The government of the province of Laputa (in the Republic of Ivarrona) has installed Telemedicine Kiosks in many urban and rural locations in the country. These Kiosks have medical devices that can capture many important elements of patient vitals - including blood pressure, body temperature, etc. The medical devices have a secure chip that will analyze and transmit this information to the central hub. This chip is called 'Transmit Secure' (TS chips from here onwards). Each kiosk needs to have exactly one TS chip installed inside the kiosk securely.

The total cost of manufacturing n TS chips by the government is given by:

TC(n)= 10 + (n/2)

The total cost of installing m units of TS chips by the government is given by:

TC(m)= 10 + (m/4)

Answer questions 4 & 5 based on the information above.

Based on the information given above, only one of the following statements is correct. Identify the correct statement.

	a.	The average cost of manufacturing n units of TS chips is increasing in n.
	b.	The total cost of manufacturing n units of TS chips is decreasing in n.
	c.	The manufacturing of these TS chips is not characterized by scale economies.
	d.	The average cost of installing m units of TS chips is constant (neither increasing nor decreasing in m).
	e.	The marginal cost of installing m units of TS chips is constant (neither increasing nor decreasing in m).

5 points

QUESTION 5

A third-party company offers to manufacture and install, up to 16 TS chips for a total fixed fee of 33 (disregard currency units). The company will charge the same amount even if the government asks it to manufacture fewer TS chips or just install TS chips and not manufacture them or just manufacture TS chips and not install them. The government will need exactly 16 TS chips in all. Should the government take the third-party company up on its offer? Which of the following alternatives below provides the most accurate description of the government's best option?

	a.	The government should both manufacture and install the TS chips.
	b.	The third-party company will be asked to both manufacture and install the TS chips.
	c.	Ask the company to manufacture the TS chips but the government will install the TS chips.
	d.	Government will manufacture the TS chips but the third-party company will be asked to install the TS chips.
	e.	All options lead to exactly the same total cost for the government (the government can choose any option above).

5 points

QUESTION 6

Hospitals often face a trade-off between offering higher-quality care and the cost of care delivery. ICT and Telemedicine services can have an impact on this trade-off. The statements below describe the role that ICT and Telemedicine play in this context. Three of the following statements are wrong. Identify all the wrong statements.

	a.	ICT & Telemedicine may help hospitals lower the cost of care by helping hospitals schedule scarce resources more efficiently.
	b.	ICT & Telemedicine can help lower the cost of higher quality care by enabling better information flow to patients only if the hospital is able to support the 'Facilitated Network' model in addition to the existing modes of care delivery.
	c.	ICT & Telemedicine could enable hospitals that have implemented a fully functional EMR (or EHR) system to merge with or acquire entities that use the VAPD model of care delivery because fully functional EMRs (or EHRs) will transform these entities into a Solution Shop model of care providers.
	d.	A fully functional EMR (EHR) is more important for a VAPD model of care delivery than it is for a Solution Shop.
	e.	ICT & Telemedicine may help hospitals deal better with some of the problems of escalation in scale and scope of work.

5 points

QUESTION 7

Answer questions 7 and 8 based on the information below and the information contained in the question statement.

Wearable Intelligence Systems (WIS from here onwards) is a company that combines Telemedicine with information extracted from patients using wearable medical devices and home-based patient monitoring technologies. Patients wear one or more devices (depending on their afflictions) that track their activity levels, sleep patterns, heartbeat, etc. This information is combined with other devices at home to make patient profile. The data is sent to a data repository where WIS uses a set of predictive algorithms and pattern recognition technologies to infer if there are serious situations that are developing in the context of a patient's condition. WIS can also communicate its findings with the patient's doctors (PCPs and/or other caregivers). WIS can also support multi-party video and audio calls and enable patient-physician electronic interactions.

Based on the above description of WIS's services, which of the following statements below is most accurate?

	a.	This technology will help integrate the three models of care delivery - Solution Shops, VAPD model of care delivery and Facilitated Networks - by bringing together universal patient ID based insights.
	b.	This technology is not useful when the patient's care deliverer operates on a VAP model of care delivery.
	c.	By enabling patients access the information and insights in a Facilitated Network, this technology greatly amplifies the benefits of Telemedicine.
	d.	None of the four statements above is fully correct.

5 points

QUESTION 8

Refer to the description of the WIS and its services to answer this question. Based on that description, one of the statements below is correct. Identify the correct statement.

	a.	The WIS suite of services will result in automating the work done by administrative staff.
	b.	The WIS suite of services shows no complementarities between the capabilities of Telemedicine systems and pattern recognition technologies in the quality of health care to patients.
	c.	As the prediction accuracy and pattern recognition capabilities of these algorithms extend to more clinical contexts and telemedicine becomes more mainstream, it is possible that the combination of the two will lead to more effective utilization of scarce human and physical resources.
	d.	WIS is a first step in transforming Solution Shops to VAP model of delivery. As Telemedicine becomes more mainstream and machine learning is more widely applied, the WIS suite of services will result in Solution Shops become VAPDs and then Facilitated Networks.

5 points

QUESTION 9

Telemedicine in Stonefort Hospitals

Answer questions 9 through 15 based on the information below and the information contained in the question.

Stonefort Hospital (SH from here onwards) is attached to Stonefort University Medical School and is known for its exceptionally advanced specialties and sophisticated treatments that it delivers to patients, especially those suffering from very serious afflictions. Many of its specialties - such as Oncology, Neurology, Orthopedics, Pediatric Cardiology, and Diabetes and Endocrinology divisions - are considered the very best in the world. SH has implemented an EHR system that is now fully functional across all divisions of the hospital. SH is considering the adoption of one of two Telemedicine products. These are called Tele Simple and Tele Master, respectively. SH's culture is very similar to that of Stanford Hospitals (in the case we discussed). Interpersonal relationships between heads of specialties and between decision-makers are a very important element in SH's functioning.

Tele Simple is a relatively simple package that allows the patient to connect with the doctor via a camera. Depending on the quality of the patient's camera (and related tech setup), a patient chooses what she (he) wants to do during the tele consultation. This can be easily integrated with the hospital's EHR, can be used to send output to billing systems and ordering systems, and can connect to physician scheduling systems used at SH. Tele Simple also allows each specialty and physician to use other Telemedicine technologies that can be used in conjunction with Tele Simple. In other words, Tele Simple provides a basic suite of services, and physicians are allowed to use their own preferred best-of-breed platforms that can work 'on top of' the Tele Simple layer (think of the Operating System of a computer - it provides a set of basic services and users can use their preferred software packages to work with these systems). Tele Simple can be modified, and the makers of the product transfer for free - to the hospital's IT team - the information needed to help modify the package and/or connect it to the hospital's other systems. Tele Simple can be bought for the whole hospital, and all its functional units (divisions/specialties) or individual units can buy just those modules of Tele Simple that they want.

The other package, called Tele Master, is a highly sophisticated package that comes with preconfigured modules for each specialty of SH. Each module has an advanced set of features that physicians can use but not modify. Physicians can pick and choose which features to use (from the ones available in Tele Master) but cannot use any other off-the-shelf or customized Telemedicine software with Tele Master. Tele Master can send its output to select electronic systems in the hospital but does not allow the hospital to modify the product. Tele Master offers training that takes considerable time and effort to complete but is considered the best in the industry. After physicians undergo the training successfully, they become power users of the system. Tele Master can be bought for the whole hospital, and all its functional units (divisions/specialties) or individual units (divisions/specialties) can buy just those modules of Tele master that they want.

Pricing:

Tele Simple Inc. (the company that sells Tele Simple) will sell the whole package or individual modules to hospitals for a price that depends on the number of licensed users of the package. The price will increase with the number of users. We call this the 'Standard Pricing' scheme. The Standard Pricing scheme is binding only for a quarter. Every 3 months, the hospital can decide to renew the licenses (or change the number of licenses) or not renew them at all. The company will allow users to modify the software as they want for their use (but not sell it to others). The company will support its users and offers several different support plans. It will also release periodic updates that customers can upgrade to (or not). There are many third-party developers and software companies that offer support for Tele Simple and have developed several products that work with Tele Simple.

Tele Master Inc. (the company that sells Tele Master) will sell the whole package or individual modules to its customers (hospitals) for a price that depends on the number of licensed users of the package. The price will increase with the number of users. We call this the 'Standard Pricing' scheme. The Standard Pricing scheme is binding only for a quarter. Every 3 months, the hospital can decide to renew the licenses (or change the number of licenses) or not renew them. Tele Master Inc. also offers a novel pricing scheme called 'Pay For Use' - where hospitals pay a fixed fee upfront - that is less than 15% of the price under the standard pricing scheme - and pay a usage fee for each patient they see and each time they use the product (assume that it is possible to track usage and charge such a fee). This scheme is offered at the level of each module of Tele Master or for the whole system (for the entire hospital). If hospitals choose the Pay For Use option, they can change after a quarter. In other words, after three months, they can move to the 'Standard Pricing' option if they want. Hospitals can choose what works best for them and can mix and match the different pricing schemes (Standard pricing for some specialties and 'Pay For Use' for some others). In other words, every three months, they can change the pricing scheme and switch between schemes if they want.

Tele Master will NOT allow users to modify the software. The company will support its users and offers several different support plans. The support services offered by Tele Master are considered the very best in the industry, and users of the product rate the support very highly. It will also release periodic updates that customers can choose to upgrade to (or not).

Answer questions 9 through 15 based on the information above and the information contained in the question statement.

One of the following statements is wrong. Identify the wrong statement.

	a.	It is possible for SH to use Tele Simple for some specialties and Tele Master for others, even if it requires considerable effort to take the output of Tele Master and send it to those systems that work with Tele Simple.
	b.	Given SH's culture, using a package such as Tele Master that does not work with best of breed platforms for the individual specialties will not result in resistance to adoption from users (specialists), because many of these specialties are the very best in the world and others too are very good. Experts at this level of excellence are highly flexible and innovative.
	c.	SH could implement Tele Master in a couple of specialties as a pilot project and depending on specialists' reaction to Telemedicine decide whether or not to adopt the package going forward.
	d.	SH could implement Tele Simple in a couple of specialties as a pilot project and depending on specialists' reaction to Telemedicine decide whether or not to adopt the package going forward.

5 points

QUESTION 10

Refer to the information given in Q9.

Which of the following statements best describes the strengths and/or weaknesses of one or both packages?

	a.	Specialties can start with Tele Simple and if they face demands of increasing scale and scope of activities, they can adopt best of breed packages for their specialties as needed.
	b.	Tele Simple is an excellent choice for SH if it must provide rapid responses (speed) for some patient conditions, but is a poor choice for hospitals if it faces an increase scope of activities.
	c.	Tele Simple is an excellent choice for SH if it faces an increase in scale of activities, but will not work well with increase in scope.
	d.	Tele Master is an excellent choice for SH if it faces an increase in scope of activities but is a poor choice for SH if it must provide rapid responses (speed) for some patient conditions.
	e.	Statements (b), (c) and (d) together provide the best description of the strengths and/or weaknesses of the one or both packages.

5 points

QUESTION 11

Payment and Pricing: SH is trying to decide between the two products and the pricing schemes. Based on the pricing schemes discussed above, which of the following statements is most accurate?

	a.	If SH decides to adopt Tele Simple for some specialties and Tele Master for others, then it should go with the Standard Price option as it minimizes the problems of making the two packages work together and exchange information between platforms.
	b.	Suppose SH decides to adopt Tele Master for all its specialties. In that case, it should choose the Standard Pricing option for all divisions so that it can lower its risk, especially if patients reject the Telemedicine services and/or these services have low adoption rates.
	c.	If SH does not need to modify the Telemedicine software often, and faces a rapid increase in scale of Telemedicine adoption by patients, then it should choose Tele Master and the Pay For Use option.
	d.	The three alternatives above (a), (b) and (c) taken together provide the most complete description of the SH's choices.
	e.	All four statements above are incorrect.

5 points

QUESTION 12

SH has decided to buy Tele Master for 2 (out of its 18) divisions. Both divisions require the same number of licenses. Let us call these two as Division 1 and Division 2, respectively. The demand for Telemedicine services offered by Division 2 will start with a low number (say 10 tele consultations) and quadruple every quarter. The demand for Telemedicine services offered by Division 1 is highly unpredictable. Each quarter it can vary between 0 and 600 tele consultations, and all values in between are equally probable (i.e., the demand can take any value between 0 and 600 with equal probability).

Furthermore, the demand faced by Division 1 in any quarter is independent of the demand in other quarters (and/or of the demand faced by Division 2). Assume that there is a small cost (of back-office work) associated with switching between options. You may assume that the two pricing options charge similarly when there are 300 tele consultations.

Based on this, which of the following statements describes the best option (choice) open to SH?

	a.	SH should choose the 'Standard Pricing' option for Division 1 and then switch to the Pay for Use option after a few quarters; for Division 2, it should choose the 'Pay for Use' option in the first quarter and switch between options each quarter.
	b.	SH should choose Standard Pricing for Division 1; for Division 2, it should choose the 'Pay for Use' option and switch between the two schemes every two quarters.
	c.	SH should choose the 'Pay for Use' option for Division 2 for the first quarter and may switch to the Standard Pricing option a few quarters later but not switch back after that; for Division 1, SH should choose the 'Standard Pricing' option for the first quarter and decide whether or not to switch at the start of each quarter depending on the previous quarter's demand.
	d.	If the cost of switching between the two options is very small - say less than 3% of the Price - then both Divisions should start with the Standard Pricing option; Division 2 should not switch, but Division 1 should switch between options each quarter to minimize its fees.
	e.	SH should choose the 'Pay for Use' option for Division 2 for the first quarter and may switch once to the Standard Pricing option a few quarters later, but should not switch back after that; for Division 1, SH could choose either option for the first quarter and not switch after that.

5 points

QUESTION 13

SH is also considering the extent of Lock-In and Switching Costs that it must manage when it makes a choice. SH has an excellent in-house IT division. Its programmers, database administrators, and tech support professionals are considered to be highly capable. Which of the following options about SH's switching cost is most accurate?

	a.	Tele Master is a proprietary system that cannot be modified. Once SH chooses Tele Master, whatever the pricing option, its IT division cannot make any modifications to the package and it will be locked in.
	b.	The lock-in and switching cost aspects associated with either platform are manageable. It can choose a pricing scheme that allows it to switch after a quarter if it needs to.
	c.	SH should choose Tele Simple for half its specialties and Tele Master for the other half. It can switch between the two every quarter. By experimenting with the two packages, it can determine exactly which one works best for what division.
	d.	The threat of 'lock-in & switching costs' with both platforms is the same. If SH chooses Tele Master, it cannot use other off-the-shelf packages and will be locked into Tele Master. If it chooses Tele Simple and uses other off-the-shelf (best of breed) Telemedicine packages, it will be locked into Tele Simple because those packages may not work with Tele Master.

5 points

QUESTION 14

Currently, SH offers a patient health care portal to its patients, where patients can upload information about themselves, see clinical test results, and describe their symptoms that clinicians can access. SH is going to expand the portal to support the upload of videos and audio material and make social networks for SH's patients. One of the statements about the two packages is correct in the context of SH's patient portal. Identify the correct statement.

	a.	The information given about the SH's portal and the two packages is not enough to determine which of the two packages will work best with it.
	b.	From the description, it is clear that Tele Simple is better suited for processing numeric and text-based information in the Portal, while Tele Master is better suited to process text and numeric information as well as to work with information that resides in other media formats such as videos, audio, and pictures. So, SH should start with Tele Simple and then move to Tele Master.
	c.	Suppose the portal will soon feature patient support groups and patient social networks (hosted within the portal), where patients and physicians may want to see (or process) information in different types of media (in addition to text). In that case, Tele Master is the best choice for SH, and it should move to Tele Master straightaway.
	d.	SH should start with Tele Simple and Standard Pricing scheme. As the capabilities of the portal expand, SH should move to Tele Master and Standard pricing. When the portal reaches its full suite of capabilities and wide adoption by patients and physicians, it should move to Tele Master and Pay for Use pricing.

5 points

QUESTION 15

Exactly one of the statements about Telemedicine in SH is wrong. Identify the wrong statement.

	a.	To implement the Telemedicine initiative successfully, SH should engage with a consulting company that is known for its deep technical capabilities. It should also call in a management consulting company to study the potential benefits associated with Telemedicine offerings. Outsourcing is always a better choice when it comes to IT projects.
	b.	The extent to which Telemedicine is used and yields benefits may differ across the different specialties in SH.
	c.	Some patients may, over time, prefer Telemedicine based interaction with specialists to meeting with the specialist in person, if possible. The extent to which this happens may differ across specialties or types of ailments.
	d.	To implement the Telemedicine initiative across the hospitals, SH should consider forming a multi-functional team drawn from many different specialties.

5 points

QUESTION 16

Answer questions 16 through 18 based on the information below and the information in the question.

Digital Disruption Comes to Healthcare

A company called Telemedicine Sans Frontiers (TSF from here onwards) is trying to make an 'Uber Model' of specialist care delivery. TSF wants to pair specialist physicians worldwide with patients in the US (eventually, they may expand to other geographies). They use a Telemedicine platform and a new business model to bring what they call a 'disruptive service' to care delivery. In this model, TSF has signed up a set of specialists worldwide in various specialties (cardiologists, pediatrics, orthopedic surgeons, oncologists, endocrinologists, psychiatry, and so forth). They provide a platform through which patients can connect to an available specialist in some parts of the world (Estonia, Chile, Philippines, Morocco, Thailand, New Zealand, India, etc.). Patients can specify their preferences (language, geography, years of experience, etc.), and TSF's system will find a match (where possible) between patient preferences and specialist capabilities. The advice offered by the overseas specialist is not binding; these specialists cannot prescribe drugs, nor can they issue any official documents. Think of this as a service where a specialist listens to a patient (like a close friend or a family member who is a specialist physician) and offers advice/opinions. The advice is not meant to have any legal/official purpose. For now, ignore the legal and policy implications and assume that this is doable (indeed, there are variants of this idea that are being tried).

The TSF software (app) supports teleconferencing via laptops, handheld devices, and smartphones. TSF also sells additional high-resolution cameras and other support devices (high-quality audio systems, scanners, etc.) for patients who want it. TSF software also supports patient uploading test results, etc. The software portals allow the specialist to send e-mails, voice mails, etc., which the patient may or may not share with her physician in the US. The price charged by TSF is paid (in its entirety) by the patient. It charges roughly 8% of what a specialist in the US would charge for the same service. For instance, if an Oncologist charges $500 in the US for a consultation, the TSF service will cost the patient $40 (8% of $500). TSF has worked out the average fee for each specialty and charges 8% of that fee. TSF will keep 10% of the fee for each transaction and pay the specialist the remaining amount (90% of the fee). In this example, TSF will keep $4.00, and the specialist will receive $36.00.

TSF wants to take a leaf out of Uber's book and offer physician ratings. Patients using the TSF service will be able to rate specialists on a set of factors, such as understanding of their context, diagnosis accuracy, etc. The aggregate scores received by specialists on each dimension will be posted online (within TSF's portal). In addition, patients can specify minimum scores in one or more of these factors as a part of their search preferences (here, TSF differs from Uber).

Which of the following statements about TSF's business model is most accurate?

	a.	TSF always charges 8% of a fixed amount and always gives the specialist 90% of the total revenue. This is a pricing model based on 'Fee for Service' and not 'Fee for Outcome.' Therefore, TSF's business model is a Solution Shop, and the specialist's work is a combination of Value Added Process Delivery and a Facilitated Network.
	b.	The specialist operates on a Solution Shop model while TSF's business model is a combination of VAPD model and a Facilitated Network.
	c.	TSF is a Solution Shop and the Specialist network is a Facilitated Network.
	d.	TSF's business model is a Facilitated Network, and thus, TSF needs to cater to both sides (physicians members and patient members).

5 points

QUESTION 17

A private, for-profit insurance company - Digital Era Insurers (DEI from here onwards) - is considering running a pilot project where it will cover one Tele-consultation a quarter for its customers (patients) that want to use the TSF platform. Which of the following statements below offers the best reason for DEI to cover this service?

	a.	Suppose its members (patients) and their doctors are able to detect some serious health conditions early on by discussions with specialists via TSF. In that case, TSF's service may play the role of very cheap preventive (preventative) care. This may save some money for DEI by diminishing the need for expensive care delivery in the advanced stages of an affliction.
	b.	TSF's platform is a matching market; It matches the demand for a specialized service with the suppliers of that service. Economics tells us that if these markets work well, they will bring great efficiencies to all participants in the market.
	c.	Given the shortage of specialists in many areas of the country (and the long waiting times to see some specialists), this is an efficiency-enhancing mechanism priced very reasonably (at 8%). Therefore, it will lead to greater availability of specialists for patients who really need a face-to-face consultation - i.e., in cases of more complicated afflictions that are unsuitable for Tele consultations.
	d.	Statements (a) and (c) together provide the most complete reason for DEI to cover TSF's service.

5 points

QUESTION 18

Which of the following statements below best describes the implications of the TSF rating system for specialists (physicians)?

	a.	The ratings system will take some time to build up to a critical mass. TSF should make ratings a part of the search specifications after there are enough ratings to make them reliable.
	b.	The ratings system may result in specialists with higher ratings generating more demand for their services, while lower rated specialists may see lower levels of demand.
	c.	Specialist ratings will cause lower-rated specialists to receive smaller fees and higher-rated specialists to receive higher fees. Eventually, this will result in a two-tier system of low fees and low demand and high fees and higher demand.
	d.	Statements (a) and (b) together best describe the implications of TSF's rating system.