choices tend to evaporate, and it is for these illnesses that the bulk of the health-care dollar is spent. We estimate that about 75-80 percent of health-care expenditures are determined by physicians, not patients. For this reason, economy measures directed at patients or the general public are relatively ineffective.   1 
 1. The author's primary purpose is to

(A) speculate about the relationship between a patient's ability to pay and the treatment received 
(B) criticize doctors for exercising too much control over patients 
(C) analyze some important economic factors in health care 
(D) urge hospitals to reclaim their decision-making authority 
(E) inform potential patients of their health-care rights

2 
 2. It can be inferred that doctors are able to determine hospital policies because

(A) it is doctors who generate income for the hospital 
(B) most of a patient's bills are paid by his health insurance 
(C) hospital administrators lack the expertise to question medical decisions 
(D) a doctor is ultimately responsible for a patient's health 
(E) some patients might refuse to accept their physician's advice

3 
 3. According to the author, when a doctor tells a patient to “return next Wednesday," the doctor is in effect

(A) taking advantage of the patient's concern for his health 
(B) instructing the patient to buy more medical services 
(C) warning the patient that a hospital stay might be necessary 
(D) advising the patient to seek a second opinion 
(E) admitting that the initial visit was ineffective

4 
 4. The author is most probably leading up to

(A) a proposal to control medical costs 
(B) a discussion of a new medical treatment 
(C) an analysis of the causes of inflation in the United States 
(D) a study of lawsuits against doctors for malpractice 
(E) a comparison of hospitals and factories

5 
 5. The tone of the passage can best be described as

(A) whimsical 
(B) cautious 
(C) analytical 
(D) inquisitive 
(E) defiant

6 
 6. With which of the following statements would the author be likely to agree?

I. Most patients are reluctant to object to the course of treatment prescribed by a doctor or to question the cost of the services.

II. The more serious the illness of a patient, the less likely it is that the patient will object to the course of treatment prescribed or to question the cost of services.

III. The payer, whether insurance carrier or the government, is less likely to acquiesce to demands for payment when the illness of the patient is regarded as serious.

(A) I only 
(B) II only 
(C) I and II only 
(D) II and III only 
(E) I, II, and III

7 
 7. The author's primary concern is to

(A) define a term 
(B) clarify a misunderstanding 
(C) refute a theory 
(D) discuss a problem 
(E) announce a new discovery

8 
 8. The most important feature of a “consumer" as that term is used in  highlighted text  is that the “consumer" is the party that

(A) pays for goods or services 
(B) delivers goods or services 
(C) orders goods or services 
(D) reimburses a third party for goods or services 
(E) supplies goods and services to a third party

avi12345 · Accepted Answer

1. The author's primary purpose is to 
(A) speculate about the relationship between a patient's ability to pay and the treatment received 
(B) criticize doctors for exercising too much control over patients 
(C) analyze some important economic factors in health care 
(D) urge hospitals to reclaim their decision-making authority 
(E) inform potential patients of their health-care rights

In the 1st part author talks about a generalization - introduction of the concept of provider and consumer. In the 2nd part, author talks about the premises - how Doctors are really consumers not the patients - to draw the conclusion that economy measures directed at patients or general public are relatively ineffective.

The main idea is therefore, author talks about trends such as doctor is really the consumer in health care. This is idea is clearly offered by option C - analyze some important economic factors in health care

2. It can be inferred that doctors are able to determine hospital policies because 
(A) it is doctors who generate income for the hospital 
(B) most of a patient's bills are paid by his health insurance 
(C) hospital administrators lack the expertise to question medical decisions 
(D) a doctor is ultimately responsible for a patient's health 
(E) some patients might refuse to accept their physician's advice

Citing "Little wonder then that in the eyes of the hospital it is the physician who is the real “consumer.” As a consequence, the medical staff represents the “power center" in hospital policy and decision-making, not the administration." , Doctors are consumers, hence bread earners for the hospital. As a result, they are able to determine hospital policies. The idea is represented by option 'A' - it is doctors who generate income for the hospital

3. According to the author, when a doctor tells a patient to “return next Wednesday," the doctor is in effect 
(A) taking advantage of the patient's concern for his health 
(B) instructing the patient to buy more medical services 
(C) warning the patient that a hospital stay might be necessary 
(D) advising the patient to seek a second opinion 
(E) admitting that the initial visit was ineffective

Same idea that doctor is consumer. So when doctor tells patient to come back on 'Wednesday', he/she is instructing the patient to buy more service. Hence Option B - instructing the patient to buy more medical services - is correct.

4. The author is most probably leading up to 
(A) a proposal to control medical costs 
(B) a discussion of a new medical treatment 
(C) an analysis of the causes of inflation in the United States 
(D) a study of lawsuits against doctors for malpractice 
(E) a comparison of hospitals and factories

The conclusion of the passage is that since doctors are main consumers, economy measures directed at patients or the general public are relatively ineffective. Or in other words, author is proposing to control medical costs by focusing economy measures at doctors - consumer rather than general public. hence, Option (A)- a proposal to control medical costs - is correct.

5. The tone of the passage can best be described as 
(A) whimsical 
(B) cautious 
(C) analytical 
(D) inquisitive 
(E) defiant

The author is analyzing the passage without raising his/her own voice in the passage except for drawing a conclusion based on the facts - premises. Hence, option C - Analytical is correct.

6. With which of the following statements would the author be likely to agree? 
Ⅰ. Most patients are reluctant to object to the course of treatment prescribed by a doctor or to question the cost of the services. 
Ⅱ. The more serious the illness of a patient, the less likely it is that the patient will object to the course of treatment prescribed or to question the cost of services. 
Ⅲ. The payer, whether insurance carrier or the government, is less likely to acquiesce to demands for payment when the illness of the patient is regarded as serious. 
(A) I only 
(B) II only 
(C) I and II only 
(D) II and III only 
(E) I, II, and III - correct - based on lines below

"It is a rare and sophisticated patient who will challenge such professional decisions or raise in advance questions about price, especially when the ailment is regarded as serious." and "In routine or minor illnesses, or just plain worries, the patient's options are, of course, much greater with respect to use and price. In illnesses that are of some significance, however, such choices tend to evaporate,and it is for these illnesses that the bulk of the health-care dollar is spent."

7. The author's primary concern is to 
(A) define a term - No term has been defined 
(B) clarify a misunderstanding 
(C) refute a theory - no theory has been suggested to refute
(D) discuss a problem 
(E) announce a new discovery - there is no new discovery

Little confused between B and D. Although the last 2 lines say 'We estimate that about 75-80 percent of 
health-care expenditures are determined by physicians, not patients. For this reason, economy measures 
directed at patients or the general public are relatively ineffective.'. This shows that author is discussing a problem along with what caused the problem. - hence D , but it can also be a clarifying a misunderstanding between consumer and producer - B. 
I am more inclined towards D as this goes well with overall passage. 
'

8. The most important feature of a “consumer" as that term is used in line 33 of the passage is that the “consumer" is the party that 
(A) pays for goods or services - incorrect - this is insurance or govt
(B) delivers goods or services - out of scope
(C) orders goods or services - Correct - as doctor acts as consumer and orders medical services
(D) reimburses a third party for goods or services - incorrect - insurance or govt
(E) supplies goods and services to a third party - out of scope

jaituteja · Answer

Hi,

Can anyone explain how doctor's are acting as consumers??? 
I could not understand this part in the passage where in the eyes of the hospitals, doctors are the consumers..

3. According to the author, when a doctor tells a patient to “return next Wednesday," the doctor is in effect
(A) taking advantage of the patient's concern for his health
(B) instructing the patient to buy more medical services
(C) warning the patient that a hospital stay might be necessary
(D) advising the patient to seek a second opinion
(E) admitting that the initial visit was ineffective

Why is A incorrect and B correct in this question???

4. The author is most probably leading up to
(A) a proposal to control medical costs
(B) a discussion of a new medical treatment
(C) an analysis of the causes of inflation in the United States
(D) a study of lawsuits against doctors for malpractice
(E) a comparison of hospitals and factories

The passage discusses more about the doctors and how doctors have control over things. Due to the doctors, patients have to incur high medical costs.
Why is D incorrect?? as the passage is emphasising more on the practices of Doctors than talking about medical costs.

Also, in the end the passage states that "We estimate that about 75-80 percent of health-care expenditures are determined by physicians, not patients. For this reason, economy measures directed at patients or the general public are relatively ineffective."

It is the doctors in the end who are responsible..

Please clarify.

6. With which of the following statements would the author be likely to agree?
Ⅰ. Most patients are reluctant to object to the course of treatment prescribed by a doctor or to question the cost of the services.
Ⅱ. The more serious the illness of a patient, the less likely it is that the patient will object to the course of treatment prescribed or to question the cost of services.
Ⅲ. The payer, whether insurance carrier or the government, is less likely to acquiesce to demands for payment when the illness of the patient is regarded as serious.

Can anyone explain how option I is correct????

prepgmat7 · Answer

Hi Guyz,

I have completed this RC within 8 mins,with all the questions correct. Happy for this.

But RC is killing me big time for my exam. My D-day is 5th Sep.

Till now I am not able to achieve consistent accuracy in RC

.
It goes 90%-100% for some passages and for some it is 30-40% only

Can any1 help.... only 10 days are left

Regards

. It goes 90%-100% for some passages and for some it is 30-40% only

Can any1 help.... only 10 days are left

Regards

TheMechanic · Answer

Hi,

Just want to put in my word or two. What is your accuracy in mock tests? You will see that you accuracy will suffer in mocks. This is because of
- mental exhaustion
- time crunch and other related factors.
We have to master this bit. I have tried to simulate the environment by taking 3-4 700 level RC passages and set the timer. Now in order to create a time crunch (as we face in mocks) I tried to allocate the like 9-10mins to a long passage with 6-8 questions and 7-8mins to short one's with 4-5questions. This drill will show you where you stand in terms of accuracy, comprehension etc.

Like yesterday, I did 6 RCs (all 700 level) within 60 mins. My score was 26/34. I found out that more often than not I m doing mistakes in inference based questions. I have started to create a log for myself where I note down things I gather from my mistakes. I will keep these in mind when the next time I do this RC drill. I would suggest you to do this and I hope you will find out where you are going wrong. The problem with doing individual RC passages is that you are not simulating the test conditions in which you have to comprehend the passage. And that becomes the decisive factor.

I am gonna take GMAT in 1st week of September myself.

I too wish to achieve 80-90% accuracy in RC consistently. For me its Work In Progress.

I too wish to achieve 80-90% accuracy in RC consistently. For me its Work In Progress.

prepgmat7 · Answer

Thanks man !!

Do you follow any specific approach for improving your inference questions ?
Means how do you change your way of reading and comprehending, once you have the error log.

Coz as far as I understand, answers completely depend on the way we comprehend.

Regards

TheMechanic · Answer

Hi,

It does depend on the way we comprehend the passages. I have noticed that, I generally get the correct answer once I re-do the inference questions which I got wrong.

So this may mean a couple of things:-
-either i am rash when selecting the answer choices.
-I am losing the perspective of inference which is needed to answer the question.
-i am not concentrating hard enough and not actively reading the text (Active reading: Being involved in the passage and Answer choices).

There is certainly nothing wrong with my thinking, since I get the answer correct in 2nd attempt. So I have planned to give that extra 10-20 seconds to these questions and be absolutely sure of the text references from the passage to which these questions relate to. Double check the remaining options and have valid reasons to eliminate the wrong one's. Also at the same time I need to keep the perspective of the textual references from passage fresh in my mind, while answering the question; many a times we lose the references and context while reading a long passage. Actual GMAT RCs are very dense(and not extremely long) and some times may have a lot comprehend. Possibly taking down few notes here and there might help too.

As I said, I am still working on it. But some where I am sure I will get the desired results.

Sajjad1994 · Answer

Explanation

2. It can be inferred that doctors are able to determine hospital policies because

Explanation

Read the text in the passage:

Once an individual has chosen to see a physician-and even then there may be no real choice-it is the physician who usually makes all significant purchasing decisions: whether the patient should return “next Wednesday,” whether X-rays are needed, whether drugs should be prescribed, etc. It is a rare and sophisticated patient who will challenge such professional decisions or raise in advance questions about price, especially when the ailment is regarded as serious.

The health-care economy is replete with unusual and even unique

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GMAT Reading Comprehension (RC) Questions

The health-care economy is replete with unusual and even unique

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