Answered Essay: Answer each question separately please from the book of economics for healthcare manager

Case 1.1 An Upset Customer

Do negotiated fees really vary as much as this case suggests?

Are hospitals buying increasing numbers of medical practices?

Do prices typically go up when a hospital buys a practice?

What is a high-deductible insurance plan?

Are high-deductible plans becoming more common?

Is buying medical practices a profitable strategy for hospitals?

If you were this customer, how would you react?

Expert Answer


1) As per the case, Yes, Negotiated fees shall vary. Higher facility fee has to be borne by the patients. And the facility would inturn increase the quality of the services provided in the hospital, which inturn increase the rates. Hence, fee does vary.

2) Yes, most of the hospitals are buying the increased number of medical practices. Since more than a half century, physicians are been hired by the hospitals. Physicians are also looking out for employment in contractual basis in larger facilities. This enables then to work independently with the hospital in contractual terms.

Increase in the number of practitioners from different fields working for the healthcare organizations will increase the medical practices as well.

3) Yes, the prices of the services would certainly go up when hospital buys a practice. When a hospital buys a practice, it is a cost to the hospital. Purchasing a practice takes some share from the budget. With the help of the practise, the amount used to purchase a practise is recoved from the patients in the form of a fee.

4) High deductable plans have low monthly premium when compared to other insurance plans. In this, a large number of costs need to be borne by the patient and rest of the amount is borne by the insurance company. The payment of such an insurance is unbeatable.

5) High deductable plans are becoming more common in the market these days. In the high deductable plans, the maximum cost is borne by the patients or the customers, and the employer will have profit since insurer gives the maximum cost.

6) Buying medical practices will increase the cost in many ways. Employing more number of physicians mean, increase in the salary and other costs like renting a bigger place, staffing costs etc. These costs put a pressure on the hospital.

7) Increased cost will always have a burden on the patients’ pockets. Hence, the costs like hidden costs, and other inflated costs need to be materialized to ensure that burden is reduced on the patients. If i were a customer, i would look at the best optimal option.

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