1). How would you define a risk –neutral person in the context of making decisio
ID: 1222720 • Letter: 1
Question
1). How would you define a risk –neutral person in the context of making decisions south the health insurances?
2).What is meant by a loading fee when considering the price of an insurance policy? Why is the loading fee a higher proportion of the premium when people choose low deductibles?
3) What are the advantages and disadvantages of community rating of health insurance consider both equity and efficiency.
4). what are the advantages and disadvantages of community rating of health insurance consider both equity and efficiency.
5). what are the main determinants of health disparities and how can these be modified to improve health status in society?
6) What are the pros and cons of interventions that are individually based versus population based?
7) Suppose that licensure requirements become more stringent so that fewer physicians will be able to practice medicine. What would happen to the supply curve for physician services? Explain.
8) Suppose that there is a high demand for a new diet drug on the market. What would happen to the supply of the drug?
9). suppose that you are a manager of a large healthcare system and the reimbursement fees for services rendered has changed significantly during the period. What is your short –run elasticity with respect to price and would this change over longer planning horizon? How?
Explanation / Answer
Risk neutral person is indifferent between risky and assured alternative. In health insurance there is price of insurance suppose $200. Insurance company aggrees to pay for any illness of worth $ $20,000.The change in this case for such illness is 1%.
Therefore in this case the risk neutral person is indifferent between the choose or not to choose the insurance as 1% of $20000 is $200 which is the cost of insurance.
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