How does the dual nature of the physician’s role as both adviser and provider support the demand-inducement
hypothesis? What institutional mechanisms support the possibility of demand inducement? How does health
insurance reinforce this effect? What are the natural limits to the alleged problem?
In theory, describe the different operating characteristics of the for-profit and the not-for-profit hospital.
What is cost-plus pricing? How does cost-plus pricing affect supplier behavior?
Compared to fee-for-service payment, what are the advantages and disadvantages of payment based on
diagnosis-related groups?