Exam 6: Physicians

In most cases, the physician's charges and the actual payments to the physician by the insurer are not the same, and often differ significantly, as can be seen in a typical "Explanation of Benefits" statement. Why do these differences exist? Does anyone ever pay full charges?

In the short run, the supply curve for physicians is essentially downward sloping due to the licensure requirements.

Discuss the idea of the hospital as the physician's workshop. Why might this idea be more fitting for some specialties, like cardiac surgeons, rather than others, like radiologists?

Physicians often issue prescriptions and referrals for medical services rendered by other providers and, in most cases, they do not stand to benefit financially from those transactions. Suppose, an insurer introduces the following initiative: every time the physician does not prescribe an expensive MRI (magnetic resonance imaging), which may cost anywhere between $700 to more than $2,000 per scan, to a patient complaining of a headache, the doctor is paid a $100 bonus by the insurer. Which of the following will not be true regarding the outcomes of this new policy?

Suppose we allocate a budget for flu shots between physicians and licensed physician assistants. Let MBP equal the marginal benefit from physician administering flu shot and MCP equal the marginal cost of physician administering flu shot. Let MBA equal the marginal benefit from physician assistant administering flu shot and MCA equal the marginal cost of physician assistant administering flu shot. -Assume that the marginal cost of a physician is constant at $500 per hour. The marginal cost of a physician assistant is constant at $50 per hour. Productivity in terms of flu shots per hour is as shown in the following table. ? \# Hours Physician Productivity, Assistant Productivity, Shots per Hour Shots per Hour 0 0 0 1 24 18 2 44 35 3 50 48 Currently, 1 physician hour and 2 assistant hours are employed giving flu shots. We can correctly conclude that

The variation in salary and total compensation for hospital administrators is much greater than that of hospital emergency room physicians. The president of a large, teaching hospital may earn multiples of the salary of the president of a smaller, community hospital. Physicians employed by hospital emergency rooms will have very a much smaller variation in salary. One reason for this is

Most physicians who accept a Medicare assignment generally employ the practice of balance billing their Medicare patients.

Which method(s) of payment to physicians will most likely result in higher total charges due to volume of services provided?

According to the monopoly rents hypothesis of licensure,

Information asymmetry