Question

1. Suppose that the quantity demanded of visits to a doctor per year is given by 10X = 120 - (1/2)P   where X is the number of visits and P is the price the patient pays for a visit.

1. How many visits would the patient make if he or she had to pay the full price of a visit, $100?
2. How many visits would a patient make if he or she was insured and had to pay only a 20% co-insurance payment per visit?
3. How many visits would a patient make if he or she was insured and had to pay only a 15% co-insurance payment per visit?
4. How many visits would the patient make if medical services were free?
5. Comment on the role of copay on the number visits made.

Answer 1

Solution:-

Here ,

X is the number of visit to a doctor per Year.

P is the price paid by patient for a vist

a)Number of visits would the patient if she pay price $100 per visit

10X=120-(1/2)P

   10X=120-(1/2)100

   10X=120-50

   10X=70

   X=70/10=7

Total Number of Visit is 7 times if the she pays 100 per visit.

b)Number of Visit would a patient make if she insured and had to pay only 20% co-insurance       payment per Visit

Price paid by patient is only $20(P) ($100*20%)

10X=120-(1/2)P

10X=120-(1/2)20

10X=120-10

10X=110

X=110/10=11 Times

Total Number of visits is 11 times is she pays only 20%

c) Number of Visit would a patient make if she insured and had to pay only 15% co-insurance       payment per Visit

  10X=120-(1/2)P

  10X=120-(1/2)15

  10X=120-7.5

  10X=112.5

   X=112.5/10=11 Times

    Number of times shall be above 11 times

d)Number of visits if medical services are free

    10X=120-(1/2)P

  10X=120-(1/2)0

  10X=120

  X =120/10=12 times

If the medical services are free then she can visit 12 times.

e)Copay means it is a fixed amount of payment paid by a patient for a covered services to the provider of services. Insurance companies shall be the co-payment of share for the health care costs payable by the patient .Simply copay is the system of health care cost sharing