Exam 5: The Economics of Health Care

Why is the study of asymmetric information associated with the market for "lemons"?

Figure 5-5 Figure 5-5 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. -Refer to Figure 5-5.If consumers paid the full price of medical services,the price they would pay is

________ tended to increase spending on health care in the United States.

College education tends to result in a negative externality because the recipient does not receive the full benefit of the education.

In the United States,out-of-pocket spending on health care was ________ percent of all health care spending in 2011.

In the United States,out-of-pocket spending on health care per person

On average,people in high-income countries ________ than people in low-income countries.

In the United States in 2012,the percentage of people with some form of health insurance was about

A goal of ________ is to give patients an incentive to pay more attention to the prices of medical services.This would tend to increase economic efficiency by decreasing the costs of medical services.

A typical consumer of health care in the United States

In which of the following countries are substantial co-payments typically required as a part of the health care system?

________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

In addition to covering the costs of unpredictable events,health insurance typically covers many planned expenses,such as routine checkups,annual physicals,and the cost of vaccinations.because of this,health insurance

Typically,the lower the level of income per person in a country,the lower the level of spending per person on health care.This relationship between income and spending indicates that health care is a

How can increases in a country's total income improve health?

Adverse selection refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off.

In the United States,doctors and hospitals that provide most health care are

Article Summary Administrative overhead costs resulting from insurance companies handling reimbursement claims is in large part the reason that health care in the United States is much more expensive than in other countries. An analysis on the administration costs of health care in the United States found that roughly 30 percent of the costs of health care are administrative and that more than 25 percent of health-sector employees work in administration. Health insurance companies are often paid a fixed percentage of the claims they administer, which gives them little to no impetus to increase efficiency and keep costs down. -Refer to the Article Summary.Even if insurance companies were more efficient and brought administrative costs down,consumers would still pay less than the full cost of medical treatment.This would result in the market equilibrium price of medical services being ________ than the efficient equilibrium price,and the market equilibrium quantity of medical services being ________ than the efficient equilibrium quantity.

In 2014,the average life expectancy at birth in the United Kingdom and other high-income countries was around ________ years.

How do adverse selection and moral hazard affect the market for insurance?