Smal Community Hospitals

[SmarpanGamt]

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?

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

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


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.

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.

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

ur OA
Please explain E. and your OA

[rkanthilal]

IMO C

The passage describes a circle of events that results in small community hospitals consistently losing money. The events are as follows:

1. High revenue specialists, such as surgeons, flock to hospitals that are more prestigious and can afford to pay higher salaries.
2. Local residents go to the more affluent nearby hospitals when they need specialty care and only utilize the local hospital for low-margin routine care.
3. Most of the community uses government health plans, which reimburse poorly for routine care, or lacks insurance entirely and cannot pay.
4. This results in the local hospital then losing money. Therefore, the local hospital cannot afford to hire specialists to conduct the higher-margin specialty care. (This completes the cycle)

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

(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." Correct. The passage states that local hospitals are losing money because they can only provide low margin routine care and they are not able to provide the higher-margin specialty care. The reason the local hospitals cannot provide specialty care is because they are not able to afford the salaries of specialists. By partnering with a nearby affluent hospital to contract its specialists on a part-time basis, the local hospitals would be able to provide the higher-margin specialty care while also keeping their costs down. This will help solve their profitability problems.

(E) "Negotiate with private insurers for higher reimbursement rates for routine care." Incorrect. The passage states that most people use government health plans. These government plans reimburse poorly for routine care. This answer is incorrect because it discusses "private insurers". This is beyond the scope of what is described in the passage.