Healthcare Economics Scenario
Mrs. Siegal has two alternative activities to help relieve
her backache. In the first, she can visit a physiotherapist. The total time for
a physiotherapist visit, including travel and waiting, is two hours. Mrs.
Siegal earns a wage of $20 an hour. Physiotherapists charge $50 per visit, and
Mrs. Siegal does not have any health insurance. As a second alternative, Mrs.
Siegal can take pain killers. Each pill costs 50 cents, and Mrs. Siegal needs
to take 30 pills per month. The two treatments are not equally effective. The
physiotherapy visits yield 10 additional healthy days per month, while the
pills yield 6 healthy days.
a. If Mrs. Siegal can only choose one alternative, and if
she wants to maximize the most healthy days per dollar that she gets, which
option will she choose?
b. If the price of a pill increases to $3, which option will
she choose?
Healthcare Economics Scenario
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