Healthcare system as third-party payer system

Assignment Help Business Economics

Reference no: EM131169607

In the text we discuss the U.S. healthcare system as a "third-party payer" system: When you receive healthcare in the U.S. generally you are not paying for it; you are paying for insurance, and your insurance pays for the healthcare. Hence, the payment is being made by a third party, your insurance company. The result is: People purchase more "healthcare" than they would if they were paying for it themselves.

Your discussion question is this: What I just described could also apply to auto insurance! Most people have car insurance, and when they get in an accident it's the insurance company paying to repair their car; the money is not coming out of the driver's pocket (any more than the money for medicine is coming out of the patient's pocket). But in the market for auto repairs we do not see a situation where people "purchase" more repairs than they would if they had to pay for it themselves! Why not? Auto insurance is also a third-party payer system. What's different about car insurance?

Reference no: EM131169607

Questions Cloud

Rule based policy pro-cyclical or countercyclical : Below draw an AD/AS graph and a money market graph side-by-side. For the money market, use an upward sloping money supply curve and assume that the equilibrium interest rate in the money market is 5%. Then explain and show what happens if the Fed act..

European countries experience an economic expansion : All European countries experience an economic expansion, raising incomes in each of the European countries. The government decides to decrease the amount it spends on the military.

Is the economy facing an inflationary-recessionary gap : Is the economy facing an inflationary or a recessionary gap? What fiscal policy can the government implement that might bring the economy back to long run macroeconomic equilibrium? Illustrate with a diagram and explain how the interest rate, real GD..

To measure the price elasticity of demand : To measure the price elasticity of demand, economists calculate: How much price changes relative the change in the quantity demanded. The absolute value of the percentage change in quantity demanded relative to the absolute value of the percentage ch..

Healthcare system as third-party payer system : In the text we discuss the U.S. healthcare system as a "third-party payer" system: When you receive healthcare in the U.S. generally you are not paying for it; you are paying for insurance, and your insurance pays for the healthcare.

What will the real GDP equal to in ten year : Suppose that U.S. real GDP is expected to grow by 2.5 percent per year. (a). if real GDP is currently $7 trillion, what will the real GDP equal to in ten year?( b) 2.5 percent of $7 trillion is $0.175 trillion. if real GDP grows by $0.175 trillion pe..

Explain economic fluctuations : Explain economic fluctuations and how shifts in either aggregate demand or aggregate supply can cause booms and recessions using the model of aggregate demand and aggregate supply.

What is the money supply : The initial money supply is $10,000. If the reserve requirement is 100% and people hold $1000 in currency and $9000 in demand deposits, what is the money supply? what is the money supply? What would the money supply be if banks held only the required..

What is the largest possible money supply : The Gorgonzolan central bank puts 5,000,000 guilders into circulation and each of the commercial banks holds 20% of deposits. Assume the public holds no currency. Initially all of the money is deposited into First National Bank. Show the T-account fo..

User Account

All Pages