Chapter 14 — Quiz

Multiple choice

Q1. Information asymmetry in healthcare means: a) Patients and doctors have equal information b) One party (usually the doctor) knows more than the other (the patient) about what care is needed c) Insurance companies know everything d) Prices are always transparent

Q2. Moral hazard in healthcare refers to: a) Doctors who commit fraud b) The tendency for insured patients to consume more healthcare because they don't bear the full cost c) The unethical behavior of pharmaceutical companies d) The high cost of medical education

Q3. Adverse selection in health insurance means: a) Insurance companies select the best doctors b) Sicker people are more likely to buy insurance, potentially destabilizing the pool c) Patients always choose the best hospitals d) Healthy people buy more insurance than sick people

Q4. The "death spiral" in insurance markets occurs when: a) Too many people buy insurance b) Adverse selection causes premiums to rise, healthy people to leave, premiums to rise further, in a self-reinforcing loop c) Insurance companies go bankrupt from fraud d) The government regulates insurance too heavily

Q5. The U.S. spends approximately what percentage of GDP on healthcare? a) 8% b) 12% c) 17% d) 25%

Q6. Compared to other rich countries, the U.S. healthcare system: a) Spends more and achieves better outcomes b) Spends more and achieves similar outcomes c) Spends more and achieves worse outcomes on most metrics d) Spends less and achieves worse outcomes

Q7. The primary reason the U.S. spends more on healthcare than other rich countries is: a) Americans use more healthcare services b) Americans are sicker c) Prices for the same services are much higher in the U.S. d) The U.S. has more hospitals

Q8. The UK National Health Service is best described as: a) A private insurance system b) A single-payer, government-run system with care free at the point of use c) A market-based system with minimal regulation d) A system of mandatory savings accounts

Q9. Singapore's healthcare system uses: a) Single-payer government insurance b) Mandatory health savings accounts combined with catastrophic insurance and a safety net c) Employer-sponsored insurance d) No government involvement

Q10. The ACA's individual mandate was designed to address: a) Moral hazard b) Information asymmetry c) Adverse selection (keeping healthy people in the insurance pool) d) High drug prices

Q11. Administrative costs account for approximately what share of U.S. healthcare spending? a) 2–5% b) 15–30% c) 50% d) Less than 1%

Q12. "Medicare for All" is a proposal for: a) Expanding Medicare to cover dental care b) A single-payer system covering all Americans c) Privatizing Medicare d) Reducing Medicare benefits

Short answer

SA1. Explain the principal-agent problem in healthcare. Why is the doctor both the agent and the seller?

SA2. Why does the U.S. spend roughly double what peer countries spend per capita, yet achieve worse health outcomes?

SA3. Compare the UK NHS and the Canadian system on one key dimension.

SA4. What is the "death spiral" in health insurance, and how did the ACA try to prevent it?

SA5. Name one strength and one weakness of the U.S. healthcare system that the COVID pandemic revealed.

True / False

TF1. Americans use significantly more healthcare services than people in other rich countries. (True / False)

TF2. The RAND Health Insurance Experiment found that cost-sharing has no effect on healthcare utilization. (True / False)

TF3. A single-payer system would eliminate all three market failures in healthcare. (True / False)

TF4. Singapore spends less per capita on healthcare than the U.S. (True / False)

TF5. Every country's healthcare system involves tradeoffs among cost, access, quality, and choice. (True / False)

Selected answers in appendices/answers-to-selected.md.