Each year, almost 200,000 men are diagnosed with prostate cancer. Decision making is complicated because there are

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Each year, almost 200,000 men are diagnosed with prostate cancer. Decision making is complicated because there are up to five potential treatments, ranging from aggressive surgery to radiation to “watchful waiting” (that is, carefully monitoring slow-growing cancers). One recently developed treatment is IMRT, a sophisticated technology that delivers radiation to kill and (hopefully) eliminate cancerous cells. The treatment mainly takes place in hospitals that are reimbursed by insurance programs. However, in more than a dozen states, private urology practices have emerged that not only diagnose and advise patients, but also own IMRT equipment and hire radiologists to administer the treatment. These practices are reimbursed by private insurers and Medicaid.
a. Private urologists cite the advantages of their carrying out IMRT. What kinds of advantages are possible?
b. Citing IMRT’s high cost, critics claim that putting IMRT in private urologists’ hands is leading to cost escalation. Why might this be the case? Under this setup, is there a danger of overtreatment? Why or why not?

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Managerial economics

ISBN: 978-1118041581

7th edition

Authors: william f. samuelson stephen g. marks

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