Exam 7: The Economics of Health Care

In the United States,the bulk of health care spending is paid by health insurance companies.Such a system is also called a third-party payer system where consumers of health care pay a nominal fee and the rest are paid by the health insurance provider.Why might such a system lead to an inefficient outcome?

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

A majority of people in the United States have private health insurance.

Health insurance plans which typically reimburse doctors mainly by paying ________ are known as health maintenance organizations.

A majority of people in the United States do not have private health insurance.

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

In the United States in 2014,of those companies employing more than 200 workers that offer health care to those workers,________ of employees accept the coverage.

Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500.If you knew the car was reliable,you would be willing to pay $10,000 for it.If you knew the car was unreliable,you would only be willing to pay $5,500 for it.Under what circumstances should you buy the car?

What is asymmetric information?

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

A goal of market-based reforms of the health care system is to give patients an incentive to pay more attention to the prices of medical services.This would tend to ________ economic efficiency by ________ the costs of medical services

Which of the following is not part of the "regulation of health insurance" provision of the Patient Protection and Affordable Care Act (ACA)?

The cost of group health insurance is lower than if an individual buys a policy on his own because

Those who favor changes in the market for health care that would make it more like the markets for other goods and services are generally in favor of universal health care coverage.

In what ways do economists and policymakers who believe that the federal government should have a larger role in the health care system criticize the Patient Protection and Affordable Care Act (ACA)?

What is an externality? Explain how someone receiving a meningitis vaccination is an example of an externality in the market for health care.

What is moral hazard?

If a doctor knows that an insurance company will pay for most of a patient's bill,the doctor has more of an incentive to require additional medical procedures and tests,even if the patient may not require them.This is an example of

Figure 7-2 represents the market for vaccinations.Vaccinations are considered a benefit to society,and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. -Refer to Figure 7-2.The market equilibrium price is

Economists who support market-based reforms for health care believe that increased competition among providers of health care would