ECON 409 Lecture Notes - Lecture 8: University Health Network, Information Asymmetry, Shortage
21 Aug 2019
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Document Summary
Poverty & health care: need to correct moral hazards in the most efficient way. Should the waiting patients have the right to pay: university health network in toronto has been taking in international patients for orthopedic procedures for a profit of approximately 30 million dollars. Yet, a canadian citizen who is in severe pain and how has paid taxes && willing to pay for surgery, is put on a waiting list. It derives from the infrastructure of modern health care, where a third party pays for the health care provided by the doctor. Implications: marginal cost of health care is free to patient, and the doctor is not constrained by patients ability to pay, moral hazard issues arise They are able to shift the demand, by prescribing people expensive treatments & increased quantities, thus shifting the demand to the right.
