Bundle: ECON MICRO, 5th + Aplia, 1 term Printed Access Card
5th Edition
ISBN: 9781337192712
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 14, Problem 3.8P
To determine
The problems faced by the health insurance because of the adverse selection and moral hazard and the ways in which the insurance company tries to minimize these problems.
What are the problems faced by health insurance companies due to adverse selection and moral hazard? Discuss how they try to reduce risk.
Concept Introduction:
Asymmetric information is lack of information where one party has an advantage over the other and they use it to their economic advantage.
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8. Cost-benefit & Cost-effectiveness analysis
Given the information below, answer the questions that follow.
Effectiveness
4 life-years gained
10 life-years gained
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New Treatment
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$100,000
$250,000
A. Calculate the ICER for the new treatment, assuming that the new
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B. Calculate the cost effectiveness for both current and new treatments.
(Hint: use the ratio of costs over benefits)
Question 40
The following is/are public health insurance program offered as safety nets to insure low income populations in India: (select
all that apply)
Life Cover under Pradhan Mantri Jan Dhan Yojana or PMJDY
O Rashtriya Swastha Bhima Yojna or RSBY
Pradhan Mantri Suraksha Bima Yojana or PMSBY
O Prime Minister Jan Arogya Yojna or PM-JAY
: What economic theories are most useful when applied to the healthcare industry and why?
Chapter 14 Solutions
Bundle: ECON MICRO, 5th + Aplia, 1 term Printed Access Card
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- TABLE 4-VARIOUS MEASURES OF PREDICTED ANNUAL USE OF MEDICAL SERVICES, BY INCOME GROUP i) ii) Plan Likelihood of Any Use (Percent) 82.8 Free Family Pay 25 Percent 50 Percent 95 Percent Individual Lowest Third Mean 50 Percent 95 Percent Individual Deductible Expenses (1984 $) Free Family Pay 25 Percent 50 Percent 95 Percent Individual Deductible 71.8 64.7 61.7 10.03 9.08 8.77 9.26 Deductible 65.3 Likelihood of One or More Admissions (Percent) Free Family Pay 10.63 25 Percent 788 680 610 581 Income Middle Third Mean 87.4 609 80.1 76.2 68.9 73.9 10.14 8.44 8.06 7.38 9.44 736 588 550 494 Highest Third Mean 594 90.1 84.8 82.3 73.8 79.1 10.35 7.97 7.77 7.07 9.88 809 623 590 527 Significance Tests ton Contrast of: 670 Middle vs. Lowest Thirds 4.91 5.45 4.35 3.96 6.09 -0.91 -2.95 -1.78 -2.79 0.31 -1.78 -3.17 -1.89 -3.09 Highest vs. Lowest Thirds 5.90 6.28 4.86 4.64 7.09 -0.35 -2.75 -1.66 -2.46 -0.57 Assume average income in the bottom, middle, and top income terciles make $15,000, $50,000, and…arrow_forwardIn an insurance system, would you expect each person to receive in benefits pretty much what they pay in premiums or is it just that the average benefits paid will equal the average premiums paid?arrow_forwardWhy is it difficult to measure health outcomes?arrow_forward
- what recommendations would you make regarding the benefits plan for the next year (consider both financial and non-financial considerations. what would be at least 2 benefits that would need to be eliminated or reduced. Benefit Employee Ranking (1- highest, 10 lowest) Cost (1 - highest, 10 -lowest) Utilization Rates Comments Health Insurance 1 1 76% Dental Insurnace 3 4 72% Vision Insurance 5 5 40% Life Insurance 9 9 100% Employer paid at a base benefit Long-Term Disability 8 6 100% Employer paid at a base benefit Short-Term Disability 7 2 67% 401k 4 3 80% Paid Time Off 2 10 100% All employees are full-time, elgible Employee Assistance Program 6 7 1% Tuition Reimbursement 10 8 2%arrow_forwardPls help ASAParrow_forwardWhat do you understand by the term "Health Insurance"?2. Describe the different types of Health Insurance3. Discuss factors that would make any two mentioned types of health insurance successful.arrow_forward
- 5 (True / False / Uncertain) The Comprehensive Care Physician Model aims to improve care by reducing the need to coordinate inpatient and outpatient care. please identify it's True / False / Uncertain, and give an explanation of no more than 200 words.arrow_forward3arrow_forward8. The Canadian National Advisory Committee on Immunization (NACI) recommended against vaccinating the whole population against the smallpox virus because the vaccination has undesirable, and sometimes fatal, side effects. Suppose the accompanying table gives the data that are available about the effects of a smallpox vaccination program. Percent of population vaccinated 0% 10 20 30 40 50 60 Deaths due to smallpox 200 180 160 140 120 100 80 Deaths due to vaccination side effects 0 4 10 18 33 50 74 a. Calculate the marginal benefit (in terms of lives saved) and the marginal cost (in terms of lives lost) of each 10% increment of smallpox vaccination. Calculate the net increase in human lives for each 10% increment in population vaccinated. b. Using marginal analysis, determine the optimal percentage of the population that should be vaccinated.arrow_forward
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