HE+ANS+to+HW1+-+Spring+2010 - Department of Economics...

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Department of Economics Prof. Derek DeLia Health Economics 220:316:01 Spring 2010 ANSWERS TO HOMEWORK #1 QUESTION 1 : 1. Increasing wealth – Growing wealth in the U.S. has made it easier to meet material needs and wants. This leaves more wealth left over for health improvement for which there is no limit. People will always want to live longer, feel better, and gain information to rule out the possibility that they will develop a serious illness. 2. 3 rd party insurance coverage – 3 rd party insurance makes consumers less sensitive to the cost of services. This allows healthcare providers to deliver more services at higher prices without fear that their patients will go somewhere else. 3. Medical advances/technologies – Healthcare today is much more advanced and resource-intensive than it was decades earlier. 4. Complex chronic illness – A growing number of individuals are living with chronic illnesses (e.g., diabetes, asthma) that will never be cured but can be medically managed with a lifetime of periodic medical treatment. 5. Expanding definition of health/healthcare – Today healthcare encompasses a wide variety of ailments including mental and sexual health that were not considered part of mainstream medicine decades earlier. QUESTION 2 : The most important factor identified was the growing use of advanced medical technology during the period. Technology is labeled a “residual” factor because it represents what is left over after more tangible and easily measured factors are accounted for. QUESTION 3 : a. The Dartmouth Altas project divides the U.S. into 306 regions, which represent local healthcare markets. Within each region, Dartmouth Atlas researchers measure and compare healthcare utilization, costs, and health outcomes. b. The Dartmouth Atlas project finds that regions with more spending per capita do not experience better health outcomes. By many measures (including mortality, use of recommended protocols, and patient and physician satisfaction), high spending regions have worse outcomes. QUESTION 4
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This note was uploaded on 05/05/2010 for the course ECON 316 taught by Professor Delia during the Spring '10 term at Rutgers.

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HE+ANS+to+HW1+-+Spring+2010 - Department of Economics...

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