Please answer the following on hospitals in the marketplace. a. Do for-profit or non-profit hospitals grow more rapidly in places with rapidly growing demand for healthcare such as Florida, California, and Texas? What explains this observation? b. Suppose that in a market we see an increase in competition as new hospitals enter the market. Under the "Old Style" of insurance payments, what would happen to the costs of the hospital? What about under the "New Style" of insurance payments? Please explain being sure to discuss the meaning of "Old Style" and "New Style" in your answer.

Please answer the following on hospitals in the marketplace. a. Do for-profit or non-profit hospitals grow more rapidly in places with rapidly growing demand for healthcare such as Florida, California, and Texas? What explains this observation? b. Suppose that in a market we see an increase in competition as new hospitals enter the market. Under the "Old Style" of insurance payments, what would happen to the costs of the hospital? What about under the "New Style" of insurance payments? Please explain being sure to discuss the meaning of "Old Style" and "New Style" in your answer.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 4PA

See similar textbooks

Similar questions

It is generally agreed that unrestricted price competition among insurers could be detrimental to the public, yet some people argue that antirebating laws represent an unnecessary restriction on price competition among insurance agents and that such laws should be repealed. What is your opinion?
3. Medical arms race. Consider a two-hospital town with hospitals, unimaginatively named A and B. The hospitals are considering installing a new imaging machine to attract more patients. The population of the town is small enough that it really only needs one of these machines. Purchasing a machine costs $1,000. • If both hospitals install a machine, each earns $800 in revenue. • If only one hospital installs a machine, that hospital earns $1,800 in revenue. The other hospital loses $300 in revenue as patients switch to the other hospital.• If neither hospital installs a machine, then revenue does not change for either one. a. Consider hospital A’s decision to buy one of these fancy new machines. A’s proﬁts will depend on what B decides to do. Suppose hospital B buys a machine. How much will A earn if it also decides to buy a machine? How much will A earn if it does not? What should A do if B buys a machine? b. Suppose hospitals A and B shared an owner, who maximized joint profits…
Some economists have suggested that the best way to control medical costs is to remove the profit incentive for health care providers, particularly hospitals. This would involve making all hospitals not-for-profit institutions. Use the utility maximization model to explain the likely impact such a policy would have on the cost of producing hospital services. What would happen if instead a policy was instituted that reduced barriers to entry in the hospital sector and therefore made the market more competitive?
Suppose the demand for anxiety medication prescriptions is given by P = 300 – Q. Suppose the marginal cost for a prescription of anxiety medicine is constant at $100 per prescription. a. What is the quantity demanded in the absence of any insurance coverage for anxiety medication? b. Now, suppose there is full insurance coverage for anxiety medication (i.e. no cost-sharing at all). What is the new quantity demanded? c. Finally, suppose insurance covers anxiety medication, but there is 20% coinsurance, meaning that individuals must pay 20% of the cost of anxiety medication out of pocket. What is the new quantity demanded? d. Under the insurance structure given in part (c), what is the deadweight loss associated with the presence of insurance coverage?
Imperfect competition and moral hazard. Some economists have argued that moral hazard and monopolistic health care markets are two socially inefficient problems that partially cancel each other out. Relative to the optimal level of health care Q∗, how much health care is provided in the presence of moral hazard? Assume perfectly competitive health care markets. Relative to the optimal level of health care Q∗, how much health care is provided in the presence of monopolistic health care markets? Assume no moral hazard. Write a one-sentence defense of the argument that moral hazard and imperfectly competitive health care markets could combine to provide a good level of health care provision Q.
Suppose the own price elasticity of market demand for retail gasoline is -0.9, the Rothschild index is 0.6, and atypical gasoline retailer enjoys sales of $1, 200, 000annually. What is the price elasticity of demand for arepresentative gasoline retailer's product? Instruction:Enter your response rounded to two decimal places. Ifentering a negative number, be sure to use thenegative (-) sign.
Suppose there are two types of people, high risk (H) and low risk (L) with utility function U(c) = c0.5 Each has income (=consumption) of $100. The high risk people are 10% of the population and have a 75% chance of getting cancer in which case their income would be zero. The low risk people are the remainder of the population and have a 25% chance of getting cancer and hence zero income. The private insurance industry is perfectly competitive. (a) Suppose private insurers are able to distinguish the two types. What market price would emerge for each risk type? How much insurance would each type purchase?
The Red Cross is virtually the only operator of blood banks in the United States. In Figure 10-1 are the demand and cost curves facing the Red Cross blood bank. If the Red Cross were to set price and quantity at the level that it would obtain in the long run in a competitive industry, how much blood would it sell?a. OAb. OBc. ODd. OC
You are researching the options for pricing the courses. Your goal is to achieve maximum revenue to establish funding to maintain and update the system to reflect annual policy changes in licensing requirements. A) At what individual price would revenue be maximized for the Certification in Online Counseling? Explain/support your answer based on the calculations in the table. B) At what individual price would revenue be maximized for the Certification as a Group Home Counselor? Explain/support your conclusion based on the calculations in table. C) What is the maximum revenue for an individual pricing policy? D) If you employed pure bundling what would be the maximum total revenue? Explain/support your conclusion based on the calculations in the table.
4. Hospital versus hospital. Because of the piecemeal structure that theNHS inherited it has tended to provide healthcare in an inefficient way. Hospitals and other facilities are not only old and in need of repair, but in many cases small, separated geographically, and duplicating facilities. Division of labour is often non optimal.In Birmingham, for example, there is an accident and emergency unit at Selly Oak Hospital, whereas the brain and heart specialists who might need to perform urgent operations on those involved in car crashes or suffering heart attacks are at the neighboring Queen Elizabeth Hospital. Thus the issue often arises whether it is preferable to concentrate facilities and staff by building a new and larger hospital to replace a number of older facilities. Q. Illustratethe hospital-versus-hospital trade-off using an isoquant/isocost graph and explaining the economic principles involved in obtaining an optimal situation. In what important respects does this issue…
Suppose both a monopolist and a perfectly competitive firm are producing in theirrespective markets at a point where marginal cost is $8 and marginal revenue is $10. Whatshould the profit-maximizing firms do? Group of answer choices Both the monopolist and the perfectly competitive firm should increase output until MC= MR. The monopolist should keep producing at this level but the perfectly competitive firmshould decrease output until MC = MR. The monopolist should increase output but the perfectly competitive firm should shutdown. Both the monopolist and the perfectly competitive firm should decrease output until MC= MR.
Using the appropriate graphs and terminology, explain why a city with 30,000 people is likely to have one hospital but 70 housecleaning service companies.