Three General Strategies That Health Plans Use for Controlling Types

question 184

Multiple Choice

Three general strategies that health plans use for controlling types of risk are risk avoidance, risk transfer, and risk acceptance. The following statements are about these strategies. Three of these statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

• A) Generally, the smaller the likely benefits of accepting a risk, and the lower the costs of avoiding that risk, the greater the likelihood that a health plan will elect to avoid the risk.
• B) A health plan is seldom able to transfer any of the risk that utilization rates will be higher than expected and that its cost of providing healthcare will exceed the revenues it receives.
• C) If a risk is a pure risk from the point of view of a health plan, then the health plan most likely will attempt to avoid the risk.
• D) A health plan would most likely transfer some or all of its utilization risk if it pays a provider a rate that is based on the number of plan enrollees that choose the provider as their primary care provider (PCP).

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Definitions:

Requirement of Writing

The requirement of writing specifies that certain agreements or contracts must be in written form to be legally binding and enforceable.

Mental Incapacity

A condition where an individual lacks the ability to make decisions because of mental health issues or intellectual disabilities.

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A contract that has been fully performed by all parties involved, with all terms satisfied and obligations met.

Essential Terms

The main conditions or stipulations that are crucial to the validity and execution of a contract or agreement.