EBK HEALTH ECONOMICS AND POLICY
7th Edition
ISBN: 9781337668279
Author: Henderson
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 5QAP
a)
To determine
The validity of the five distortions in relation to the market of health care.
b)
To determine
The applicability of the five distortions to markets in general.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
discuss the dominant cost components of health care.
According to Henderson, what are the three alternatives strategies (U.S. Policy Alternatives) routinely complete for acceptance in planning the way health care should be delivered and financed in the United States? Please briefly discuss each of these policy alternatives.
Suppose you are collecting data from a country like Japan where the government sets the price of healthcare. Each prefecture in Japan has a different set of prices (for example, Tokyo has higher prices than rural Hokkaido). Data for 1999 are displayed in the table below.
Region
Outpatient Visits per Month
Price per Visit
Tokyo
1.25
25
Hokkaido
1.75
15
(4 points) What is the arc price elasticity of demand for health care consumers in
Japan (using only these data)?
(4 points) Suppose that incomes are generally much higher in Tokyo than Hokkaido.
Is your answer to the last question an overestimate or underestimate of
price elasticity? Justify your answer.
(c) (4 points) Using your estimated elasticity, what would the demand for health care
be if the price in Tokyo were raised to 30 per visit? What would the
demand in Hokkaido be if the price were lowered to 5 per visit?
Chapter 1 Solutions
EBK HEALTH ECONOMICS AND POLICY
Knowledge Booster
Similar questions
- According to Finkelstein et al. (2003), approximately what portion of national medical spending is directed toward the treatment of conditions attributed to obesity? A. One-eighth B. One-sixth C. One-quarter D. One-third E. One-halfarrow_forwardSuppose that there are two countries, Beta and Gamma. Suppose further that everyone in country Beta is on Insurance B and everyone in country Gamma is on Insurance G. Suppose further that both governments use government-set price controls. In 2005, country Beta decided to change the reimbursement rate for pharmaceuticals, but country Gamma did not make this change. You, a researcher, want to study the effect of offering coverage for this drug had an impact on health expenditures. You have average health expenditures for State Beta and Gamma prior to 2005 and post-2005. Using the information in the table below, a quick difference-in-difference calculation suggests covering this drug ____ health expenditures by approximately ____. State Time Periods Pre-2005 Post-2005 State Beta $1000 $1400 State Gamma $1500 $1700 a. decreased; $400 b. increased; $200 c. increased; $400 d. decreased; $200arrow_forwardSuppose that there are two countries, Beta and Gamma. Suppose further that everyone in country Beta is on Insurance B and everyone in country Gamma is on Insurance G. Suppose further that both governments use government-set price controls. In 2005, country Beta decided to change the reimbursement rate for pharmaceuticals, but country Gamma did not make this change. You, a researcher, want to study the effect of offering coverage for this drug had an impact on health expenditures. You have average health expenditures for State Beta and Gamma prior to 2005 and post-2005. Using your finding from the question above, you can infer that country Beta likely _____ reimbursement rates for pharmaceutical drugs. State Time Periods Pre-2005 Post-2005 State Beta $1000 $1400 State Gamma $1500 $1700 a. lower b. did not change c. raisedarrow_forward
- While it may seem intuitively obvious that health expenditures will increase as a population ages – older people after all are less healthy on average than younger people in fact, several prominent health economists have argued that it is not aging per se, but rather some of the correlates of an aging population that cause health expenditures to rise as a population ages. For instance, Getzen (1992) argues that, at least in part, rising health expenditures with an aging population are due to the higher incomes and resources of the older population; health care is a normal good, so higher incomes lead to higher expenditures. In a similar manner, Zweifel et al. (1999) argue that the real problem with an aging population, at least as far as health care costs are concerned, is that there will be more people who are within a couple of years of dying. Since health care expenditures rise sharply close to the end of life, it is this, rather than population aging by itself, that leads to higher…arrow_forwardThe 2010 health reform law fails to provide universal health insurance coverage. T or F?arrow_forwardBriefly discuss the demand and supply factors that contribute to rising health costs. Specify how (a) asymmetric information, (b) fee-for-service payments, (c) defensive medicine, and (d) medical ethics might cause health care costs to risarrow_forward
- Does perfect competition provide an advantage or disadvantage to the consumer and to the health care provider/organization? Provide an example of perfect competition within health care.arrow_forwardExplain how each of these situations will affect the quantity demanded of health insurance: d) New technologies that enable medical illness to be predicted more accurately. e) A tendency among buyers to become less risk, on average.arrow_forwardBased on the Dartmouth Atlas which tracks Medicare spending across the United States Regardless of where patients live, they receive the same care for similar diagnosis Patients with the same diagnosis receive different care depending on where they live Dartmouth Atlas is not about medical care None of the abovearrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc