Analytic Critique on health insurance
Order ID: 89JHGSJE83839 Style: APA/MLA/Harvard/Chicago Pages: 5-10 Instructions:
Analytic Critique on health insurance
Question Description
1. Consider the following information on Bettys demand for visits per year to her healthclinic, which is based upon the fact that her insurance does not cover clinical visits (that is, based upon a 100% coinsurance rate):
Price
Quantity
$60
5
$50
6
$40
7
$30
8
$20
9
$0
10
a. Betty has been paying $30 per visit (V). How many visits does she “consume” per year? Draw her demand curve.
b. Suppose now that her insurance company institutes a 70% coinsurance feature (that is, Betty pays 70% of the price of each visit). Show what happens to the demand curve. What is Bettys new equilibrium quantity?
c. Appraise this statement: Compared with a 70% coinsurance rate as in part (b), Bettys price elasticity of demand would be even higher if the coinsurance rate was 60%. (No calculations are needed to answer this question, so dont calculate elasticity!)
2. Appraise this statement: A price ceiling on physician fees that is below the equilibrium market price would result in a reduction in social welfare. HINT: Include the concepts of consumer surplus, producer surplus and deadweight loss in your answer.
3. A foundation is considering funding a health intervention project that has been proposed by a local hospital. The foundation will base its decision about whether or not to fund the project strictly by considering the projects financial benefits and costs. The project costs are $5 million at project inception (Year 0) plus $1 million per year in Year 1, 2, 3, 4 and 5. The present value of project benefits is estimated to be $8.5 million. At a 10% discount rate, should the foundation fund this project, or reject it? [“Year 0 means today (the projects inception), “Year 1” means one year from today “Year 2” means 2 years from today, and so on.] VERY IMPORTANT: SHOW ALL WORK (that is, the calculations and formulas that you use to obtain your answer. Do NOT simply give your final answer. Even if your ultimate answer turns out to be incorrect, by showing all of your work, then you can be given partial or even nearly full credit for your answer. On the other hand, even if you provide a correct answer but do not show your work, then you will receive a poor grade. The answer to Question 3 may be written by hand (NEATLY!), and need not be typed.
4. Suppose that Nortons income is $70,000 per year. He can spend it on healthcare visit
(V) or on all other goods (OG). The price per V is $200, and the price per OG is $50. a. Draw Nortons budget constraint (put V on the horizontal and OG on the vertical axis). Using indifference curves, show Nortons optimum if he buys 1360 OG per year.
b. Suppose that Nortons falls to $50,000 per year, and that in response he decreases his consumption of V by 2. Show the new equilibrium point on the graph. What is his income elasticity of demand for V?
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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Analytic Critique on health insurance