Small community hospitals in poor urban areas almost always operate at a loss due to an unfortunate cycle of factors. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries. Aware of this, local residents patronize the more affluent nearby hospitals when they need specialty care or forgo care entirely, while only utilizing the local hospital for low-margin routine care. Further, a significant majority of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay. The local hospital then loses money and cannot afford to hire specialists to conduct the higher-margin specialty care.

Which of the following, if it could be accomplished, would best help small community hospitals to break the pattern described above?

A. Negotiate higher reimbursement rates for specialty care with both government health plans and private insurers.

B. Advertise the hospital’s specialty care services in the local community as well as nearby communities to attract more business.

C. Partner with a nearby affluent hospital to contract its specialists on a part-time, as-needed basis, which is more affordable than hiring these specialists full time.

D. Launch a community outreach campaign to educate the public about the low reimbursement rates of government health plans compared with the high rates paid by private insurers.

E. Negotiate with private insurers for higher reimbursement rates for routine care.


OA C

Source: Manhattan Prep