Arbeitspapier

Financing and Funding Health Care: Optimal Policy and Political Implementability

Health care financing and funding are usually analyzed in isolation. This paper combines the corresponding strands of the literature and thereby advances our understanding of the important interaction between them. We investigate the impact of three modes of health care financing, namely, optimal income taxation, proportional income taxation, and insurance premiums, on optimal provider payment and on the political implementability of optimal policies under majority voting. Considering a standard multi-task agency framework we show that optimal health care policies will generally differ across financing regimes when the health authority has redistributive concerns. We show that health care financing also has a bearing on the political implementability of optimal health care policies. Our results demonstrate that an isolated analysis of (optimal) provider payment rests on very strong assumptions regarding both the financing of health care and the redistributive preferences of the health authority.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 4893

Classification
Wirtschaft
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Health and Inequality
Health: Government Policy; Regulation; Public Health
Subject
health care financing
provider payment
service quality
cost containment
political economy

Event
Geistige Schöpfung
(who)
Nuscheler, Robert
Roeder, Kerstin
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2014

Handle
Last update
03.11.2025, 11:17 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Nuscheler, Robert
  • Roeder, Kerstin
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2014

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