ECON 2302 Chapter 24 Review

Which of the following best describes a DRG system?

A system in which hospitals or doctors receive a fixed payment for treatment of a Medicare patient

Which of the following are features that health insurers use to reduce the incentive to overconsume health care?

Copayments Deductibles

Which of the following are the two highly publicized problems related to the U.S. health care system?

Costs and access

What are true statements about health care spending in the United States?

It is increasing. It is high.

A criticism of the diagnosis-related group (DRG) system is that it has lowered the quality of health care for ______.

Medicare patients

How has the supply of health care services increased compared to the demand?

More slowly

What is the impact on federal, state, and local governments' budgets when there are unpredictable health care expenditures?

Negative

What are the main effects of surging health care costs on labor markets?

Outsourcing Slower wage growth Increase in the use of part-time and temporary workers

Some insurance companies require that hospitals and physicians accept discounted prices for their services as a condition for being included in the insurance plan. What are these called?

PPOs

Which of the following statements are true of the United States?

The incidence of disease has been declining. The quality of treatment has been improving.

The deductible and copayment are intended to alleviate the overuse problem by creating _______.

an opportunity cost for the consumer

Recall that the deductible and co-payment are intended to alleviate the overuse problem by

creating a direct payment and therefore an opportunity cost to the health care consumer.

Proponents of malpractice caps believe that such caps will ______.

decrease health care costs

The supply of health care services has increased more slowly than ______.

demand

Because health care is a normal good, increases in domestic income have caused increases in the ______.

demand for health care

A national health insurance system was considered politically impossible in the United States in 2010 because _______.

opinion polls indicate that a majority of Americans with employer-provided health care are happy with their coverage

While economists agree that improved health care has greatly contributed to society's GDP and well-being, many economists think that health care expenditures in the United States are inefficiently ______.

large

The health care industry employs about 20 million people, making it one of the ___________ U.S. industries in terms of size.

largest

Supporters of _______ caps say that patients should receive full compensation for economic losses but not made wealthy through huge jury awards.

malpractice

Supporters of ________ caps say that patients should receive full compensation for economic losses but not made wealthy through huge jury awards.

malpractice

A basic package of health care that is available in some countries to every citizen at no direct charge is called ______.

national health insurance

Health care spending in the United States is high and rising in both absolute terms and as percentage of domestic __________.

output

Large, uninsured medical bills are one of the major causes of ______.

personal bankruptcy

Many economists believed that the large subsidies provided by the PPACA would ______ prices and ______ consumption of health care.

raise; increase

The Patient Protection and Affordable Care Act focused on ______.

reducing incentives to overconsume health care

In countries with national health insurance, private health insurance is bought by ______.

relative few people

Which portion of all health care expenses are paid through public or private insurance?

3/4

What percentage of Americans with employer-provided health insurance rated their coverage as good or very good?

75%

What percentage of the population had no health insurance for the entire year?

9%

True or false: Average life expectancy in the United States has decreased since 1970.

False

True or false: Every American has health insurance.

False

True or false: Public and private insurance together pay for one-quarter of all health care costs.

False

Which are provisions of the PPACA in regard to preexisting conditions, caps, and dropping coverage?

-An insurance company is prohibited from imposing annual or lifetime expenditure caps. -An insurance company cannot deny coverage to anyone on the basis of a preexisting medical condition. -An insurance company is allowed to drop a policyholder only in the case of policyholder fraud.

The objections over the PPACA include ______.

-greater inefficiencies in health care due to federal control of pricing and content of insurance policies -the notion of a national health insurance system -concerns whether the PPACA would reduce the growth rate of health care expenditures

Health care is one of the largest U.S. industries, employing about how many people?

20 million

A means of protection against the huge monetary losses that can result from hazards is called what?

An insurance program

How do governments respond to rising, unpredictable health care expenditures?

By raising taxes By reducing spending in other categories

Which of the following explains the reason for the rapid rise in health care costs in terms of demand and supply?

Demand for health care has increased much more rapidly than supply.

Which of the following reduce access to health care?

Greater insurance premiums Higher health care costs

What are tax-free savings accounts into which people with high-deductible health insurance plans can place funds each year called?

HSAs

Which of the following are the most visible economic effects of rising health care costs?

Higher out-of-pocket costs to workers Higher premiums to employers

PPOs do which of the following?

Reduce health insurance premiums Reduce health care expenditures

Higher health insurance premiums to employers and higher out-of-pocket costs to workers are visible economic effects of what?

Rising health care costs

Slower wage growth, the use of part-time and temporary workers, and outsourcing are the effects of what?

Rising health care costs

What are true statements about large medical bills?

They are one of the major causes of personal bankruptcy. They are often the last bills to be paid.

True or false: Many provisions of the Patient Protection and Affordable Care Act have been focused on reducing the incentives to overconsume health care.

True

According to the PPACA, when are health insurance providers allowed to drop policyholders?

When the policyholder commits fraud.

Higher costs and insurance premiums reduce access to ______.

health care

Because health care is a normal good, growth in domestic incomes have caused the demand for health care to _______.

increase

Rising prices, quantities, and costs of health care services are the result of the demand for health care ______ than the supply.

increasing more rapidly

While many economists agree that improved health care has greatly contributed to society's GDP and well-being, many economists think that health care expenditures in the United States are ______.

inefficient

A(n )______ program is a means of protection against the huge monetary losses that can result from hazards.

insurance

Health __________ accounts are designed to promote personal saving out of which workers can pay routine health care expenses while working and can pay for Medicare copayments and deductibles later, during retirement.

savings