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Checkpoint quiz · Healthcare Economics

Healthcare Economics: Checkpoint 1

Covers why healthcare markets behave differently, how premiums are set, drug pricing, and hospital chargemasters.

Five questions on why healthcare markets behave differently, how premiums are set, drug pricing, and hospital chargemaster pricing.

Question 1 of 5 Why is healthcare demand often described as inelastic?

Because prices never change Because people keep buying necessary care even at high prices Because insurance always covers it fully Because hospitals set fixed prices by law

Inelastic demand means quantity demanded barely responds to price - for necessary care, the alternative to paying is often suffering or death, so people pay high prices anyway.

Question 2 of 5 A health insurance premium is primarily based on:

The individual's exact medical spending last year The risk pool's average expected medical costs A fixed government rate The hospital's chargemaster price

Question 3 of 5 What does adverse selection describe in insurance?

Insurers refusing to cover anyone People who expect to need more care being more likely to buy insurance Hospitals overcharging uninsured patients Drug companies raising prices after a patent expires

When sicker people are more motivated to buy insurance than healthy people, the risk pool skews sicker, which pushes premiums up further.

Question 4 of 5 Why can a new drug be sold at a much higher price than its manufacturing cost during its patent period?

Manufacturing is always expensive Patent exclusivity creates a temporary monopoly with no direct competition Government sets all drug prices Pharmacies add most of the markup

Question 5 of 5 What is a hospital chargemaster?

The rate every insurer actually pays An internal list of prices, usually far above negotiated rates A government-set price list A patient's final bill after insurance

The chargemaster is closer to an opening negotiating price than a real transaction price - actual payments come from separately negotiated rates with each insurer.

← Back to Hospital Pricing and the Mystery of the Chargemaster Next lesson → Universal Healthcare Systems Around the World

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