Does It Make Any Difference Whether Health-Care Expenditures Are Paid

question 60

Multiple Choice

Does it make any difference whether health-care expenditures are paid for by the consumer or by a third party (the government or an insurance company, for example) ?

• A) No; the quantity of health-care service demanded is not influenced by either the price of health care or who is paying for it.
• B) Yes; consumers of health care will have a stronger incentive to economize when they are buying the service with their own money.
• C) Yes; consumers of health-care services will have a stronger incentive to economize when the services are paid for by a third party.
• D) No; health care is an essential service, and therefore, the incentive to economize on it is unaffected by who is paying for the service.

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Definitions:

Statement Of Financial Affairs

The Statement of Financial Affairs is a comprehensive report detailing the financial transactions and condition of an individual or organization, often used in bankruptcy proceedings.

Cash

Liquid assets held by an entity that are readily available for use in transactions or to pay off debts.

Free Assets

Assets that are not pledged as collateral and can be readily sold or utilized by a company.

Partially Secured Debt

A loan or credit that is backed by collateral to some extent but not fully, presenting a higher risk than fully secured debt.