11. Problems and Applications Q11 Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) Consider the following demand curve in the market for medical care. Use the black paint (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $100. Then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $20. 6?) 200 "I- 130 . 160 QDa1P=$1DD g 140 . 3 g 120 OD atP=$20 n. g 100 3 5 an '5 60 n. 40 20 Demand 0 o 10 20 an 40 so an 70 so 90 100 Quantity of Medical Procedures If the cost of each procedure to society is truly $100, and if individuals have health insurance as just described, the number of procedures performed V maximize total surplus. Economists often blame the health insurance system for excessive use of medical care. Given your analysis, the use of care might be viewed as excessive because consumers get procedures whose value is V than the cost of producing them