This is an economy online course assignment.

just answer 4 questions which are no words requirements.
1. Assignment one is about health care €“ in the US €“ people pay two ways €“ either they pay for it them selves or the businesses pay 1/2 or more for their employees.
As the cost of health care has risen in the US many companies are being forced to either pay a smaller per centage for the employee or fire the employee to keep costs down.
US citizens previously were used to unlimited health care paid by the employer. Now they have to look at the true costs.
Malpractice insurance is set by the states . If the malpractice insurance is high it increases the costs to doctors of practicing medicine. If the put a cap on mal practice settlements the insurance companies could charge less to the doctors.

THE INFORMED PATIENT
By LAURA LANDRO
Consumer Responsibility Rises
In Line With Health-Care Costs

As the debate heats up on spiraling health-care costs, consumers are under mounting pressure to curb their own health spending. Soon, they won’t have much choice.

More employers are turning to so-called consumer-driven health plans, which typically cap the amount employees can spend on health care in any given year and require them to pay anything extra out of their own pockets. Others are raising co-payments and deductibles.

You are going to be paying more of the health-care bill, so accept it, and prepare to do something about it, advises Bruce A. Boissonnault, president of Niagara Health Quality Coalition, whose members include employers and providers in New York State.

The cost sharing is already evident. After dropping significantly from 1996 to 2001, the amount deducted from employee paychecks each month for single-person coverage rose by $8 in 2002, to $38. That amount could hit $46 monthly in 2003, says Jon Gabel, a vice president at the nonprofit Health Research and Education Trust who tracks changes in health benefits. Average annual deductibles in preferred-provider plans jumped to $276 last year from $201 and could see similar increases this year, he says.

The next evolution is putting more of the responsibility in patients’ hands and making them aware of what costs are, says Robert Boone, vice president of human resources for Isle of Capri Casinos. The Biloxi, Miss., casino operator recently began offering its 7,000 covered employees a personal care account of $1,000 annually to cover all drug and medical expenses. Once you use up the first $1,000, you are responsible for the next $1,000, so you want to stretch the company’s dollars as far as you can, Mr. Boone says. (To make such plans palatable, there is usually catastrophic coverage; the casino company will cover 80% of costs over $2,000 and 100% over $4,200.)

Benefits experts and health-care economists say insured Americans have become so used to someone else picking up most of the tab for health care that they take benefits for granted, and have little idea how much health care really costs. They also want access to promising new therapies and drugs, and they see no reason to ration themselves when it comes to health care.

Consumers don’t want to accept the idea of scarcity in health care, or the idea that we can’t do everything that’s possible, says Mr. Gabel.

According to a new poll from Towers Perrin, the human-resourcing consulting firm, employees agree that rising health-care costs are a problem €” but they don’t believe it is theirs to fix. Less than half of those surveyed believe their company can’t absorb higher costs, or that it is fair for employers to ask them to pay more out of pocket.

They feel they already pay a fair share of health-care costs and view themselves as effective health-care consumers, says Jim Foreman, a Towers Perrin managing director.

Often, they aren’t, though, and companies are trying to change that. Some employers are becoming more proactive in steering employees to lower-cost doctors and hospitals, nudging them into disease-management programs, and showering them with incentives to pursue healthier lifestyles in the hopes they will not only spend less on health care, but need less of it in the long run. Once consumers are footing more of the bill, the thinking goes, they will also more carefully consider elective procedures and unnecessary doctor visits, and start shopping around for health-care services just as they do for most other things.

First Health Group Corp., which provides health-benefit services for employers, is trying to encourage members to gravitate toward cost effective doctors in its preferred-provider network. First Health will call members who submit claims from other doctors exceeding a certain dollar amount to suggest lower-cost providers in its network, and provide care support nurses to help members manage chronic conditions and evaluate whether a doctor visit is necessary.

It’s not about limiting health care but making consumers more aware of the cost implications of their care and giving them the tools to make more informed decisions, says Susan Fleming, a senior vice president at First Health, based in Downers Grove, Ill.

Similarly, more health plans are grouping hospitals into cost tiers, and requiring employees to pay more out-of-pocket for the most expensive ones, similar to the strategy of steering consumers aware from costly brand-name drugs to generic drugs.

Health-care consumers also need to know that quality and cost don’t always go hand-in-hand, and that shopping might be in order. Consumers can use the growing number of hospital report cards based on quality measures such as mortality rates and success rates with various procedures. For example, the Niagara coalition sponsors a Web site, myhealthfinder.com1, which provides information on medical costs and hospital quality, and includes links to such resources as the Hospital Profiler Consumer Guide sponsored by Ford Motor Co., General Motors Corp. and the United Auto Workers.

Though such data are available so far only for a handful of states such as New York and Pennsylvania, Mr. Boissonnault of the Niagara coalition says consumers can easily pick up the phone and ask providers for cost data, and negotiate rates for elective surgery.

Car buyers often will shop at more than one dealership because it’s their money and they want to ensure it is wisely used, he notes. The same will be true of many health-care services.

Copyright 2003 Dow Jones & Company, Inc. All Rights Reserved

TITLE: The Informed Patient. Consumer Responsibility Rises With Costs
REPORTER: Laura Landro
SUMMARY: Health insurance companies, and the firms that offer the insurance to
their employees, are attempting to reduce the cost of health care by making
consumers more responsible for the costs of their health-care services. In
plans that are becoming more common, employers pay for example the first $1,000
of health-care costs each year, the employee is responsible for the next
$1,000, and after that, the employee pays 20% of the annual cost, up to a
maximum out-of-pocket expense. By making consumers more responsible for the
cost of their care, they should make more economically efficient decisions.
Jon Gabel, a vice president at the non-profit Health Research and Education
Trust, states, Consumers don’t want to accept the idea of scarcity in health
care, or the idea that we can’t do everything that’s possible. Furthermore,
some health plans are grouping hospitals into cost tiers, and requiring
employees to pay more out-of-pocket for the most expensive ones. With greater
consumer financial responsibility, consumers will learn that quality and cost
are not always one-to-one. Consumers will pay more attention to hospital
quality ratings.

The related article is about physician strikes, aimed at pushing state
governments to legislate caps in medical malpractice awards.

QUESTIONS:
1.) Evaluate the comment, Consumers don’t want to accept the idea of scarcity
in health care, or the idea that we can’t do everything that’s possible.
Discuss opportunity cost.

2.) In the insurance plan mentioned in the article, the employer pays the first
$1,000 of medical bills, the employee pays the next $1,000, and after that, the
employee pays a co-payment up to a maximum out-of-pocket expense. Consider an
alternative plan. Suppose the employee pays the first $1,000, the employer
pays the next $1,000, and then the co-payment kicks in. Compare the effect of
which party pays the first $1,000 on the employee’s incentive to reduce his or
her medical expenses. What are the determinants of the demand for health care ?

3.) Should state governments place caps on medical malpractice awards? Discuss
both excessive awards and the incentive of physicians to provide high-quality
service. How does Malpractice insurance effect the supply of physicians.

4.) Why not let the government provide health care? Mix the government with the Marketlace Be sure and include Adam Smith in your discussion.