Please answer the questions within the word document. Provide graphs.

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FINAL Exam, HPMM 5002 Healthcare Economics

Prof. Adam Block

PLEASE READ ALL INSTRUCTIONS CAREFULLY. Points will be deducted where instructions are not followed.

This exam is available Tuesday, Jul 27, 2021 and due no later than Thursday July 29th, 9 p.m.

It must be uploaded in the appropriate place on CANVAS. No more than two files may be uploaded, but one file is preferable. And do not forget the Short answer portion that is 30pts.

Feel free to use all materials from the course the textbook lecture notes, homeworks and solutions to homework assignments, the mid-term, etc:

While this is an open-book, open-notes exam:

1. Any words you write must be entirely your own. You cannot work with other students. You cannot quote directly from any source, including the textbook and other written material distributed by the instructors.

2. The internet can and should be used on this exam, similar to the way it was required in homework assignments. However, do not try solving the short answer problems by “Googling it”. This is a test of your knowledge and how knowledgeable you will be on these subjects in conversations with peers and colleagues.

3. By submitting this exam, you agree to abide by points 1 and 2 above.

There are three parts: Two parts on this sheet and a “quiz” for the short answer portion (30%)

I) Analytical Exercise (30 points)

II) Essay Questions (40 points)

Answers must be typewritten, except for graphs, or calculations. Calculations must be included for full credit.

Part I: Analytical Exercise: Be sure to show work to be eligible to receive partial credit.

Obamacare & Health Care Demand (30 points)

1. (5 points) Before the ACA passed, PCP visits cost $20 for those with insurance. (Assume no demand from those without insurance). Below is a table of demand.

Please draw a demand curve. What is the demanded quantity?

1. (5 points) In 2014 the ACA (Obamacare) went into effect. One of requirements was that for those with insurance, the cost of a preventive care visit should be $0. What is the change in demand for PCP visits as a result of this change?

1. (5 points) In addition, in 2014 Medicaid and the Individual markets were expanded resulting in approximately 30M more individuals with insurance. Uninsured people had 0 demand before. These newly insured individuals have the same demand as the prior individuals what is the new demand? Please graph your answer on the same graph as part i. Label this demand line D’

1. (5 points) Draw the PCP supply curve detailed in the data below.

If price was set in the market and not by law, what is the equilibrium point between this supply and D’ (the demand from part iii), the expanded demand curve?

1. (10 points) However, the price IS set in law at $0 for patients. Assume the payment to physicians is set at $100. What amount is supplied? What amount is demanded? What is the resulting market condition?

Written explanations must be focused and succinct – points will be deducted for answers that are unfocused or unnecessarily long.

1. Comparative Health Systems (20 points)

1. Briefly describe the health systems of one other country of your choosing. It may be one of the countries in the lecture or any other country. (5 points)

1. Compare the incentives in that country to incentives in the US that result in excessive medical spending (5 points)

1. Compare the method of “rationing care” to the methods in the US (5 points)

1. Compare equity in your selected country to equity in the US (5 points)

II. Value Based Insurance Design (20 points)

Please review the attached article and reference current events since the publication of the article.

“Do We Spend Too Much on Health Care?” by Katherine Baicker and Amitabh Chandra, New England Journal of Medicine. August 13, 2020.

1. How would you know if you were spending too much on health care? (6 points) (1-2 paragraphs)

1. Why is comparing to other countries a poor comparison? (7 points) Please write 1-2 paragraphs

1. Name one measure that will drive us to higher value spending on health care in the United States? (7 points) Please write 1-2 paragraphs