Working Paper: NBER ID: w12279
Authors: Martin Feldstein
Abstract: A desirable system for providing and financing health care would achieve three goals: (1) preventing the deprivation of care because of a patient's inability to pay; (2) avoiding wasteful spending; and (3) allowing care to reflect the different tastes of individual patients. Although it is not possible to realize fully all three of these goals, they can condition and inform the design of a good system for financing health care. This paper discusses the application of these goals in more detail and use them to consider a reform of the system of Health Savings Accounts that was enacted as part of the 2003 Medicare legislation and, separately, the challenge posed by the very expensive treatments for rare diseases that are becoming more common.
Keywords: health care; health savings accounts; insurance; economic analysis
JEL Codes: I1; H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| insurance (G52) | reduced financial risk (G32) |
| insurance (G52) | moral hazard (G52) |
| excessive care (I11) | increased spending (H56) |
| high deductible/coinsurance (G52) | reduced excessive spending (H61) |