Explain the rapid growth of medical spending

Assignment Help Other Subject

Reference no: EM131834606

Question: Currently, the U.S. government offers "food stamps" to poor Americans. These "stamps" are pieces of paper that look like Monopoly money and can be spent just like money at many grocery stores. The government has a complex formula that determines how much each poor person gets each month in food stamps (or more often these days, government-provided debit cards). Let's suppose that instead, the government decides to pay 95% of every poor person's food bill, as long as it is purchased at a typical grocery store: The poor person would make a "copayment" of 5% of the total bill, and the federal government would reimburse the grocery store for the remaining 95%. Just to keep things simple, let's assume that the government has a good way to make sure that poor people can't resell this food to others.

a. Which method would probably lead to more spending on food: the current method or the 5% copayment method? Why?

b. If food companies like Kellogg's and Quaker Oats start inventing new, more delicious dishes at a rapid rate, under which method will the federal government's food spending grow fastest: the current method or the 5% copayment method?

c. Which method is more like how most people pay for health care including the elderly and the poor under the federal government's Medicare and Medicaid programs: the current method or the 5% copayment method?

d. Recall that health care is a field of rapid innovation. How can your answer to parts b and c explain the rapid growth of medical spending?

Reference no: EM131834606

Questions Cloud

What fraction of gdp would go toward paying interest on debt : If the debt-to-GDP ratio rose to 100% and the interest rate on the debt were 5% per year, what fraction of GDP would go toward paying interest on the debt? b.

Find the companion-form and modal-form equivalent : Find an equivalent state equation of the equation in Problem 4.4 so that all state variables have their largest magnitudes roughly equal to the largest

What is the bonds expected return : A C-rated bond is selling at par on 18 July 2007. The bond's maturity is 17 July 2017, it has a coupon of 11% and it has a recovery percentage of 67%.

Explain the main pathogens in processed meats : Explain the main pathogens in processed meats. The three main bacterial pathogens in seafood and nematode contamination.

Explain the rapid growth of medical spending : Recall that health care is a field of rapid innovation. How can your answer to parts b and c explain the rapid growth of medical spending?

Build financial projections and a valuation model for cisco : Build financial projections and a valuation model for Cisco Systems, a publicly-traded supplier of networking solutions

Analyze the macroeconomic andfinancial market conditions : Predict three-yearfinancial performance for your chosen firm Evaluate the assumptions and scenarios used in thefinancialprojections

Show that the companion-form matrix : Show that the companion-form matrix in Problem 3.14 is nonsingular if and only if a ? 0 Under this assumption, show that its inverse equals

What is so special about pseudomonas : Write a one to two page summary of the following learning objectives: What is so special about Pseudomonas?

User Account

All Pages