Question

Which one is an example of a reduction in moral hazard?

patients who only marginally need a medical intervention stay in the queue because there is no fee

patients who only marginally need a medical intervention leave the queue once a fee was charged to stay in a queue

patients who REALLY NEED a medical intervention stay in the queue because there is no fee

patients who REALLY NEED a medical intervention leave the queue because there a fee it cannot afford

none of the above

Answer 1

Moral hazard is a situation in which one party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the cost.

If patients who only marginally need a medical intervention leave the queue once a fee was charged to stay in a queue, they are reducing moral hazard since they have already paid the fee and are insured that way, but they are only marginally ill and staying in queue incurs a cost to patients who really need medical intervention.

Correct Ans - B