Question

The textbook claims that third party payer systems will lead to over-consumption of the covered products. Answer parts A, B, and C in two to four sentences (for each).

1. Explain how a third-party-payer system might lead to over-consumption of medical services.

2. To the extent that third party payer systems lead to over-consumption of medical services, who pays for these costs in the long-term? (i.e., the third party payer, or someone else?)

3. Explain how a third-party-payer system might lead to the under-consumption of medical services.

Answer 1

Page : Date: Over Consumption of medical services, Over consumption of medical services happene When third party sectem operatu and there ů no trampauney about cart Incurud. brices charged to these third party (insurance company) is not revealed - patient cant estimate total cost of treatment. When a Canadian or an American visit a. doctor - the service is free. Somitems Masteful overconsumption of health care facilities occur became patient is unaware of call and to hem it appears cheap lower of these costa - 1B I au long teem, the real payer of these health care services becomes the neweed patient itself because third party system works on premium paid ley a pueron with dueurance. ' and because of lack of transparency a bandage costed $10 or $100 a patient care

I determine - so sometimes the cost outweighs the benefits recieved from third-pacity lystem : Sin some couenies governmene lears the cost. (C) Cender concemntion of medical wouices → This system led to disturbance in doctor- Patient relationship. Third party decides and interferes on tests to be performed & Third parties by avoiding cost regarding I test, procedures evigny scheduling without even coneelting with patient. & Lack of to ansparency makes it difficult to elecide if they have been green eevices as per the cost they aree bearing