Which of the Following Statements Concerning HMOs Is False

question 124

Multiple Choice

Which of the following statements concerning HMOs is false?

• A)HMO plans often provide extensive coverage of basic health care benefits.
• B)Critics of HMOs argue that participating physicians may have a financial incentive to hold back medical care.
• C)Hospital stays for patients of HMOs are longer than those with traditional health care insurance.
• D)Those with larger families and younger children often find HMOs are more likely to financially prefer an HMO over traditional insurance.

---

Definitions:

Financial Leverage

The strategy of using loans to increase the prospective benefits of an investment.

Debt/Equity Ratio

A gauge for comparing the mix of a company's funding through shareholders' equity versus debt, frequently applied to understand the company's use of financial leverage.

Retained Earnings

Retained earnings represent the portion of net income left after dividends have been paid to shareholders, which is then reinvested in the business.

Static Theory

A concept in economic theory that assumes conditions remain constant over time.