C. Now, suppose that Medicare is to lower the DRG payment rate. Please use the follow graph to trace the changes in demand curves, equilibrium price, privately insured patients served, and Medicare patients served. Please also verbally describe how this related to the concept of cost- shifting.

C. Now, suppose that Medicare is to lower the DRG payment rate. Please use the follow graph to trace the changes in demand curves, equilibrium price, privately insured patients served, and Medicare patients served. Please also verbally describe how this related to the concept of cost- shifting.

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter12: Medicare

Section: Chapter Questions

Problem 1QAP

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Question

C. Now, suppose that Medicare is to lower the DRG payment rate. Please use the follow graph to
trace the changes in demand curves, equilibrium price, privately insured patients served, and
Medicare patients served. Please also verbally describe how this related to the concept of cost-
shifting.
Hospital
Payment
(S)
P₁
0
2₁
QB
MC
Patients
(Hospital Admissions)

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