CEBS GBA Exam 2 2023 LATEST QUESTIONS WITH COMPLETE SOLUTIONS GRADED A+

What is the basic assumption underlying concept of a free market and how is it challenged by the theory of "bounded rationality?" (Mod 1.1) - ANSWER Rational customers will make informed decisions about value, quality and price, while producers who meet consumer's demands will be rewarded with market share and profit. What are economic benefits of a free market? (Mod 1.1) - ANSWER If an individual does not like their provider or health plan, the should be able to "vote with their feet" and select other options. This choice empowers customers, regulates producers and drives efficiency. Describe several ways the US Healthcare market does not function like a normal market. (Mod 1.1) - ANSWER Healthcare market has significant asymmetry in information between consumers, providers and insurers. Moral hazard is a problem because the marginal cost of covered care is zero, causing some to over consume medical care. List several recent initiatives in the US that purport (to claim, often falsely) to use market forces to increase efficiency in the healthcare system. (Mod 1.1) - ANSWER 1) Employers are offering more HDHPs with some as high as $10,000. 2) ACA is creating marketplaces that employ a form of managed competition where standardized health plans compete on cost and quality. 3) Public Medicaid and Medicare programs are moving towards requiring or making choices available for managed care products that structure care within provider networks.