One Problem with Third-Party Financing of Health Care Is That

question 113

Multiple Choice

One problem with third-party financing of health care is that

• A) people have more incentive to utilize health care.
• B) demand falls so that suppliers cannot take advantage of economies of scale.
• C) it reduces the quality of health care people receive.
• D) it discourages people from relying on their physicians' advice in making health care decisions.

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Definitions:

Cash Flow Information

provides details about a company's cash inflows and outflows over a period.

Direct Method

A cash flow statement presentation technique that lists specific types of cash inflow and outflow transactions directly.

Indirect Method

A method for calculating cash flows in which net income is adjusted for changes in balance sheet accounts to reflect cash transactions.

Cash Equivalent

Short-term, highly liquid investments that are easily convertible to known amounts of cash and very close to their maturity.