Working Paper: NBER ID: w1776
Authors: Victor R. Fuchs
Abstract: Current cost containment strategies will undoubtedly result in fewer health services for patients. The analytical framework presented in this paper shows how the effects of reductions in services on health and social welfare depend upon the amount and distribution of services(relative to potential benefit) prior to cost containment and on the size and selectivity of the reductions. Disagreement over whether cost containment has gone too far arises from disagreements about the criterion (health or social welfare), the prior distribution, and how selective the reductions will be. In the long run selectivity will be the key to successful cost containment.
Keywords: cost containment; health services; social welfare
JEL Codes: I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reductions in health services (I14) | health (I19) |
| reductions in health services (I14) | social welfare (I38) |
| reductions in health services (I14) | health and social welfare (I39) |
| selective reductions (C34) | health and social welfare (I39) |
| uniform reductions (C29) | health and social welfare (I39) |
| reductions between q1 and q2 (C69) | health and social welfare (I39) |