Health Economics
14th Edition
ISBN: 9781137029966
Author: Jay Bhattacharya
Publisher: SPRINGER NATURE CUSTOMER SERVICE
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Question
Chapter 2, Problem 1E
To determine
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Expert Solution & Answer
Explanation of Solution
Deriving the
Economics Concept Introduction
Demand curve: Demand curve is a graphical representation of the total value of goods and services that are demanded at a particular price in a given period of time.
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Students have asked these similar questions
Indicate whether each statement is true or false, and justify your answer.The goal of health policy is to maximize health, wealth, and equity.
Inability of one to determine marginal value of health care implies that the traditional approach to demand theory does not work very well for health-care services.
True or false?
Indicate whether the statement is true or false, and justify your answer.Compared with doctors who are paid on a fee-for-service basis by health insurers, doctors who are paid on a capitated (per-patient) basis have incentives to provide too much care.
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- Suppose consumers consume and gain utility from two types of goods and services – (1) health care and (2) all other goods & services. Using this information, derive the demand curve for health care.arrow_forwardIndicate whether each statement is true or false, and justify your answer.If Medicare patients in Boston are paying more per capita for a hip replacement than Medicare patients in Boise for the same procedure, but health outcomes are exactly equal, then this is evidence that Boston is wasteful in their health spending.arrow_forwardWhat is the difference, if any, between “Pharmacoeconomics” and “Health Economics”? Explain how microeconomics and macroeconomics are relevant to this field of study and support your answer with plausible examples. Based on your answer, illustrate why studying Pharmacoeconomics has become inevitable and remarkably essential in healthcare provision nowadays.arrow_forward
- Indicate whether the statement is true, false, or unclear, and justify your answer.When the price elasticity of demand for health care is zero, health insurance coverage induces no moral hazard.arrow_forwardSuppose 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?arrow_forwardIndicate whether the statement is true or false, and justify your answer.Results from the Oregon Medicaid Experiment suggest that having health insurance has a positive impact on health status.arrow_forward
- Provide at least five determinants of health at an economic perspective and provide a brief explanation of each determinant.arrow_forwardIndicate whether the statement is true or false, and justify your answer.Disproportionate spending on end-of-life care is never clinically justifiable.arrow_forwardInsurance coverage has been shown to diminish the importance of time in the decision about how much medical care to seek and which providers to use. True OR Falsearrow_forward
- Demand studies in health care have provided estimates of both income and price elasticity. Estimates of income elasticity are usually above +1.0. Estimates of price elasticity typically range between -0.1 and -.75 (with hospital services at the lower end and elective services at the upper end). What information do these estimates convey? What does the price elasticity of demand estimates imply for government policymakers, insurance companies, and medical providers' decisions? What does the income elasticity of demand estimates imply for government policymakers, insurance companies, and medical providers' decisions?arrow_forwardSuppose you have two persons, one with more elastic demand for medical care than the other. If they both obtain identical health insurance coverage (or both have their % of costs paid by insurance increased), whose demand will be affected most? Given what you know about relative demand for MC for well vs. ill individuals, more educated vs. less educated persons, and wealthy vs. less wealthy individuals, which of each pair will have the greatest increase in demand under health insurance?arrow_forwardThe figure shows estimated medical costs versus what a user actually pays for three health insurance plans with different deductibles. For which plan does the user pay the least for estimated medical costs of $4,000? **SEE DIAGRAM** $500 deductible plan $1,000 deductible plan $2,000 deductible plan The user pays the same for all three plans.arrow_forward
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