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.”

Expert Solution

Information clarity and accessibility are key to a well functioning economic market. When prices are not accessible consumers will likely over spend, since they cannot easily determine the product or service that best fits their budget. This given 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 patients and the insurance company's behalf.

Rahul Sunny answered 2 years ago

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