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Read the following article: Hefty Pharmaceutical Company Margins Dwarf Other Industries.

http://www.citizen.org/documents/Pharma_Report.pdf

Discuss the economic implications of prescription drug coverage (including generic drugs) on health care, from an individual standpoint and from the health care system standpoint.

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Joshua Stredder
Joshua StredderLv10
28 Sep 2019

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Related questions

You have been asked to help the government officials of Sunnydale to better understand their role in local health care. Prepare a PowerPoint presentation of 10–15 slides, including detailed speaker’s notes summarizing your findings, addressing the following: Discuss the similarities and differences among monopoly, perfect competition, and oligopoly.

Explain the importance of government involvement with health care entities at the local, state, and federal levels. Examine the structure, conduct, and performance paradigm as it relates to health care. Discuss the implications of the Sherman Antitrust Act on Sunnydale Care.

Provide an overview of the structure and operation of Medicare and Medicaid.

What services do each cover?

How is coverage established?

What are the funding differences?

Discuss the benefits and challenges of government involvement at Sunnydale Care.

Question 1 to 9. Choose TRUE or FALSE. WILL RATE 5 stars for a correct answer

1.

1. Flow of Funds

Direct spending by the government on health care in 2012 was almost $ 4,500.

2.

Flow of Funds

Payments to hospitals and physicians account for about half of all health care spending in 2012.

3.

Flow of Funds

Over the past 100 years, out-of-pocket expenditures for health care services by individuals have decreased from over 75% to less than 5%.

4.

Flow of Funds

Third-party payers account for 60% of all health care expenditures in 2012

5.

Flow of Funds

The dollar amount of health care expenditures paid by charitable organizations and individuals has remained roughly constant over the past 100 years if one adjusts for inflation

 

6. Flow of Funds

Ranking everyone by the amount spent on medical care, 30 percent of the total (all expenditures for all people) is accounted for by the top 1 percent of patients. The top half of the population accounts for 90 percent of total spending. This is mostly due to cost-shifting.
 

7. Flow of Funds

Not only is the share of GDP to health care higher in 2012 than in 1929, but the wages of health care workers have also risen concerning wages of other types of workers. The Flow of Funds idea emphasizes that total dollars spent by individuals, the government, and other third-party payers for health care must equal total income earned by health care providers, administrators, and other health care workers.
 

8. Equity and Distribution

Socioeconomic differences in mortality found in the U.S. are most likely attributable to a lack of universal health insurance coverage.

 

9. Shifting Overhead

When a drug company advertises it will provide a prescription drug at no charge to certain individuals who cannot afford a doctor prescribed drug, costs are most likely being shifted away from individuals who are paying high prices to those who are paying nothing.

 

10. What is Economics?

Which of the following is not an example of the fundamental theorem of exchange?

   

A. You pay a fertility specialist $10,000 to perform an in-vitro fertilization procedure that does not result in pregnancy.
   

B. You donate your old, used eyeglasses to the Lions Club, a charitable organization that recycles and distributes the glasses to needy people.
   

C. You pay a fertility specialist $10,000 to perform in vitro fertilization procedure which results in pregnancy.
   

D. Unknown to you, your neighbor is tapping into your cable tv service and sharing your service.
   

E. You pay your optometrist $500 for a new pair of eyeglasses.

11. What is Economics?

To reduce the ache in your knees when you work out, you buy an elastic knee brace from the pharmacy section at the grocery store. This transaction differs from paying a surgeon to replace your knee joint because
   

A. you require a physician
1. With regard to health care spending patterns, we can say that
 
A. Everybody demands the same basic level of health care
B. Health care spending varies dramatically according to governments willingness to pay for such services
C. Men demand much more medical care than women
D. The elderly need much less health care than adults do
E. Only a few people (less than 5 percent) consume more than half of all health care expenditures
 
2. Which of the following is the best example of a renewable resource?
 
A. Crude petroleum
B. The ozone layer in the atmosphere
C. Library book
D. Minerals
E. Trees
 
3. All of the following are reasons for health care expenditures in the U.S. Rising EXCEPT
A. The government (FDA) restricts entry of drugs to the U.S. Marketplace
B. The demand for health care has risen
C. The federal government has had such a small role in health care
D. The supply of physicians is restricted by the American medical association
E. Health insurance is regulated on a state by state basis so someone cannot buy a less expensive policy from an insurer in another state
 
4. Free market economists argue that
 
A. Markets will not adjust to a demand shock without government intervention
B. Markets will adjust to a demand shock without government intervention
C. Central planners are best equipped to handle external shocks and get the economy back on track
D. It would take the government too long to intervene and get the economy back on track
E. Government intervention is necessary to get the economy back on track
 
5. True or false? The health care restrictions and regulations prevent the entry and exit of firms and prevent the effect of competition on prices.
 
6. True or false? In a market system, those who own the most highly valued resources have the highest incomes.
 
7. True or false? Since consumers do not have to choose whether to use their own money for health care or for something else, the role of price as an allocation mechanism does not work in health care.
 
8. Health economics is important to study for all of the following reasons EXCEPT
 
A. Spending on health care in the U.S. exceeds $2 trillion
B. The elderly are the smallest users of health care, and the young are the major users
C. Only 1% of the population account for almost 30% of total health care expenditures
D. Health care expenditures have risen from 5.9% of GDP in 1965 to over 16% of GDP today
E. None - all of these are true
 
9. An illegal drug dealer will maximize profit by providing and selling the number of drugs where
 
A. Private costs equal social costs
B. The greatest number of consumers can be derived
C. The price is maximized
D. Private property rights are best defined
E. Marginal revenue equals marginal cost

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