Discuss the ethics of HMOs rewarding physicians for keeping utilization costs down.

Complete Problems 1-4 in Chapter 12 of the textbook.

1. PPO Charges. A PPO uses a discount on charge
arrangement. Marie incurred total charges by a
hospital of $20,000, and the percentage paid to
the provider is 70%. Marie’s contract with the
PPO specifies her co-pay as 20%. How much does
Marie have to pay?
2. Stop-Loss Provision. Pete’s health insurance policy
specifies that he should pay 30% of expenses
associated with a long-term illness, and he has a
stop-loss provision of $35,000 in his policy. If Pete
incurs expenses of $70,000, how much would he
owe?
3. Disability Insurance. Christine’s total monthly
expenses typically amount to $1,800. About $50
of these expenses are work related. Christine’s
employer provides disability insurance coverage
of $500 per month. How much individual disability
insurance should Christine purchase?
4. Ethical Dilemma. Vera is an 85-year-old widow
and retiree from a large corporation. Her former
employer recently changed the health care coverage
for retirees to an HMO. Vera is having difficulty with
her knees and has requested a referral to an orthopedist.
After ordering x-rays, her primary care physician
informs her that her knees are not serious enough
to warrant knee replacement and he gives her a
prescription to alleviate the pain. Several weeks later
Vera reads an article that doctors in her HMO are
rewarded for keeping utilization costs down.
a. Discuss the ethics of HMOs rewarding physicians
for keeping utilization costs down.
b. Does Vera have any options?

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