CEBS GBA Exam 2 Question with complete solution 2023

CEBS GBA Exam 2 Question with complete solution 2023What is the basic assumption underlying concept of a free market and how is it challenged by the theory of "bounded rationality?" (Mod 1.1) Assumption that 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. However this is challenged by the consumer's "bounded rationality" - rational consumer is only functional up to a certain point because choices are constrained or bound by limited knowledge and understanding of their choices. What are economic benefits of a free market? (Mod 1.1) 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) 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 overconsume medical care. Many consumers choose doctors initially by convenience, accessibility or recommendation. Cost has also been shown to be lower on priority scale for choosing a provider. 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) 1) Employers are offering more HDHPs with some as high as $10,000. These plans, often paired with HSAs, are coupled with the idea of transparency, or making more info available to consumer on cost and quality. Idea is that consumers will have more skin in game and be prudent purchasers of care with their own money. 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. Indicate the approximate percentages of the population covered by major health programs. (Mod 1.2) Largest portion of Americans (48%) receive health insurance through an Employer, 16% through Medicaid, 15% through Medicare, 6% purchase insurance on their own How did ACA change Medicare? (Mod 1.2) ACA expanded Medicare's wellness and prevention benefits, improved prescription drug coverage and financed experiments to control health care costs by testing alternative payment methods and delivery systems.