The Growth of Third-Party Payments Has Resulted in Higher Prices

question 509

Multiple Choice

The growth of third-party payments has resulted in higher prices for health-care services because

• A) the lower out-of-pocket cost for consumers has increased the demand for health-care services.
• B) consumers have less of an incentive to economize and shop for low-cost services when they pay a lower share of their bill.
• C) producers have less of an incentive to provide health-care services at a low price when consumers are not as cost conscious.
• D) All of the above are true.

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Definitions:

Contra-Liability Account

An account that decreases the balance of a related liability account, representing a credit balance in the liability section of the balance sheet.

Continuing Operations

The segments or activities of a business that are expected to continue for the foreseeable future, excluding discontinued operations.

Asset Retirement Obligations

Legal obligations associated with the retirement of a tangible, long-lived asset that result from its acquisition, construction, development, or normal operations.