(1) A model of the determinants of health combines three economic variables and two economic relationships. For instance, the three economic variables are: The amount a patient pays for a visit to a...

ANSWER 1.
(1)



( ) (2)
From (1) and (2)



( )
(3)
(4)
Expression (3) implies that, firstly, there is a negative relationship between number of healthy
days and the fees of a visit to physiotherapist; secondly, when fess per visit of the physiotherapist
increases by $100, then number of healthy days reduce by 45 days in a year. This is because a
higher fee leads to less number of visits to physiotherapist, which increases the recovery days
and reduces the healthy days in a year.
Expression (4) conveys the negative relationship between number of healthy days and the fees of
a visit to physiotherapist, same as expression (3). Further, it conveys that if the patient could
achieve one extra healthy day in a year, only when the fees per visit decreases by $2.22. This is
ecause more number of healthy days requires more number of visits which are affordable only
when price falls.
ANSWER 2.
Year Population Physicians
Physician
Services
(thousands)
population in
thousands
physicians per
thousand
per capita physician
services
% change in per
capita usage
2002 31,577,000 56,080 520,800
31577000/1000
=31577
56080/31577
=1.78
(520800*1000)/31577000
=16.49
2003 31,988,700 58,230 558,500
31988700/1000
=31988.7
58230/31988.7
=1.82
(558500*1000)/31988700
=17.46
((17.46-
16.49)/16.49)*100
=5.86
2004 32,509,000 59,850 570,200
32509000/1000
=32509
59850/32509
=1.84
(570200*1000)/32509000
=17.54
((17.54-
17.46)/17.46)*100
=0.46
2005 33,037,000 60,925 589,300
33037000/1000
=33037
60925/33037
=1.84
(589300*1000)/33037000
=17.84
((17.84-
17.54)/17.54)*100
=1.70
a) The figures for physician per thousand population range from 1.78 to 1.84 from 2002 to
2005, this conveys that there is shortage of healthcare facilities in Canada, since there are
less than 2 physicians to provide health care services to thousand people. Though the
figure has grown slightly from 1.78 to 1.84 over the span of four years, but still there
appears to be greater need of increasing the number of physicians in Canada.
) The positive percentage change in physician services per capita usage conveys that every
year service provision has increased, particularly in 2003 with 5.86% increase.
ANSWER 3.
Total health care services amount =$435+ $410+ 385 = $1230
25% co-payment clause: so, plan cost will comprise of 75% of the health care expense
Plan amount = 1230 – (25% of 1230) = 1230 – 307.5 = $922.5
Loading cost= 65%
Plan cost = 922.5 + (65% of 922.5)= 922.5 + 599.625 = $1522.125
NEMO will pay 50% of the plan cost
Payment by NEMO=50% of 1522.125 = $761.0625
Annual premium by employees = 1522.125 – 761.0625 = $761.0625
Monthly premium for employees = 761.0625/12 = $63.42
ANSWER 5.
Plan A: one or two doctors
number
of new
doctors
eduction in
mortality per
thousand
population
lives
saved/marginal
product, MP
marginal
cost,MC
marginal
output per $
spent=MP/MC
1 (11-9.5)=1.5
(1.5/1000)*12000=
18 250000
(18/250000)
=0.000072
2 (9.5-9)= 0.5
(0.5/1000)*12000=
6 250000
(6/250000)
=0.000024
Plan B: two nurses
number
of new
nurses
eduction in
mortality per
thousand
population
lives
saved/marginal
product, MP
marginal
cost,MC
marginal
output per $
spent=MP/MC
1 0.8
(0.8/1000)*12000=
9.6 100000
(9.6/100000)
=0.000096
2 0.6
(0.6/1000)*12000=
7.2 100000
(7.2/100000)
=0.000072
It can be observed that the marginal product or marginal lives saved per unit of dollar spent by
addition of first doctor is 0.000072 and that by addition of second doctor 0.000024. Further, the
marginal product or marginal lives saved per unit of dollar spent by addition of first nurse is
0.000096 and that by addition of second nurse 0.000072.
A careful comparison conveys that the marginal product of the first nurse is...