Which of the following reimbursement and consumer copayment schemes would have t

Question

Which of the following reimbursement and consumer copayment schemes would have the greatest and lowest likelyhood of producing high-cost, low-benefit medicine? Be sure to explain your answers and complete each section. (refers to the financing of health, not the consumer experience) A. Fee-for-service with 40% consumer copayment B. Prepaid Health plan with 40% consumer copayment C. Fee-for-service with no consumer cost sharing D. Fixed salary with no consumer cost sharing E. Prepaid health plan with no consumer cost sharing F Fixed salary with 40% consumer cost sharing

Explanation / Answer

1. Fee-for-service with 40% consumer copayment

Consumers are always sensitive to price so this scheme would create a moderate incentive plan.

2. Prepaid Health plan with 40% consumer copayment

This would not create much incentive since the consumer and producers both react to costs.

3. Fee-for-service with no consumer cost sharing

Here there would be significant incentives since no one will be bearing the financial risk

4. Fixed salary with no consumer cost sharing.

This would create little incentives.

5. Prepaid health plan with no consumer cost sharing.

This would again create moderate incentives

6. Fixed salary with 40% consumer cost sharing

This would create moderate incentives since the consumers will react to financial risks.

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