To the patient,the marginal cost of medical care is zero

Question

Quizplus · Accepted Answer

Under first-dollar insurance coverage, the patient does not have to pay anything out of pocket for medical care, as the insurance covers all costs from the first dollar. Therefore, to the patient, the marginal cost of medical care is zero, leading to overuse or misuse of healthcare resources. In other healthcare payment models like HMOs and fee-for-service, the patient may have to pay some amount out of pocket, which increases the marginal cost of medical care. Hence, the patient's marginal cost is not always zero, and the correct option is B.

To the Patient,the Marginal Cost of Medical Care Is Zero