Please answer the following question in essay format. In each case, use your answer as a vehicle for applying concepts and terminology that are covered in the Health Economics course, drawing from the required readings. You can also draw upon supplementary readings.

1. Two missions of the Affordable Care Act pursued in the United States (ACA, aka Obama care) were to: (1) enable all Americans to be insured (entailing regulation of Private insurance industry so as that can happen); and (2) reforming the financing/remuneration of medical care services so as to reign in costs. Drawing on the readings, speculate and then elaborate upon the market failures that these two missions were aimed at addressing. Using this question as a vehicle for exercising course content, speculate on what types of reforms might have been invoked to pursue each of the two missions.

Required Readings:

Olsen Chapter 11-15,16

Gawande, Atul, "The Cost Conundrum," The New Yorker, June 1, 2009, http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande

Supplementary readings:

Devlin, Rose-Anne, Sarma, Sisir and William Hogg, 2006, "Remunerating Primary Care Physicians: Emerging Directions and Policy Options for Canada," Healthcare Quarterly, 9(3).

Gruber, Jonathan and Maria Owings, 1996, "Physician financial incentives and cesarean section delivery," The RAND Journal of Economics, 27 (1), p99-123.