Technological innovation in medical services can improve health, but its ability to reach patients often depends on price signals for downstream providers, which can also be discordant across production inputs. We examine such a context when Medicare sharply revises facility fees--while holding...

The paper examines whether, among inpatient psychiatric admissions in California, for-profit (FP) hospitals engage in cream skimming, i.e., choosing patients for some characteristic(s) other than their need for care, which enhances the profitability of the provider. We propose a novel approach...

This paper contributes to the analysis of policy measures that attempt to reduce health care expenditures of insurers. We examine the impact of a cash bonus program for preventive health behavior of a German health insurer on prevention effort and health care expenditures using a unique...

We study the effects of "balance billing", i.e., allowing physicians to charge a fee from patients in addition to the fee paid by Medicare. First, we show that on pure efficiency grounds the optimal Medicare fee under balance billing is zero. An active Medicare policy thus can only be justified...

This chapter summarizes the many aspects of public policy for health care. I first consider government policy affecting individual behaviors. Government intervention to change individual actions such as smoking and drinking is frequently justified on externality grounds. External costs of...

A major feature of the health sector is the existence of health insurance, either public or private. Often both coexist in the same country. Public health insurance is often accompanied by public provision of health care. We consider two main areas of public–private interface: in funding of...