Explain the economic reasoning underlying the following statement: “People often fail to acquire information about the...
Explain the economic reasoning underlying the following statement: “People often fail to acquire information about the price they pay for medical services because of health insurance.”
Homework Answers
This statement is claiming that when people have health insurance they are less likely to shop around or compare prices for their medical treatment.
Health insurance does likely play a factor in why people do not compare pricing for medical care, however, the lack of availability in treatment pricing may also play into this phenomenon. Regardless of the cause, not seeking the best quality of care to price ratio treatment will result in major overspending on both the patient's and the insurance company's behalf.
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