Question

The textbook claims that third party payer systems will lead to over-consumption of the covered products. Answer parts A, B, and C in two to four sentences (for each).

1. Explain how a third-party-payer system might lead to over-consumption of medical services.

2. To the extent that third party payer systems lead to over-consumption of medical services, who pays for these costs in the long-term? (i.e., the third party payer, or someone else?)

3. Explain how a third-party-payer system might lead to the under-consumption of medical services.

Answer 1

A.

On the off chance that the administration mediates to build the stock of human services, there is a potential government disappointment as good peril.

This implies people, realizing that they can get free and powerful medicinal services, neglect to find a way to evade the dangers that social insurance protects against. For instance:

Over-eating, since individuals realize that there is the free treatment for the issues related to heftiness, for example, tablets for hypertension.

Smoking, since lung contaminations can without much of a stretch be treated with anti-infection agents.

Medication misuse, since crisis treatment is uninhibitedly accessible.

These factors can lead to overconsumption.

B.

In a third-party payer system,

To the patient, the framework isn't straightforward. The patient looks for restorative administrations when he needs them, the supplier charges his expense, and the insurance agency pays. In any case, what the supplier charged and what the insurance agency pays, the patient may never truly know or consider. So the patient doesn't look for his consideration at the most reduced conceivable expense or the best worth, as he may in the event that he was purchasing a cooler. There's no market interest having an effect on everything, and the costs simply winding upward.

C.

In a third party payer system,

The specialists' charges don't serve the capacity that costs serve in different markets.

So when suppliers don't contend on value, they don't contend on quality either. Medical clinics don't contend on cost or quality. They contend on enhancements. Specialists (with the most simple workplaces of any of the callings) are not in any event, contending on amenities. So the absence of value prompts underutilization.