Analysts believe that although the medical arms race may have led to quality competition in the 1980s _____ has led to more price competition since the 1990s.
a. selective contracting through managed care
b. prospective payment
c. economies of scale
d. Answers (a) and (b) are correct
Is (d) correct?
To determine whether option (d) is correct, let's analyze the question and the statements mentioned.
The question states that analysts believe the medical arms race may have led to quality competition in the 1980s, but something else has led to more price competition since the 1990s.
Option (a) mentions selective contracting through managed care, which is a method where insurers selectively contract with certain healthcare providers to offer services at discounted rates. This can create price competition among providers.
Option (b) refers to prospective payment, which is a payment method where healthcare providers are reimbursed a predetermined amount for each specific service rendered. It can stimulate price competition as providers try to provide services at a lower cost to maximize their reimbursement.
Option (c) mentions economies of scale, which is a concept where larger organizations can produce goods or services at a lower cost per unit. While this can influence price competition to some extent, it may not be directly related to the context of the question.
Based on the explanations above, we can conclude that option (d), which states that both options (a) and (b) are correct, is indeed correct.