Do Consumer cooperatives have a long and successful history in development of the HMO?

The necessary catalyst for development of social insurance programs for health care was the:

The Law of Large Numbers explains why it is unlikely that the actuarially fair premium for an insurance policy will be the same for a small start up firm as it will be for a large employer such as a university.

A U.S. emergency relief agency is considering sending a team of highly paid experts to treat a severely contagious disease outbreak to another country. The agency estimates effectiveness as follows:

Number of Team Members	Number of Deaths
0	1,000
5	350
10	200
15	30
20	30

Diminishing marginal returns sets in with:

A sudden escalation in medical costs for treatment of ischemic heart disease would immediately:

A key to establishing medical homes is effective information and care management.

In the U.S., the key determinants of population growth have been the excess of increasing birth rate and declining death rates.

For-profit firms make up the bulk of hospital organizations.

Not-for-profit hospitals differ from traditional corporations in that:

A problem with Cost-Benefit Analysis is

Health economists view all incentives as monetary in tracing the money trail in a medical decision.

Cost-benefit analysis of a childhood immunization program is straight-forward analysis because the costs of the drugs are well known and the benefits to individual children are easy to calculate.

Bill’s health insurance covers preventive and cosmetic dental services, including orthodontic care, for employees and their family members. Bill is willing to pay $30 per month for over the counter teeth whitening strips at the local pharmacy. With his co-pay, he learns he can pay $25 per month and receive professional teeth whitening services at his dentist. He chooses to go to the dentist for the service, which costs the insurance company $75 per month. This is an example of adverse selection.

Sahar’s demand curve for chiropractic visits is characterized by Q = 10 – 0.2P.  The following table shows her demand for services:

Price per Visit	Number of Visits
0	10
10	8
20	6
30	4
40	2
50	0

Sahar responds only to her out-of-pocket payment when deciding how many office visits to make.  Assume Sahar obtains insurance coverage which requires her to pay 20% of the price per visit.  At a price of $50, how many office visits will Sahar make?

Shareholders of the Allegheny General Hospital group violated the shareholder/investor agency relationship when illegal accounting practices were discovered in the late 1990s.

Economists treat the increase in health expenditures in the U.S. as solely a trade off between costs of medical interventions and gains in life expectancy and costs for those interventions.

Catastrophic medical expenses are large, infrequent and unpredictable. Risk aversion explains why people buy insurance which covers such catastrophic events.

Rising costs and declining consumer satisfaction are the keys to defining the system as broken.

When Allegheny Hospital System (AHERF) went bankrupt, the price of borrowing for all hospitals increased. This is an example of correlated system risk.

According to Dr. Getzen’s text:

Issues in agency would be least likely to arise in:

Depending on assistance from family and friends to pay for one’s unforeseen medical expenses is an example of an economic trade-off between consumption today and consumption tomorrow.

The Stone Age is characterized by equality of income, low medical expenditures and population growth rates which doubled every 10,000 years.

The U.S. is unusual in the developed world in that it uses a general tax to fund health insurance for the elderly.

One of the key contributions health economists make to any debate on medical care decisions is to force the questions which make clear the perspectives of each party involved: patient, provider, or payer.

Cost-effectiveness analysis is a limiting case of the general cost-benefit analysis.

Hospitals using working capital cash accounts to make up for the difference in timing between accounts receivable and expenses paid.

The role of the physician in the 21st century compared with her role in the early and mid 20th century will be a switch from expert and sole decision maker to that of team leader.

Sahar’s demand curve for chiropractic visits is characterized by Q = 10 – 0.2P.  The following table shows her demand for services:

Price per Visit	Number of Visits
0	10
10	8
20	6
30	4
40	2
50	0

With insurance, at the $50 office visit price, how many of the services Sahar demands are worth less than to her than what they cost?

The Agricultural Age is characterized by great income inequality and explosive population growth.

A cost effectiveness study evaluates whether or not the benefits from inserting a drug eluting coronary stent add enough years of life expectancy to justify the cost; a cost-benefit study evaluates whether a drug eluting coronary stent, a beta blocker drug or cardiac bypass surgery might provide the most additional years of life expectancy per dollar spent.

Bill’s employer offers a new health insurance benefit which covers preventive and cosmetic dental services, including orthodontic care, for employees and their family members. If Bill knows his children need extensive orthodontic care, he will buy the policy. This is an example of moral hazard.

Kaiser Health Plan is the only HMO in the U.S. to consistently maintain its core competencies. That is, it has kept client satisfaction high, while keeping the growth rate of premiums higher than the growth rate of medical costs.

Societal structure during the Agricultural Age provided localized areas which were susceptible to catastrophic losses of life from drought, pestilence and disease.

Varying measures of benefits can result because the viewpoint of the party benefitting from a treatment varies.

According to the text, medical care expenditures increased from the Agricultural Age to the Industrial Age. At the end of the Agricultural Age, almost all expenditures on health care were driven by the 2% of the population that was wealthy. Greater equality of income and wealth distribution in the Industrial Age helped support the increase in medical expenditures.

The U.S. government subsidizes the private provision of health insurance through employers. Benefits paid to employees are deductible as expenses by firms but not recognized as taxable income by employees. Consider two employees, Ann and Bob, who both receive $12,000 in insurance benefits for their family. Ann earns $30,000 and pays 15% in taxes. Bob earns $75,000 and pays 25% in taxes. The tax subsidy to Bob is:

Social insurance:

Economics is the science which studies how scarce resources are allocated among unlimited needs and wants. In health economics, allocation can be restated as distribution resources, the distribution of health, the distribution of medical care, and the distribution of provider incomes.

Offering insurance coverage through an optional rider would likely cause the most problems with adverse selection for which condition?