Please answer the following questions in order.
1. Identify at least four things that will likely affect an individual’s demand for medical care. Which will likely have the best ability to predict spending for a single individual? Which of groups of people (assuming that you do not know anything about individual health events)?
2. Identify at least four things that will likely affect an individual’s demand for health insurance. Discuss how and why this list differs from that answer to question 1.
3. U.S. national health expenditure was $7,026 per person in 2006 and $4,790 in 2000. The Consumer Price Index had a value of 201.6 in 2006 and a value of 172.2 in 2000. Adjusted for inflation, how much was spending in 2000?
4. Why has the share of healthcare output produced by hospitals fallen? Will this trend continue? What implications does this have for the careers of healthcare managers?
5. Explain how adverse selection and moral hazard are different, and give an example of each.
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