Abstract
The continuing debate in the United States over the form of health care provision is illustrative as to how difficult that choice can be. The choice is further complicated by political activity—lobbyists with a vested interest in various formats—and a noticeable effect from path dependence—people are used to what they have and are afraid of change, and some groups actually stand to lose from change, at least in the short run. What might the decision have been in the absence of these effects? This chapter creates a model to explore this question. In particular, we appeal to insights from Buchanan and Tullock (1962), Rawls (1971) and Kornai and Eggleston (2001) to ask what type of health care provision would a polity choose from behind the veil of ignorance, and what type of mechanism—unanimity (constitutional) or majority (legislative) would they prefer to use to select it?
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Notes
- 1.
We are grateful to a reviewer for this suggestion.
- 2.
Note however that majoritarian coalitions in representative bodies elected by majority in districts can reflect but a minority support in the electorate, in the extreme speaking for “50 percent of 50 percent.”
- 3.
The choice to enforce or not to enforce the “no care” provision reappears where the entitlement is not universal, and might apply, for example, when the treatment of immigrants/non-citizens is concerned.
- 4.
For arguments regarding the relative efficiencies of single payer versus private insurance systems, see Sieberg and Shvetsova (2012).
- 5.
As noted by a reviewer, the terms ‘soft constraint’ appears to be an oxymoron. We use the term here to distinguish between the intended constraint on health care spending determined by private purchase and the extra spending, that must covered by taxation, because the principal is unwilling in the end to let the people pay the price for their own decisions.
- 6.
In general, taxes can be used to fund a host of services, projects, redistribution schemes, etc. To avoid complication, we merely address the issue of taxation to finance extra health care spending here.
- 7.
If, in addition to differences in values of emergency versus regular care, we include high enough uncertainty as to one’s own health status, we have the potential for everyone to opt for Entitlement.
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Shvetsova, O., Sieberg, K.K. (2013). Deciding How to Choose the Healthcare System. In: Schofield, N., Caballero, G., Kselman, D. (eds) Advances in Political Economy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-35239-3_7
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