Some Managed Care Plans Use Physicians, Hospitals, and Health Care

question 11

Multiple Choice

Some managed care plans use physicians, hospitals, and health care organizations that agree to make medical services available to insureds at discounted fees. Insureds are not required to use these entities, but if they do, health care costs are less than if these entities are not used. Such health care entities are called

• A) Preferred Provider Organizations (PPOs).
• B) Health Maintenance Organizations (HMOs).
• C) Blue Cross/Blue Shield Plans.
• D) Health savings accounts (HSAs).

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Definitions:

Total Variable Costs

The sum of all costs that vary with the level of output, including costs for raw materials, labor, and other expenses that increase as production increases.

Marginal Cost

Additional expense associated with making one more unit of a product, focusing on the variable cost component increase.

Total Costs

The sum of all costs incurred in the production of goods or services, including both fixed and variable costs.

Marginal Cost Curve

A graphical representation showcasing how the cost of producing one additional unit of a product varies with the quantity of the product produced.