Principles of Microeconomics / Unit 15 MIC 1410 short lesson, about 20 seconds
Third-Party Payers
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The idea
When an insurer pays most of a bill, patients face a low price and demand more visits; supplying them takes a higher price, which the insurer pays. Quantity, the providers' price and spending all rise.
In practice
A fifteen-dollar copay raises visits from eight hundred thousand to twelve hundred thousand.
Where people slip
Equilibrium is not where demand meets supply; a third party sits in the gap.
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