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     Home >> GMAT >> Essays >> Essay - 106


    The following appeared in a memo to the Saluda town council from the town’s business manager. “Research indicates that those who exercise regularly are hospitalized less than half as often as those who don’t exercise. By providing a well-equipped gym for Saluda’s municipal employees, we should be able to reduce the cost of our group health insurance coverage by approximately 50% and thereby achieve a balanced town budget.” Discuss how well reasoned . . . etc.

       In this memo Saluda’s business manager recommends that the town provide a gym for its employees as a means of balancing the town’s budget. The manager reasons that since studies show that people who exercise regularly are hospitalized less than half as often than those who don’t exercise, Saluda could save approximately 50% on the cost of its group health insurance coverage by providing its employees with a well-equipped gym. The savings on insurance would balance the town’s budget. The manager’s argument is unconvincing because it rests on several unsupported and dubious assumptions.

    First, the manager assumes that Saluda’s employees will exercise regularly if a well-equipped facility is provided for them. This assumption is questionable since the mere fact that a gym is made available for employee use is no guarantee that they will avail themselves of it at all, let alone on a regular basis.

    Second, the manager assumes that Saluda’s employees do not exercise regularly. Once again, the manager offers no support for this crucial assumption. Obviously, if all of Sauda’s employees already engage in daily exercise, the hospitalization rate will be unaffected by equipping an exercise facility and no savings will be realized on the group health insurance.

    Third, the manager assumes that there is a direct relation between the hospitalization rate for employees and the cost of their group health insurance such that a reduction in the hospitalization rate will result in a corresponding reduction in the cost of insurance. While this may turn out to be true, the manager has failed to offer any evidence for this claim.

    Finally, the manager assumes that the cost of building a well-equipped exercise facility will not negate the savings realized on the group health insurance. Until evidence has been provided to show that this is not the case, the manager’s plan is unacceptable.

    In conclusion, the business manager’s proposal to provide an exercise facility as a means of balancing Saluda’s budget is not convincing. To strengthen the argument, evidence would have to be provided for each of the assumptions listed in the previous analysis.




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