The growth of third-party payments has resulted in higher prices for health-care services because
A) the lower out-of-pocket cost for consumers has increased the demand for health-care services.
B) consumers have less of an incentive to economize and shop for low-cost services when they pay a lower share of their bill.
C) producers have less of an incentive to provide health-care services at a low price when consumers are not as cost conscious.
D) All of the above are true.

Question

Quizplus · Accepted Answer

All of the above are true. The growth of third-party payments has led to an increase in demand for health-care services due to lower out-of-pocket costs for consumers. This has resulted in producers having less incentive to offer services at a low price, and consumers being less cost-conscious when choosing health-care services since they pay a lower share of their bill. Consequently, prices for health-care services have risen.

The Growth of Third-Party Payments Has Resulted in Higher Prices