PBHL 600ES – Health Management and Leadership

Executive MPH Program

PBHL 600ES – Health Management and Leadership

Fall 2017

Salud Digna Assessment

NAME:________________________________________

Figure 1

1. Line D0 above represents consumer demand for Salud Digna’s optometry

services in her satellite clinics. A shift in market demand occurs when factor(s)

other than price affects quantity demanded. For Figure 1, describe a scenario

that could explain an outward shift in consumer demand for optometry

services provided by SD’s satellite clinics from D0 to D2.

__________________________________________________________

__________________________________________________________

__________________________________________________________

__________________________________________________________

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Figure 2

2. Line S0 above represents the market supply for dialysis services in Mexico

A shift in market supply occurs when factor(s) other than price affects

quantity supplied. For Figure 2, describe the scenario presented in the Salud

Digna case that could explain an outward shift in the market supply of

dialysis services from S0 to S1.

__________________________________________________________

__________________________________________________________

__________________________________________________________

__________________________________________________________

3. Assuming that the theory of supply explains behavior, if Mexico Americano’s

costs for MRI scans drops because of reduced resource costs for equipment

and material in the market for MRI scans, will that lead Salud Digna to:

a. Increase the volume of MRI scans provided to its patients

b. Decrease the volume of MRI scans provided to its patients

c. Maintain the same level of MRI scans provided to its patients

d. Cannot be determined

3

Figure 3

4. In Figure 3 above, dotted lines show various price points and corresponding

demand for Pregnancy Tests among fertility aged Mexican women. Shade the

triangle(s) that would indicate shortage in the supply of pregnancy tests.

5. If in Figure 3, E correctly depicts a point of equilibrium price, quantity

demanded and quantity supplied, does it represent a model of perfect

competition:

a. YES

b. NO

c. Cannot be determined from this figure

6. Assuming that the theory of demand explains behavior, if a consumer has a

budget constraint does this mean that that he/she:

a. Has to balance indifference for goods that satisfy utility

b. Has limited ability to move to a higher equilibrium price if current prices

increase

c. Cannot increase quantity demanded without a positive change in income

d. All of the above

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Figure 4

7. Figure 4 shows supply (S) and demand (D) for diabetes tests. If the graph

correctly depicts a competitive market for all patients, does point P represent:

a. Efficiency

b. Breakeven

c. Profit Maximization

d. All of the above

Figure 5

8. Using Figure 5, if Salud Digna forgoes profit maximization to meet consumer

demand for Pap tests, at what level of (Q) will it produce:

a. Q 1

b. Q 2

Demand for Pap Tests

5

Figure 6

9. The hypothetical Price Elasticity of Demand (PED) for screening exams relative to the price of travel for rural Mexicans to a Salud Digna clinic is 3.5; meaning that for every 10% increase in the price of travel, the demand for screening exams decreases by 35%. Identify the Elasticity line in Figure 6 that describes the PED of screening exams relative to travel costs.

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10. If the PED for an electrocardiogram performed in a hospital is 4.1 and new

employees with the government who are required to get an EKG must pay the

out-of-pocket difference not covered by public insurance; would a new

employee most likely: (Circle the letter of your response)

a. Use Salud Digna outpatient EKG services as substitute for hospital care

b. Use Salud Digna outpatient EKG services as a complement to hospital care

c. Neither of the above

11. Match the Mexican health insurance plans to following comparable US health

insurance programs: Federal Employees Health Benefits Program, Tricare

(Department of Defense Military Health System), ACA subsidized health

insurance.

SEDENA _________________________

Seguro Popular _________________________

ISSSTE _________________________

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12. Using Exhibits 3 and 4 below, for 2008, calculate the Total Profit Margin, Debt

Financing Percentage, Current Ratio and Days Cash on Hand. SHOW ALL WORK

Permission granted from Harvard Business Publishing to post Salud Digna financial statements

Green = Operating Revenues Red = Operating Expenses Blue = Non-operating Gains

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13. The data below compares the financial ratios of Quest Diagnostics (the

world’s largest, for-profit, medical diagnostics firm) to the US medical diagnostics

industry average. In the Salud Digna case, the organization needed to decide

between remaining as an NGO or converting to for-profit corporation.

Using the data, compare these ratios to the financial ratios you calculated for

Salud Digna and present an argument in 100-150 words for whether Salud Digna

should stay an NGO or convert to a for-profit entity.

Quest Diagnostics

US Industry Average

Total Profit Margin 11.0% 6.2% Debt Financing Percentage 36% 33%

Current Ratio 1.47 1.74

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14. In 2006, Salud Digna demonstrated a profit margin of -2.20%. If we were to

use a benchmark of 3.1% (half of the US Industry Average) and revenues of

$2,284,326, what level of expenses would Salud Digna have needed to meet in

2006 in order to achieve a Total Profit Margin of 3.1%? SHOW ALL WORK

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15. In 2012, Salud Digna was approved by the International Development Bank

for a $7 million social impact bond issuance to finance the development of new

clinics in Mexico. If an investor purchased $10,000 in these bonds at a coupon

rate of 7.5% earned semi-annually, what will be the bond proceeds for this

investor at the end of 10 years when the bond matures? SHOW ALL WORK