Chapter 4: Financing of Health Care: Context for Community/Public Health Nursing
1. What approach have nurses historically used when providing care and paying attention to costs?
a. Giving the best possible nursing care regardless of ability to pay
b. Giving whatever care the nurse has the expertise to give
c. Giving whatever care the patient could afford
d. Giving whatever care the patient desired and for which he or she was willing to pay
Historically, cost was not considered relevant to the practice of nursing. The topic of cost was ignored by both clinicians and educators.
DIF: Cognitive Level: Knowledge REF: p. 87
2. Which of the following is true about access to care?
a. Care providers have always donated necessary services to make sure everyone received care.
b. Health care is rationed by the ability to pay.
c. Poverty-stricken patients received care from medical and nursing school students in teaching hospitals.
d. Universal access has always been a component of health care in America.
Health care is rationed by the ability to pay. A person’s financial status affects the quality and quantity of care that he or she receives.
DIF: Cognitive Level: Comprehension REF: p. 87
3. A nurse educator teaches community/public health nursing students about how health care is financed in the United States. Why is it important that nursing students receive this information?
a. Nurses are expected to help patients find funding sources to pay for their care.
b. Nurses have to restrict their care to services that are financially reimbursed.
c. Health care organizations must charge patients for all supplies consumed while care is given.
d. Health care organizations must notify patients of the exact cost of the nursing services rendered.
Nurses do have to charge for supplies used but can do so without understanding health care financing. In a position dealing with community/public health, advocating for a client may include making referrals to agencies that may be able to meet their needs on the basis of patient finances. All nurses have to focus on is giving care consistent with agency deadlines, which in turn must focus on reimbursement regulations in order to continue to be able to exist and provide care.
DIF: Cognitive Level: Application REF: p. 87
4. A nurse has chosen to provide home care services to a needy client even though there is no source of reimbursement for this care. What problem may result?
a. The nurse will be expected to provide this care to other clients.
b. The nurse may not be covered in case of a malpractice claim.
c. The agency’s clients will start demanding that the staff provide free care.
d. The agency’s clients will be at risk for being billed for the services provided.
The real danger that exists is that the nurse will not be covered in case of a malpractice claim because the service was not first sanctioned by the agency. The nurse should not be expected to provide free care to other clients because of the legal risks involved. Because it is stated there is no source of reimbursement for this client, the client is not at risk for being billed for the services provided. It is doubtful that other clients would start demanding free care as a result of this incident.
DIF: Cognitive Level: Application REF: p. 87
5. A community/public health nurse is providing home care services to an elderly couple. They report that they believe they are spending more and more money on health care services and have limited funds available to meet their everyday living expenses. Which of the following offers the best explanation for their situation?
a. The proportion of the gross domestic product devoted to health care is increasing.
b. The health care costs are increasing for the elderly population.
c. The cost of living is increasing because of recent rapid inflation.
d. The cost of health care is increasing because more people are insured.
As a result of the increasing proportion of the gross domestic product (GDP) devoted to health care, individuals and families spend more on health care and have less to spend on food, clothing, housing, schooling, leisure, and other needs or interests. The number of elderly persons in the population has increased, but the health care costs are increasing for everyone, not just this population. Both the cost of living and the cost of health care are increasing because of inflation. Higher numbers of uninsured and underinsured clients have also increased the cost of health care.
DIF: Cognitive Level: Application REF: pp. 87-88
6. Which of the following was true concerning the amounts paid by private funds and governmental funds in 2009?
a. Government spent 49%, and private funding accounted for 51%.
b. Government spent 75%, whereas private funding accounted for 25%.
c. Government spent 40%, whereas private funding accounted for 60%.
d. It is unknown what proportion of funds was governmental and what proportion was private.
In 2009, governments at all levels provided 49%, and private funding provided 51%.
DIF: Cognitive Level: Comprehension REF: p. 88
7. A community/public health nurse is examining how health care dollars are distributed in the United States. Which of the following information would the nurse find in the literature?
a. The majority of health care dollars are spent on health promotion activities.
b. The percentage of health care dollars spent on public health activities is increasing.
c. The percentage of health care dollars spent on health care advances is increasing.
d. The majority of health care dollars are spent on personal health care services.
Personal health care services account for 84% of the entire health budget. Hospital care is the most costly category. Public health, research, and construction together account for 9% of the entire budget.
DIF: Cognitive Level: Application REF: p. 88
8. Which component of government is primarily responsible for health research spending?
a. The federal government, through the Centers for Disease Control and Prevention
b. The federal government, through the National Institutes of Health
c. State governments, through grants to state universities and research centers
d. State governments, through local public health departments in cooperation with local researchers
The federal government bears the major responsibility for research, and most funds are distributed by the National Institutes of Health.
DIF: Cognitive Level: Knowledge REF: p. 89
9. A community/public health nurse is working with vulnerable populations in the community. Which population would be most likely to not have health insurance?
a. Elderly persons who do not qualify for Social Security
b. Homeless persons who lack a permanent address
c. Working poor persons whose jobs lack health insurance as a benefit
d. Young families who have not yet saved enough to qualify
The working poor have low-paying jobs that lack benefits and therefore cannot afford to pay for services.
DIF: Cognitive Level: Application REF: pp. 89-90
10. Self-payment of health care costs are
a. Almost never done because that is the purpose of health insurance.
b. Frequently done because many employers do not offer a health insurance benefit.
c. Frequently done by paying for one’s own insurance to ensure coverage.
d. Usually done by paying co-payments and deductibles required by insurance.
Today, self-payment is usually accomplished through co-payment and deductibles required by insurance companies, as well as additional out-of-pocket costs for services not provided by insurance plans.
DIF: Cognitive Level: Knowledge REF: p. 90
11. A community/public health nurse is visiting a nuclear family. Both of the parents are employed full-time, have a moderate income, and have health insurance. Which of the following is the most likely source of their health insurance?
a. Employer-paid insurance
b. Federal government–subsidized health insurance
c. Medicare/Medicaid program
d. Private-paid insurance
Currently, the most common form of health insurance is employer-provided insurance, although its availability is decreasing.
DIF: Cognitive Level: Application REF: p. 91
12. A company’s chief executive officer (CEO) discusses potential ways to control employee health care costs with the organization’s occupational health nurse. Which of the following recommendations would the nurse be most likely to suggest?
a. Suggest employees exercise and stop smoking to retain their employment.
b. Encourage the use of generic prescriptions and outpatient services.
c. Consider layoffs to decrease the number of employees who receive insurance.
d. Reward employees who have limited health care expenses.
Cost-containment strategies are becoming routine in employer-provided group health insurance plans as employers’ costs continue to escalate. Employer cost-containment strategies include reimbursement for generic-only prescriptions; increasing reliance on second opinions for surgery; and increased reliance on outpatient surgery.
DIF: Cognitive Level: Analysis REF: p. 91
13. A community/public health nurse is discussing insurance options with a healthy, young adult client who has recently lost her job. Why would the client most likely not be receptive to obtaining privately paid health insurance?
a. Health care services can be obtained at a local free clinic.
b. She prefers to spend her money on higher priority needs than insurance.
c. The monthly premiums are just too high to be affordable.
d. She has no need for insurance because she is young and healthy.
Individuals and families may not obtain privately paid insurance because they live in a state where insurance companies are not required to offer it or, especially if they are members of a high-risk group, because they cannot afford it. For low-income and marginal middle-income individuals, the premium costs are simply unaffordable. Private insurance is usually purchased only by persons who have regular employment and an adequate income to do so. Services provided at free clinics cannot meet all of the client’s potential health care needs. It is highly recommended that all persons have health insurance because of the large expense associated with receiving care.
DIF: Cognitive Level: Analysis REF: p. 91
14. Why was the Health Insurance Portability and Accountability Act (HIPAA) not successful at making insurance more available?
a. It provided for medical savings accounts, which were not what people wanted.
b. It focused primarily on protecting the confidentiality of patient records, not insurance.
c. It was repealed shortly after its passage.
d. It did not limit what companies could charge for the insurance.
The bill guarantees access for individuals who just left an insurance plan and requires renewal of coverage, but it does not limit the amount an insurer can charge for the insurance; therefore, the premiums may be too expensive for the majority of persons eligible to purchase insurance.
DIF: Cognitive Level: Comprehension REF: p. 92
15. A community/public health nurse is working with a low-income family that has children and is uninsured. What recommendation made by the nurse would assist the children in obtaining health care?
a. Visit a free clinic at the health department.
b. Apply for Medicare.
c. Apply for the Children’s Health Insurance Program (CHIP).
d. Visit the local pediatrician’s office.
Low-income children who are not covered by other types of assistance programs may have health insurance coverage through CHIP, which took effect in 1997. Medicare is a federal program for elderly and disabled persons. A free clinic may meet short-term needs but will not help with long-term access to health care services. Visiting the local pediatrician’s office will not assist this family in obtaining health insurance, which is what is necessary when they receive health care.
DIF: Cognitive Level: Analysis REF: p. 93
16. With regard to the effectiveness of the Medicare program, it can accurately be said that the program
a. Ensured that elderly persons received appropriate care.
b. Helped reduce health care costs.
c. Prevented elderly persons from suffering any major financial hardships.
d. Improved access to health care services for eligible persons.
Although the program is unable to prevent elderly recipients from suffering financial destitution, reduce health care costs, or ensure that the elderly receive appropriate care, it has vastly increased health care access for clients who are eligible and has helped reduce poverty among elderly people.
DIF: Cognitive Level: Comprehension REF: p. 94
17. How are the funds obtained to pay for the Medicare program?
a. A “Medicare” tax paid by all employees who pay Social Security tax
b. A tax on wages paid by employer and employee
c. Money from the federal income tax paid by all citizens
d. Social security funds paid by employer and employee
A 1.45% tax of a worker’s salary is paid by both employer and employee, regardless of whether the employee pays into Social Security.
DIF: Cognitive Level: Knowledge REF: p. 94
18. Research has demonstrated that which of the following relationships is true with regard to paying for care?
a. The higher the co-payment, the less health care the person seeks.
b. The higher the co-payment, the more the patient thinks the care was “worth the cost.”
c. The lower the co-payment, the more compliant patients become with the suggested treatment.
d. The lower the co-payment, the more patients feel they can always get the care later.
There is an inverse relationship between services used and rate of payment; the higher the co-payment, the less people request service.
DIF: Cognitive Level: Comprehension REF: p. 94
19. The primary criticism that may truthfully be made of the Medicare program is that it
a. Does not meet the most serious medical needs of the population it serves.
b. Has inadequate controls on the amounts paid to health care providers.
c. Has not sufficiently reduced taxpayer cost.
d. Lacks adequate funding, and Medicare taxes continue to increase.
Medicare has not changed substantially since it began, but benefits have been restricted as costs rise so that it does not meet the most serious medical needs of the population it serves. The greatest cost burdens are placed on poor persons because their out-of-pocket expenses reflect a larger proportion of their incomes than does the cost to persons with larger incomes.
DIF: Cognitive Level: Knowledge REF: pp. 95-97
20. An elderly client reports that he has been told that he needs to “spend down” in order to be eligible for Medicaid. He is confused about what he needs to do in order to accomplish this task. Which of the following statements is the best response from the community/public health nurse?
a. “You will have to spend your own money to pay for the Medicaid premiums.”
b. “You will have to spend your own funds until you are eligible for Medicare.”
c. “You will have to exhaust most of your assets before receiving benefits.”
d. “You will have to meet a certain deductible amount before receiving benefits.”
“Spending down” is the process whereby elderly persons must exhaust most of their own assets, paying medical bills until they qualify for Medicaid, the program for the poor.
DIF: Cognitive Level: Application REF: p. 95
21. For which of the following clients will care not be reimbursed by Medicare?
a. A terminally ill client who is receiving hospice care
b. A client who is hospitalized for pneumonia
c. A client who requires intermittent skilled home health care
d. A client who needs long-term care in a nursing home
Neither Medicare nor private Medigap insurance will pay for custodial nursing home care, the type of care required by most elderly nursing home residents. Medicare does provide coverage for hospice services, hospitalizations, and intermittent skilled home health care.
DIF: Cognitive Level: Application REF: p. 95
22. What is the main problem with Medicare Part D?
a. The plan allows elderly persons to purchase medications from certain mail-order companies.
b. The plan covers generic, not brand-name, drugs.
c. Medicare recipients are confused by what the plan will or will not cover.
d. There is a coverage gap in which recipients have to pay full cost of drugs.
The concern with Part D is the coverage gap, or “doughnut hole.” If an elderly person’s drug costs exceed a certain amount, then the individual pays the full cost of medications between that amount and the end of the gap. In 2012, the gap starts at $2930 and ends at $4700 (out-of-pocket personal cost of drugs of $1570, in addition to monthly premium costs).
DIF: Cognitive Level: Knowledge REF: p. 97
23. What is notable about Medicare Advantage?
a. Because it is a new program, no one has yet seen any problems with this aspect of Medicare.
b. Insurance salespeople have been very careful in explaining this program to elderly persons.
c. More insurance companies are marketing such plans to elderly persons.
d. Unless the elderly person is very healthy, the plan may cost more than the original Medicare.
Although the program is new, problems are beginning to surface. A total of 39 states report abuses related to deceptive marketing and misrepresented benefits. When states became concerned about such practices, several companies suspended marketing to elderly persons. Subscribers are locked into the plan for 1 year, so they are unable to change policies if they discover the plan is more expensive, not less.
DIF: Cognitive Level: Knowledge REF: p. 97
24. Of the following, persons, who is most likely to receive Medicaid benefits if the family income is below the poverty level?
a. A 16-year-old child
b. A pregnant woman with a 3-year-old child
c. A single-parent family
d. A two-parent family in which the father is unemployed
The federal government requires that benefits be extended to pregnant women and children younger than 6 years if family income is at or below the nationally set poverty level.
DIF: Cognitive Level: Application REF: p. 99
25. Of the following persons, who is most likely not to receive benefits under Medicaid, regardless of financial status?
a. A 3-year-old child
b. A 21-year-old pregnant woman
c. A single-parent family
d. A two-parent family
In general, the following needy groups are excluded: single persons and childless couples who are not elderly or disabled; most two-parent families; families with a parent who works at a low-paying job unless they have very low incomes as determined by state Temporary Assistance to Needy Families (TANF) criteria; and legal aliens who entered the United States on or after August 22, 1996 (are barred for 5 years).
DIF: Cognitive Level: Application REF: p. 100
26. Which of the following populations accounts for the majority of the cost in the Medicaid program?
a. Children younger than 5
b. Elderly persons
c. Low-income families
d. Single pregnant women
Elderly, blind, and disabled persons, who represent 21% of the participants, use 63% of the Medicaid budget.
DIF: Cognitive Level: Comprehension REF: p. 102
27. The major method used to reduce costs to third-party payers has been to
a. Change the eligibility requirements.
b. Convert reimbursement to a retrospective payment plan.
c. Require all clients to choose a managed care plan for reimbursement.
d. Set fee schedules to restrict increases in provider payment.
Although many methods are being used to cut health care costs, the major method has been to change the eligibility requirements so that fewer people receive benefits.
DIF: Cognitive Level: Knowledge REF: p. 102
28. A community/public health nurses states that the United States has an integrated health care system. What is meant by this statement?
a. The larger for-profit managed care organizations are absorbing smaller organizations so that eventually only three to five large companies will exist.
b. Large organizations are trying to own or control a complete range of health care facilities to meet all health care needs of their enrollees.
c. Large managed care organizations are employing attorneys as employees to ensure that no malpractice suit against them can be successful.
d. Physicians are choosing to become employees to avoid paying for malpractice insurance and therefore are being absorbed into hospital systems.
Integrated systems are a growing trend. Large companies own or control a complete range of health care facilities and provide service to a large population of consumers. Their goal is to provide all health care required by their enrollees. They save money by controlling the type of services provided.
DIF: Cognitive Level: Application REF: p. 102
29. Which of the following statements most accurately summarizes the current view of health care in the United States?
a. The government should allow Americans to receive the health care they can afford.
b. The government should trust the free market system.
c. The government should assume responsibility for providing basic care to all.
d. The government should provide basic care to those who cannot care for themselves.
According to the current system, it might be concluded that while there is strong disagreement over whether health care is a right or a privilege and whether it should be government controlled or continue with the free market system, most Americans believe that at least some care should be given to all citizens; hence, the government funds care for specific at-risk groups. The increasing concern is the lack of access to health care for many people for whom the government is not a guarantor of last resort. The new Health Care Reform Law is an attempt to expand health insurance coverage to more of the population (although it still may not be expanded to all).
DIF: Cognitive Level: Comprehension REF: p. 103
30. As part of the orientation program at a local public health department, the newly hired nurse learns about the resources that are available in the community. What is the reason for including this information?
a. So that the nurse is able to advise clients on how to obtain food stamps
b. So that the nurse is able to determine who is eligible for certain services
c. So that the nurse will be able to include other departments in providing care
d. So that the nurse will be able to refer clients to the appropriate resources
Nurses need to know about community resources to refer families to appropriate resources for which the families may be eligible. Referral is often just a matter of matching clients to existing programs for which they qualify. This does not mean that nurses must become experts in program criteria, application processes, and benefit packages, but they should become aware of existing programs, the types of clients who are generally served by those programs, and the name and phone number of the initial contact for such programs.
DIF: Cognitive Level: Analysis REF: p. 105
31. Which of the following actions demonstrates the community/public health nurse advocating for the community?
a. Encouraging the media to run personal interest stories on needy clients
b. Becoming an active member of a professional nursing organization
c. Offering to organize a fundraising campaign for needy families
d. Suggesting appropriate agencies where families can receive services
To create improved health care systems, nurses must be aware that systems are subject to change. Nurses work both individually through political action and collectively as members of professional nursing associations to improve the health care system. The other actions do not demonstrate the role of nurse as advocate for the entire community.
DIF: Cognitive Level: Analysis REF: p. 106
1. What are the primary reasons for the ongoing increase in health care costs in the United States? (Select all that apply.)
a. Changes in population demographics
b. Improved end-of-life care
c. Ongoing research studies
d. Periodic financial inflation
e. Rising expectations by consumers
f. Technologic advances
ANS: A, D, F
Heavy inflation occurs periodically and affects all services, including health care. Demographics in the United States have changed; there is an increasing aging population, which has created additional demand. Finally, technologic advances have been enormous but also expensive.
DIF: Cognitive Level: Comprehension REF: p. 108
2. On what basis can Medicare be criticized? (Select all that apply.)
a. Even after age 65, many elderly citizens are not eligible for Medicare.
b. Medicare pays less than half of recipients’ health care costs, which is a major hardship for many recipients.
c. Medicare does not protect elderly people from financial destitution when they pay for needed care.
d. Most physicians and hospitals do not accept Medicare recipients.
e. Until 2007, the premiums were the same whether the recipient was very wealthy or very poor.
f. Until 2011, Medicare paid for procedures in hospitals but not in outpatient settings.
ANS: B, C, E, F
Several major criticisms have been made of Medicare, primarily around institutional bias, service restrictions, and lack of equity. Medicare would not pay for less expensive outpatient procedures but only for inpatient hospital-based procedures until 2011. As cost sharing is an aspect of the program, the government has increased co-payments to reduce usage. Co-payments are a major hardship for a large percentage of elderly persons. Medicare pays less than half (45%) of health care costs. Justice is not served, inasmuch as both wealthy clients and poverty-stricken clients must pay the same amount for the same benefits, although in 2007 premiums for wealthy persons (income above $82,000/year) were increased. Lastly, the program was created to protect elderly persons from financial destitution. Those who have a major illness over a period of time cannot afford needed health services. Eventually they will exhaust their assets and then may be eligible for Medicaid.
DIF: Cognitive Level: Comprehension REF: p. 109