Question 1

Since 1960,out-of-pocket spending on health care has increased sharply as a fraction of all health care spending.

Accepted Answer

The answer of Since 1960,out-of-pocket spending on health care has...

Question 2

Those who favor changes in the market for health care that would make it more like the markets for other goods and services are generally in favor of universal health care coverage.

Accepted Answer

Those who favor changes in the market for health care that would make it more like the markets for other goods and services typically do not support universal health care coverage, as they believe that competition and consumer choice will lead to lower costs and better quality care.

Question 3

An increase in the number of medical procedures performed in doctor's offices rather than in hospital settings will tend to shift the ________ curve for medical services to the ________.

Accepted Answer

Moving medical procedures from hospitals to doctors' offices generally increases the availability and accessibility of these services, effectively increasing the supply of medical services. This is represented by a shift of the supply curve to the right.

Question 4

By 2017,spending on federal health care programs such as Medicare and Medicaid had grown to 7 percent of GDP.

Accepted Answer

According to the Centers for Medicare and Medicaid Services, spending on federal health care programs reached 7 percent of GDP in 2017.

Question 5

In most circumstances,employees do not pay taxes on the value of health insurance their employers provide them.

Accepted Answer

This is because employer-paid health insurance premiums are generally considered a tax-free fringe benefit.

Question 6

The individual mandate provision of the ACA requires

Accepted Answer

The individual mandate provision of the ACA requires every U.S. resident to have health insurance. This is aimed at increasing the number of insured individuals to promote healthy behavior, reduce the number of people with high medical bills, and ultimately lower healthcare costs for everyone.

Question 7

The rising cost of malpractice insurance is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

Accepted Answer

The answer of The rising cost of malpractice insurance is...

Question 8

An Organisation for Economic Co-operation and Development (OECD) report states that administration costs for health care in the United States are the highest in the developed world, accounting for over 8 percent of spending in the health care sector, compared to a global average of about 3 percent. According to the report, expensive surgeries, high pharmaceutical costs, and corrupt practices increased global health care costs, and poor coordination between health care providers, duplication of tasks, and excessive time spent on paperwork all contributed to higher administrative costs. The report also noted that administrative costs are generally lower under government-managed health care systems than with private insurance, but governments could still significantly cut spending and improve patients' health.
Source: Alanna Petroff, "U.S. health care admin costs are double the average," money.cnn.com, January 11 2017.
-Refer to the Article Summary.The article discusses the high administrative costs of health care in the United States.Even if private insurance companies were more efficient and brought administrative costs down,consumers would ________ the full cost of medical treatment.This would result in the market equilibrium price and quantity of medical services being ________ than the efficient equilibrium price and quantity.

Accepted Answer

The answer of An Organisation for Economic Co-operation and Development...

Question 9

The rising cost of uninsured patients receiving treatment at hospital emergency rooms is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

Accepted Answer

The answer of The rising cost of uninsured patients receiving...

Question 10

About ________ of research on new medicines is carried out in the United States.

Accepted Answer

According to the Tufts Center for the Study of Drug Development, two-thirds of research on new medicines is conducted in the United States.

Question 11

Replacing employment-based health care with a government-run system could reduce employers payments for their workers insurance,but the amount that they would have to pay in overall compensation

Accepted Answer

Replacing employment-based health care with a government-run system might shift the form of compensation (from health insurance to possibly higher wages or other benefits) but the overall compensation cost to employers would likely remain essentially unchanged. Employers would still need to offer competitive compensation packages to attract and retain employees.

Question 12

Most employees ________ on the value of health insurance provided by employers,and most people ________ when buying individual health insurance policies.

Accepted Answer

The answer of Most employees ________ on the value of...

Question 13

Economists John Cogan,Glenn Hubbard,and Daniel Kessler have estimated that ________ the tax preference for employer-provided health insurance would reduce spending by people enrolled in these programs by 33 percent.

Accepted Answer

Repealing the tax preference for employer-provided health insurance would remove the incentive for employers to provide these plans, leading to a reduction in enrollment and spending by those enrolled in them. The estimate by the economists suggests that spending would decrease by 33 percent if this tax preference were eliminated.

Question 14

"Cost disease" refers to the tendency for low productivity in the service sector to lead to higher costs in those industries.

Accepted Answer

The term "cost disease" was coined by economist William Baumol to describe the phenomenon where stagnant productivity growth in service industries like healthcare and education leads to increasing costs over time, as labor costs rise but output remains the same.

Question 15

Under the Patient Protection and Affordable Care Act (ACA),insurance companies are required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

Accepted Answer

This is true. The high-risk pool is called the Pre-existing Condition Insurance Plan (PCIP) and was established by the ACA to provide coverage for individuals with pre-existing conditions who were previously denied coverage by insurance companies. However, the PCIP is no longer accepting new enrollees as of 2014 due to the implementation of the ACA's insurance marketplaces, which also offer coverage for individuals with pre-existing conditions.

Question 16

In 2018,a tax is scheduled to be imposed on employer-provided health insurance plans known as 'Cadillac plans.'

Accepted Answer

The answer of In 2018,a tax is scheduled to be...

Question 17

About ________ of pharmaceutical patents are issued to U.S.firms.

Accepted Answer

According to the World Intellectual Property Organization, two-thirds (or approximately 67%) of all pharmaceutical patents issued globally are issued to firms based in the United States.

Question 18

A goal of ________ is to give patients an incentive to pay more attention to the prices of medical services.This would tend to increase economic efficiency by decreasing the costs of medical services

Accepted Answer

Market-based reforms of the health care system aim to increase competition among providers, which can lead to lower prices for consumers. By giving patients an incentive to pay attention to prices, such as through health savings accounts or high-deductible insurance plans, they are more likely to shop around for lower cost services, which can ultimately decrease the overall cost of care. The other options, the ACA, government-provided health care, and socialized medicine, do not necessarily prioritize incentivizing patients to pay attention to prices as a means of increasing efficiency.

Question 19

If consumers paid the full price of medical services instead of using health insurance and third-party payers to cover part of the cost,the quantity of medical services provided would increase.

Accepted Answer

This statement is counterintuitive but not necessarily true. It is possible that some consumers may choose to delay or forego certain medical services if they had to pay the full cost out of pocket. Additionally, some medical providers may raise their prices if they know that consumers are able and willing to pay the full amount without insurance coverage. Therefore, it is difficult to predict the exact effect on the quantity of medical services provided.

Question 20

Under the Patient Protection and Affordable Care Act (ACA),residents who do not have health insurance will not be allowed to seek employment.

Accepted Answer

The ACA does require most individuals to have health insurance or face penalties, but it does not prohibit them from seeking employment.

Quiz 5: The Economics of Health Care