1.In health care, which of the following factors determine the position of a cost curve?

a. Case mix and severity of cases treated

b. Quality of care provided

c. The technology used

d. Amount of fixed factors employed in the production process

e. The incentive system the provider is using

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2.Those question have two answers to choose from;increase or decrease

a. A decrease in the wages of radiological technicians........?

b. An increase in productivity ...........?

c. An increase in the wages of technicians .............?

d. A decrease in the number of patients with multiple and rare problems ...........?

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3.Those question have three answer to choose from;shift the production upward

shift the production function downwardorno shift production function

A change in nurse remuneration from salary to fee for service will................?

A change in policy to provide more thorough examinations will .................?

An increase in nurse wages will shift the production ....................?

An increase in the severity of the patients treated will ...................?

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These are the course topic that should answer the question above, please see below.

Production Function

A production function expresses how output will vary when inputs are changed in quantity.It is usually presented in one of three forms: a table, equation or graph.

The graph example here uses two variables, Labor (L) on the horizontal axis and Capital (K) on the vertical axis.Keep in mind that capital is large machinery or buildings used as input NOT money. If five units of capital are combined with six workers, the firm is able to produce 548 units of output.Different combinations of labor and capital (only two variables) will result in different levels of output.As long as the inputs are used efficiently, the firm will produce exactly the level of output along each curve.When the amount of capital employed is low, relative to the number of workers, the marginal productivity of labor is low relative to the capital. It takes many more workers to make up for a reduction in capital.In other words, substitution of labor for capital is more difficult when capital equipment is scarce relative to the number of workers competing for its use.

Production function illustrates the relationship between the variable input(s) and the amount of total output produced.Graphically, the horizontal axis reflects the variable input and the vertical axis reflects the output.Note the production function gets flatter as the number of variable inputs increases, reflecting diminishing marginal product.This graph is an example of the relationship between the number of nursing hours employed and the amount of total output produced or physician visits provided.If you want to produce 8 visits in a certain time period you are looking at a total of approximately 60 nursing hours.It gets flatter at around 10 visits usually because of capacity, no more rooms to put patients so the nursing staff are stepping over each other making the output inefficient.

Here is another example of how the production function is applied to healthcare where the quantity or level of medical services (q) is on the vertical axis and the personal hours (n) or addition of variable personnel input is on the horizontal axis.The total output is produced by different levels of variable input (short run) holding all other inputs constant (ceteris paribus).Up to n1 there is a steep increase, after n1 the increase in personnel hours increases but at a decreasing rate.N2 is the max and beyond that point additional personnel hours would reduce the quantity of healthcare services.Remember, this is due to fixed capital and in this case it could be a crowded medical facility where the quantity of services produced may begin to decline as congestion and room usage is maximized causing delays and longer wait time which is unsatisfactory to patients.

Remember that in the short run there can be increasing marginal and average product due to the benefits derived from specialization and division of labor.We see this in healthcare, with the substitution of registered nurses vs nurse practitioners, whose scope of practice or specialty can be better utilized depending on the facility.Diverse Specialties of health services and physicians in the same facility can also expand production.However, the law of diminishing return will still occur at some point because capital is fixed in the short run unless the facility is expanded in the long run.

Healthcare Supply

Now we are going to take a closer look at the supply side of healthcare. Just as market demand includes all individuals and organizations currently buying the specific good whether that is drugs, treatments, or imaging, market supply includes all organizations that are currently selling that good or service to them. As we will see the standard economic analysis of supply assumes that a firm is interested in one thing; profit.Even a non-profit organization must cover their costs. External constraints such as the cost of inputs and the technology of production largely determine the shape and position of the supply curve.

1.Total cost is the total resource commitment required to maintain production at any specific level of output. Total cost is the sum of total fixed costs and total variable cost at each level of output.

2.Variable costs are costs that are zero when output is zero and vary as output varies.Examples include wages, electricity, fuel, and raw materials for input to production.The average variable cost is the total variable cost divided by quantity or output. Variable costs depend on two factors: 1. the relationship between output and variable inputs, and 2) the unit cost of these variable resources.

3.Fixed costs that do not vary as output varies and that must be paid even if output is zero.Example include rent, interest on loans, taxes, and insurance.The average fixed cost is the total fixed cost divided by quantity.

4.The average total cost is the average value of resource commitment, which is total costs divided by total output. It is shown as the average fixed cost + average variable cost OR Total cost divided by output or quantity.

5.An economist is always interested in costs per unit of output. Think of marginal as "extra"a good synonym for it.Marginal analysis asks how much it costs to produce an additional unit of output.The equation looks at marginal costs where the change in total cost divided by the change in quantity and is also equal to the change in total variable cost over the change in quantity. Marginal cost is the value of additional resources that must be committed to the production process to produce an addition unit of output.