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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol, Emmanuelle / Brunner, Johann / Fleck, Robert / Mastrobuoni, Giovanni / Mendola, Mariapia / Requate, Till / de Vries, Frans / Zulehner, Christine

4 Issues per year

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Volume 4, Issue 1


Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

Commitment and Discretion in Health Care Policy Making

Robert Rosenman / Daniel Friesner
Published Online: 2004-03-16 | DOI: https://doi.org/10.2202/1538-0653.1167


This paper analyzes the welfare effect from government sponsored insurance under two policy regimes for reimbursement levels – the first under which policy makers commit to a specific reimbursement schedule, the second which allows discretion in setting reimbursement schedules. We find that prices and quality will differ depending on which policy regimen is followed. We are able to identify a level for the policy maker’s elasticity of utility with respect to its policy tool under which government insured patients are unambiguously better off with policy commitment. The ordering of welfare is reversed if the elasticity of utility is reversed. In either case, privately insured patients may be better or worse off.

Keywords: cost shifting; cost adjusting; government reimbursement; rules versus discretion

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Published Online: 2004-03-16

Citation Information: Topics in Economic Analysis & Policy, Volume 4, Issue 1, ISSN (Online) 1538-0653, DOI: https://doi.org/10.2202/1538-0653.1167.

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