Health Economics - derivation of the contract curve:

01. Consider the Edgeworth box with the production of consumption goods B and health- investment goods I. (a) Briefly explain the derivation of the contract curve. (b) How does one derive an individual's PPF in terms of B and I?

02. What will be the effect of a positive education shock ΔE > 0 on labour supply in the Grossman model of health stock demand? (Recall that E enters production functions for B and I.)

03. Using the "supplementary healthcare insurance" graphs (2.3-2.4 in lecture notes), explain whether a private healthcare insurance subsidy may lead to Pareto  improvement over a pure public insurance system.

04. Consider Senator Kirby's healthcare guarantees. (a) Explain their incentive implications for Canadian provincial governments. (b) Would a superfund (a pooled fund with contributions by provincial and federal governments) facilitate its implementation?   
 
05. "In dynamic settings, risk classification can also increase classification risk, which refers to the risk that an individual faces of being re-classified into a higher-cost class at a later date." Risk classification, which doesn't exist under public insurance systems, is efficient. Should it exist?

06. Deductibles and copayments are two common incentive tools in insurance. (a) Explain which informational problems each tool primarily addresses. (b) If only one had to be used, indicate your choice and the justification.  

07.  (a) Is smoking a rational addiction? Explain. (b) What are the available policy tools to reduce smoking and their effectiveness? (c) Do non-smokers carry the healthcare burden of smokers in public healthcare systems?  

08. Explain whether Bismarckian healthcare systems: (a) provide uniform services as in national healthcare systems; (b) cost more than national healthcare systems; (c) require a risk compensation mechanism. 

09. Using the "supplementary healthcare insurance" graphs, explain how can Courchene's baby-boomers' problem be solved and a Pareto improvement be achieved?      
 
10. Community rates will not survive in competitive insurance markets. Explain. 
 
11. How are NYC Mayor Bloomberg's transfat and soft drink policies supposed to work in terms of incentives?