Article Summary
Administrative overhead costs resulting from insurance companies handling reimbursement claims is in large part the reason that health care in the United States is much more expensive than in other countries. An analysis on the administration costs of health care in the United States found that roughly 30 percent of the costs of health care are administrative and that more than 25 percent of health-sector employees work in administration. Health insurance companies are often paid a fixed percentage of the claims they administer, which gives them little to no impetus to increase efficiency and keep costs down.
Source: Jeffrey Pfeffer, “The Reason Health Care Is So Expensive: Insurance Companies,” Bloomberg Businessweek, April 10, 2013.
44) Refer to the Article Summary. Even if insurance companies were more efficient and brought administrative costs down, consumers would still pay less than the full cost of medical treatment. This would result in the market equilibrium price of medical services being ________ than the efficient equilibrium price, and the market equilibrium quantity of medical services being ________ than the efficient equilibrium quantity.
A) greater; greater
B) greater; less
C) less; greater
D) less; less
45) Basic supply and demand analysis indicates that having firms rather than the government provide health insurance to workers
A) changes both the composition of the compensation that firms pay and its level.
B) changes the composition of the compensation that firms pay, but does not change its level.
C) does not change the composition of the compensation that firms pay, but does change its level.
D) changes neither the composition of the compensation that firms pay nor its level.
46) In 2012, employees covered by company-provided health insurance paid ________ percent of the cost of their own health insurance.
A) 3
B) 18
C) 37
D) 65
47) In 2013, health care’s share of gross domestic product in the United States was about
A) 6.5 percent.
B) 17.3 percent.
C) 45 percent.
D) 62.5 percent.
48) In the United States, out-of-pocket spending on health care per person
A) has been rising since 1965.
B) has been falling since 1965.
C) has remained fairly steady since 1965.
D) fell from 1965 through 1995, then began to rise from 1995 to the present.
49) Compared to the United States, health care spending per person in other high-income countries has been
A) growing at a slower rate.
B) growing at a faster rate.
C) growing at approximately the same rate.
D) declining at approximately the same rate.
50) By the year 2013, health care spending on Medicare, Medicaid, and other U.S. government programs as a percentage of GDP had reached a level of
A) 2.2 percent.
B) 6 percent.
C) 17.5 percent.
D) 21.5 percent.
51) In 1960, out-of-pocket spending on health care in the United States was
A) 2.2 percent.
B) 6 percent.
C) 48 percent.
D) 64 percent.
52) Federal and state governments in the United States pay for ________ of health care spending.
A) less than 10 percent
B) approximately 34 percent
C) just over half
D) more than 80 percent
53) The Congressional Budget Office estimates that ________ account(s) for less than 1 percent of health care costs in the United States.
A) the aging population
B) uninsured patients receiving treatment in hospital emergency rooms that could have been provided less expensively at doctor’s offices
C) the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance
D) advances in medical technology
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