Cooper and Mahoney, in their Health Affairs Blog post, "Economic Principles to Guide The Allocation of COVID-19 Provider Relief Runds," argue that externalities are very important in determining how efficiently providers and payers interact during COVID-19.

Review and discuss the questions below.

What do the authors mean when they say, "Public and private payers fund treatment of COVID-19; however, because COVID-19 is highly communicable across persons, payers may not set payment rates high enough to cover the full social benefit of delivering the highest-quality care"?

Deeper question: Do private payers have incentives to set payment rates that take into account "Appropriate treatment of COVID-19 patients also has large positive externalities for the wider economy. Fewer new cases and lower mortality rates will give people the confidence to re-engage in economic activity, and a quicker end to the pandemic will mean that "normal operations" can resume much sooner?"