1. Please, explain why economic evaluation is absolutely necessary in healthcare

2.Please, discuss the importance of comparing the best alternatives

3.Please, describe standard models of market structure and discuss the importance of market power in healthcare

4. Please, discuss bargaining between insurers and providers, and HHI identification of concentrated markets. And as a question, please, solve excercise 15.9

Excercise 15.9

Two clinics want to merge. The price elasticity of demand is 0.20, and each clinic has fixed costs of $60,000. One clinic has a volume of 7,200, marginal costs of $60, and a market share of 2 percent. The other clinic has a volume of 10,800, marginal costs of $60, and a market share of 4 percent. The merged firm would have a volume of 18,000, fixed costs of $80,000, marginal costs of $60, and a market share of 6 percent.

a. What are the total costs, revenues, and profits for each clinic and for the merged firm?

b. How does the merger affect markups and profits?

5. Please, define asymmetric information and opportunism, describing strategies for aligning incentives

6. Please, describe two strategies for aligning incentives, and explain why opportunism is a special management challenge in healthcare

7. Please, discuss challenges in limiting opportunism and explain incentives solving Exercise 13.5

Exercise 13.5

One physical therapist is paid $20 per session. Another is paid $400 per week plus $20 per session in excess of 20 sessions per week. A third is paid $400 per week, plus $200 per week for having all paperwork completed and filed within 48 hours, plus $20 per session in excess of 30 sessions per week. How do the therapists' incentives to produce sessions compare? How do their incentives to completed paperwork differ?