Chapter 1 – Introduction
Key Ideas
• How is health care like other goods? How is it different?
• How big are the health care sectors in the United States and elsewhere?
• Does economics apply to health care?
Teaching Tips
• Appeal to students’ experiences. Do we buy health care in the same way that we
buy other goods? Does this apply to emergency care? to drugs? to chronic
conditions? How does health insurance enter into this?
• There is a host of health related web sites available. The more durable ones
include:
o National Institutes of Health (www.nih.gov/)
o Centers for Medicare and Medicaid Services, formerly the Health Care
Financing Administration, or HCFA (cms.hhs.gov/)
o Social Security Administration (www.ssa.gov/)
o Bureau of the Census (www.census.gov/)
o Center for Disease Control (www.cdc.gov/)
o Organization for Economic Cooperation and Development, for
international data (www.oecd.org/)
,• Nearly every daily newspaper has health reports, and there is a multitude of
health-related web sites. Instructors may find it useful to assign a five-minute
presentation at the beginning of the class, taken either from the web or from
newspapers. Students may use presentation software or transparencies as
visual aides.
,Chapter 1 – Introduction – Multiple Choice
1. Since the 1970s health care spending in the United States has risen from about
____ to about _____ percent of the Gross Domestic Product.
a. 5; 10.
b. 6; 13.
c. 7: 16. *
d. 8; 17.
2. The intrinsic value of health can be measured in terms of:
a. degree to which people feel better.
b. reduced absenteeism rates.
c. increased output per worker.
d. answers (a), (b), and (c) are correct.*
3. Rather than aggregate health expenditures, we often look at real expenditures
per capita. This calculation requires us to deflate the aggregate expenditures by:
a. the purchasing power of the currency.
b. the size of the population.
c. the cost of health care.
d. Answers (a) and (b) are correct.*
, 4. The following is not a measure of health outcome:
a. Number of physicians per capita.*
b. Population incidence of malaria.
c. Death rate for children under the age of 5.
d. Estimated men’s lifespan.
5. Table 1-2 in the text indicates that in 2006_____ spent the highest percentages of
their GDPs on health, whereas _____ spent the lowest percentages.
a. Australia and Belgium; Canada and Denmark
b. France and Hungary; Portugal and Spain
c. The United States and Switzerland; Turkey and Poland*
d. The United Kingdom and Sweden; Ireland and Italy
Key Ideas
• How is health care like other goods? How is it different?
• How big are the health care sectors in the United States and elsewhere?
• Does economics apply to health care?
Teaching Tips
• Appeal to students’ experiences. Do we buy health care in the same way that we
buy other goods? Does this apply to emergency care? to drugs? to chronic
conditions? How does health insurance enter into this?
• There is a host of health related web sites available. The more durable ones
include:
o National Institutes of Health (www.nih.gov/)
o Centers for Medicare and Medicaid Services, formerly the Health Care
Financing Administration, or HCFA (cms.hhs.gov/)
o Social Security Administration (www.ssa.gov/)
o Bureau of the Census (www.census.gov/)
o Center for Disease Control (www.cdc.gov/)
o Organization for Economic Cooperation and Development, for
international data (www.oecd.org/)
,• Nearly every daily newspaper has health reports, and there is a multitude of
health-related web sites. Instructors may find it useful to assign a five-minute
presentation at the beginning of the class, taken either from the web or from
newspapers. Students may use presentation software or transparencies as
visual aides.
,Chapter 1 – Introduction – Multiple Choice
1. Since the 1970s health care spending in the United States has risen from about
____ to about _____ percent of the Gross Domestic Product.
a. 5; 10.
b. 6; 13.
c. 7: 16. *
d. 8; 17.
2. The intrinsic value of health can be measured in terms of:
a. degree to which people feel better.
b. reduced absenteeism rates.
c. increased output per worker.
d. answers (a), (b), and (c) are correct.*
3. Rather than aggregate health expenditures, we often look at real expenditures
per capita. This calculation requires us to deflate the aggregate expenditures by:
a. the purchasing power of the currency.
b. the size of the population.
c. the cost of health care.
d. Answers (a) and (b) are correct.*
, 4. The following is not a measure of health outcome:
a. Number of physicians per capita.*
b. Population incidence of malaria.
c. Death rate for children under the age of 5.
d. Estimated men’s lifespan.
5. Table 1-2 in the text indicates that in 2006_____ spent the highest percentages of
their GDPs on health, whereas _____ spent the lowest percentages.
a. Australia and Belgium; Canada and Denmark
b. France and Hungary; Portugal and Spain
c. The United States and Switzerland; Turkey and Poland*
d. The United Kingdom and Sweden; Ireland and Italy
