Lead poisoning is diagnosed when a child’s blood lead level is greater than 10 mcg/dl

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 http://phpa.dhmh.maryland.gov/IDEHASharedDocuments/MD%202015%20Lead%20Targeting%20Plan.pdfThe 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 test.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 freedom.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 companieslosemoney by refusing to cover lead screening? Under what circumstances would companiesgainmoney by refusing to cover lead screening?Question 3) Using the higher range estimates of total estimated cost in the final column of 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 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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