TRUE OR FALSE? HEALTH ECONOMICS QUESTIONS*** If inpatient and outpatient care ar
ID: 1117786 • Letter: T
Question
TRUE OR FALSE? HEALTH ECONOMICS QUESTIONS***
If inpatient and outpatient care are substitutes, then health insurance availability could reduce hospital admissions through better outpatient care T/F. Why?
Generally, hospitals competing to attract emergency room patients since this type of hospital service is the most lucrative one. T/F? Why?
A risk averse and rational individual choose full coverage if insurance is fair. T/F? Why?
The literature on the effect of competition on hospital quality indicates: competition increases quality when prices are set administratively. T/F Why?
In health insurance markets asymmetric information between agents leads to adverse selection. T/F? With an example, explain how asymmetric information in health insurance context does or does not lead to adverse selection.
Explanation / Answer
True- if inpatients and outpatients are substitutes. Health care at home and at hospital are same and one can stay at home and the treatment done with comfort of home. This reduces number of admissions in the hospitals.
False- hospitals compete by reducing prices, improving health quality. But they do not compete by attracting emergency patientss because emergency patients in emergency do not differentiate between hospitals.
False-risk averse individual does not like risk and is willing to pay to reduce risk. Hence they are willing to pay for full coverage, but a rational individual chooses the optimal level of insurance keeping in mind cost and benefits.
True- competition indicates that there are many health care providers and they compete with prices but when prices are set administratively they can compete with quality to attract patients.
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