Question 1

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

Accepted Answer

Approximately two-thirds of research on new medicines is conducted in the United States, reflecting the country's significant investment and infrastructure in pharmaceutical research and development.

Question 2

Economists who support market-based reforms for health care believe that increased competition among providers of health care would

Accepted Answer

Market-based reforms for health care would increase competition among providers, which would lead to lower costs for health care services and increased economic efficiency. This is because providers would have an incentive to offer high-quality services at lower prices in order to attract more customers. Additionally, increased competition would also drive innovation, which would further improve the efficiency of the health care system.

Question 3

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 4

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

Accepted Answer

"Cost disease" refers to the phenomenon where costs in certain industries, particularly those that rely on human labor and have low productivity, increase over time even as productivity improves in other sectors of the economy. This is because the wages of workers in those industries rise in line with productivity improvements in other sectors, even though the productivity gains may not be replicable in those industries. It is the opposite of what is stated in the question.

Question 5

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 offer such plans and for employees to enroll in them. This, in turn, would lead to a reduction in spending by the enrollees of these plans. The estimate by economists John Cogan, Glenn Hubbard, and Daniel Kessler is that this reduction would be around 33%.

Question 6

The Congressional Budget Office estimates that the additional taxes and fees enacted under the ACA will not even cover half of the true cost of the ACA.

Accepted Answer

There is no definitive answer to the true cost of the ACA, as it depends on various factors such as the number of people who enroll in the program and how effective it is in controlling healthcare costs. While the additional taxes and fees in the ACA do provide some funding for the program, they are not intended to cover all of its costs. The Congressional Budget Office has estimated that the ACA will be funded through a combination of taxes, fees, and savings from other parts of the healthcare system, but it is unclear whether this funding will be enough to cover all of the program's expenses.

Question 7

Those who favor changes in the market for health care that would make it more like the markets for other goods and services favor what are generally known as market-based reforms.

Accepted Answer

Market-based reforms aim to introduce more competition and consumer choice into the health care market, making it more like other markets for goods and services. These reforms often involve measures such as allowing insurers to compete across state lines, giving consumers more information about the cost and quality of health care providers, and encouraging the use of health savings accounts.

Question 8

Article Summary
Administrative overhead costs resulting from insurance companies handling reimbursement claims is in large part the reason that health care in the United States is much more expensive than in other countries. An analysis on the administration costs of health care in the United States found that roughly 30 percent of the costs of health care are administrative and that more than 25 percent of health-sector employees work in administration. Health insurance companies are often paid a fixed percentage of the claims they administer, which gives them little to no impetus to increase efficiency and keep costs down.
Source: Jeffrey Pfeffer, "The Reason Health Care Is So Expensive: Insurance Companies," Bloomberg Businessweek, April 10, 2013.

-Refer to the Article Summary.Even if 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 Article Summary
Administrative overhead costs resulting from insurance...

Question 9

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 create a more competitive market in the health care industry. This could include measures such as expanding health savings accounts, increasing transparency in medical pricing, and allowing patients to shop around for medical services. By giving patients greater control over their health care spending, market-based reforms encourage them to become more informed consumers, which in turn could lead to decreased costs of medical services.

Question 10

In most circumstances,employees pay taxes on the value of health insurance their employers provide them.

Accepted Answer

In the United States, the value of health insurance provided by employers is generally not considered taxable income for employees, meaning employees do not pay taxes on this benefit.

Question 11

Under the Patient Protection and Affordable Care Act (ACA),individuals who do not have health insurance will be subject to a fine.

Accepted Answer

The ACA includes an individual mandate requiring most people to have health insurance, and those who do not may be subject to a penalty (which is technically a tax). However, there are certain exemptions and penalties have been reduced to $0 starting in 2019.

Question 12

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 or else pay a penalty, with some exemptions for certain individuals in certain circumstances.

Question 13

In the United States,health care spending as a percentage of GDP has declined since 1965.

Accepted Answer

Health care spending as a percentage of GDP has actually increased since 1965, from 5% in 1965 to over 17% in 2019.

Question 14

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 decrease.

Accepted Answer

If consumers paid the full price of medical services, they would likely be more selective in the services they use and may opt for less costly treatments or preventive measures. This would decrease the overall quantity of medical services provided.

Question 15

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 16

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

While employers would no longer have to directly pay for their employees' health care through insurance plans, the savings they would experience would likely be offset by the need to increase overall compensation in order to remain competitive in the job market. Therefore, the amount employers would have to pay in overall compensation would remain essentially unchanged.

Question 17

Under the Patient Protection and Affordable Care Act (ACA),every company with more than 200 employees must offer health insurance to its employees and must automatically enroll them in the plan.

Accepted Answer

Under the ACA, employers with more than 200 full-time employees are required to automatically enroll new full-time employees in one of the employer’s health benefits plans, subject to any waiting period authorized by law, and to continue the enrollment of current employees.

Question 18

The Patient Protection and Affordable Care Act (ACA)is scheduled ________,at which point more than 30 million additional individuals are expected to have health care coverage.

Accepted Answer

The ACA is scheduled to be fully implemented by 2019, with the expectation of providing health care coverage to more than 30 million additional individuals.

Question 19

Some economists and policymakers who are in favor of government-provided health care believe that providing health care will

Accepted Answer

Providing government-provided health care can reduce asymmetric information by allowing the government to gather data on the health care market and make informed decisions about regulations and policies. This can lead to more efficient and effective provision of healthcare. Moral hazard, negative externalities, and adverse selection can still exist in government-provided health care, but they are not direct consequences of providing such care.

Question 20

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

Accepted Answer

Two-thirds of pharmaceutical patents are issued to U.S. firms.

Quiz 5: The Economics of Health Care