Chapter 2 2.1) Identify a product that is one organization’s output and another organization’s input 2.3) what’s wrong with spending 17.2 percent of

Chapter 2
2.1) Identify a product that is one organization’s output and another organization’s input
2.3) what’s wrong with spending 17.2 percent of GDP on healthcare?
2.4) Americans spend more on smartphones than the citizens of other countries do; yet this type of spending is seldom described as a problem. Why is spending more on healthcare different?
2.10) a new treatment of cystic fibrosis costs $2 million. The life expectancy of 1,000 patients who were randomly assigned to the new treatment increased by 3.2 years. What is the cost per life year of the new treatment?
2.12) Why has the share of healthcare output produced by hospitals fallen? Will this trend continue? Can you think of a policy or technology change that would further reduce hospital use? can you think of a policy or technology change that would increase hospital use? What implications do these changes have for the careers of healthcare managers?
Chapter 3
3.1) Why is health insurance necessary?
3.2) Explain how adverse selection and moral hazard are different, and give an example of each
3.3) “The United States is the land of the over insured, the underinsured, and the uninsured.” What do you think these concepts mean? Why might this comment be true?
3.4) Private health insurers have been slow to develop and adopt proven cost containment innovations (e.g., case rates or disease management programs). Why do you think this is the case?
3.10) Why do employers provide health insurance coverage to their employees?
3.13) Suppose that your employer offered you $4,000 in cash instead of health insurance coverage. Health insurance I excluded from state income taxes and federal income taxes. (To keep the problem simple, we will ignore Social Security and Medicare taxes). The cash would be subject to state income taxes (8 percent) and federal income taxes (28%). How much woul you after-tax income go up if you took the cash rather than the insurance?
3.14) How different would this calculation look for a worker who earned $500,000 and lived in Vermont? This worker would face a state income tax rate of 9.5% and a federal income tax rate of 35%.