Extra Credit to Be Applied to Final Exam

Extra Credit to Be Applied to Final
DUE DATE November 27
(This question is worth different point
totals depending on Midterm grades)

Mid Term

Point Value
of This Extra Credit





<80 10 Lead poisoning is diagnosed when a child’s blood lead level is greater than 10 mcg/dl. When it is diagnosed children are given chelating agents and their homes are inspected to eliminate the source. Affected children can suffer loss of cognitive function and behavioral changes. The state of Maryland evaluated 3 possible strategies to control lead poisoning: Strategy 1 was to screen only children in high risk zip codes, Strategy 2 was to target based on housing characteristics, Strategy 3 was to screen all children. See .dhmh.maryland.gov/IDEHASharedDocuments/MD%202015%20Lead%20Targeting%20Plan.pdf">http://phpa.dhmh.maryland.gov/IDEHASharedDocuments/MD%202015%20Lead%20Targeting%20Plan.pdf
The annual costs of each strategy are given
in the attached document (page 12). The
total benefits of eradicating all of the lead poisoning effects in one year’s
birth cohort that would occur in the state is estimated at $143 to $556million
(page 89).
Under policy 3, all children in Maryland
face a predictable non-random cost of $14-$20 per child of having a lead
If governor Hogan chooses policy 3 he has
to choose whether to A)Mandate that insurance companies in Maryland cover lead
testing for affected children or B)Mandate higher state taxes and pay for all
lead tests out of state revenue or
C)Mandate that parents have their children lead tested as a condition for
school entry or D)Mandate that all parents receive notification of the benefits
of lead testing, but leave the choice up to parents as a matter of personal
Question 1) Assuming that governor Hogan
wants to maximize the social benefit, which option should he pick and why?
Question 2) Suppose there are no mandates
on insurance companies and they get to choose whether or not they want to cover
the cost of lead screening. Under what
circumstances would companies losemoney by refusing to cover lead
screening? Under what circumstances
would companies gain money by refusing to cover lead screening?
Question 3) Using the higher range
estimates of total estimated cost in the final column of .dhmh.maryland.gov/IDEHASharedDocuments/MD%202015%20Lead%20Targeting%20Plan.pdf”>Table
2 on page 12, what was the incremental social cost of Strategy 3 compared
to Strategy 2? (Show your calculation)
Question 4) In the end, Maryland chose the
most expensive universal screening strategy 3. Read the .dhmh.maryland.gov/IDEHASharedDocuments/MD%202015%20Lead%20Targeting%20Plan.pdf”>attached
document pp 1-13 about how the final strategy was selected. Why did the state choose the more expensive
strategy? Were the incremental social
benefits of the more expensive strategy 3 (compared to less expensive
strategies 1, and 2) higher than the incremental social cost? Say why or why not.



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