Question

1. Historically, the highest paid physicians have been:
   1. salaried primary care physicians.
   2. solo practitioners who can claim the entire income of the practice.
   3. those paid by capitation.
   4. primary care physicians paid fee-for-service.
   5. procedure-oriented specialists paid fee-for-service.

2. The principal reason that externalities are important in our study of health and health care is that:
   1. their existence may cause private markets to fail to allocate resources efficiently.
   2. they represent the importance of health care as a right.
   3. they are a major source of economies of scale.
   4. we frequently forget to include costs external to the hospital, such as transportation, when we discuss the cost of care.
   5. health is the only setting in which externalities are important.

3. Medicare is defined as an entitlement program because:
   1. the persons who are eligible to receive benefits are defined by the President.
   2. it receives a specific budget allocation that can be used only for the purposes of the program.
   3. eligibility for the program is defined by income or other “means test.”
   4. it responds to the existence of externalities in health care consumption.
   5. participation is open to all who are over age 65 (or meet other special criteria) and they receive specified benefits regardless of the budgetary impact on government.

Answer 1

ans 1= option E.

In spite of the increasing popularity amongst health plans of pay-for-performance arrangements designed to enhance quality & raise operating efficacies, the bulk of maximum doctors’ pay is still based upon fee-for-service contracts. Primary care medics operating in areas where physician shingles are a usual scene are earning less — usually much less — than specialists. Specialists are realizing more strength in numbers.

ans 2=a

Herd immunity is an externality of medicare. So might be enhanced educational accomplishment & work force participation linked with sound health. Both can lessen demands on public schemes & keep up economic growth which helps society in manners not captured by the participants in medicare dealings. Thus, the market might under-supply health care

ans 3=c

eligibility for the arrangement is defined by level of income of the participant