RI 2026 TP - H2 Econs P1

9757/01/TP/Y6/2026 © RI 2026 [Turn over RAFFLES INSTITUTION 2026 YEAR 6 TIMED PRACTICE Higher 2 ECONOMICS 9757/01 Paper 1 Case Study June 2026 1 hrs 15 minutes Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and civics class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 5 printed pages and 1 blank page.

2 9757/01/TP/Y6/2026 © RI 2026 [Turn over Question 1: Healthcare costs, pharma, price discrimination and patents Figure 1: National Health Expenditure (NHE) in USA, 1970 and 2020 NHE in 1970: USD$100 billion NHE in 2020: USD$4,000 billion Source: Analysis of National Health Expenditure (NHE) data Extract 1: Health expenditure on the rise The average American spends an increasing amount of money on healthcare each year. According to the Center for Studying Health System Change, mergers and partnerships between medical providers are one of the more prominent trends in America’s healthcare system. Increased provider consolidation has decreased market competition. Without this competition, these providers are in positions where they can drive up their prices unopposed. The digital revolution is also having an impact on healthcare costs. Many patients are now able to access services such as professional consultations, testing and monitoring using the internet, wearables and other devices. These new avenues of competition have forced healthcare providers based in brick -and-mortar locations to drive up prices in order to cover their overheads. These technologically-enabled approaches to healthcare are likely to be one of the key forces driving down the cost of global healthcare in the future. But, for now, they remain at a premium. Medical advances can improve our health and extend our life, but they can also lead to an increase in spending and the overutilization of expensive technology and drugs. Patients tend to associate more advanced technology and newer procedures and brand drugs with better care, even if there’s little to no evidence to prove that they’re more effective. This is fueled by the drugmakers’ high launch prices of new brand medication. Moral hazard issues in the health insurance have a part to play in the increased costs of healthcare too. Most insurers pay doctors, hospitals, and other medical providers under a fee- for-service system that reimburses each test, procedure, or visit. This can encourage a high volume of redundant testing and overtreatment. Another prominent concern is that an increasing proportion o