Exam 7: The Economics of Health Care

Of the following high-income countries, which has the highest life expectancy at birth?

Explain why the rates of death due to kidney disease and diabetes has slightly increased in the United States since 1981.

The overall decline in death rates in the United States since 1981 was due to all of the following except

Two consequences of asymmetric information are adverse selection and moral hazard. An important distinction between the two is

Figure 7-5 Figure 7-5 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. -The provision of the Patient Protection and Affordable Care Act (ACA) which states that, with limited exceptions, every resident of the United States must have health insurance that meets certain basic requirements is the ________ provision.

Over time, people in the United States and other high-income countries have, on average, become taller, which is an indication that their nutritional status has improved.

Suppose that in a market for used cars, there are good used cars and bad used cars (lemons). Consumers are willing to pay as much as $6,000 for a good used car but only $1,000 for a lemon. Sellers of good used cars value their cars at $5,000 each and sellers of lemons value their cars at $800 each. Buyers cannot tell if a used car is reliable or is a lemon. Based on this information, what is the likely outcome in the market for used cars?

In the United States in 2012, the percentage of firms that employed more than 200 workers and did not offer health insurance as a fringe benefit to the workers was about

Replacing employment-based health care with a government-run system could reduce employers payments for their workers insurance, but the amount that they would have to pay in overall compensation

Why might a young, healthy person choose not to buy health insurance?

Over the past 160 years in the United States, life expectancy

The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as adverse selection.

What has happened to health care's share of gross domestic product in the United States since 1965? How does this compare to what has happened to out-of-pocket spending on health care as a percentage of all spending on health care?

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

Of the following high-income countries, which has the highest obesity rate?

In markets with asymmetric information,

Growth in labor productivity in health care has been ________ labor productivity in the economy as a whole.

Briefly describe the types of health care systems in Canada, Japan, and the United Kingdom.

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. Source: Jeffrey Pfeffer, "The Reason Health Care Is So Expensive: Insurance Companies," Bloomberg Businessweek, April 10, 2013. -Refer to the Article Summary. Even if insurance companies were more efficient and brought administrative costs down, consumers would ________ the full cost of medical treatment. This would result in the market equilibrium price and quantity of medical services being ________ than the efficient equilibrium price and quantity.

Which of the following has not contributed to the overall decline in death rates in the United States since 1981?