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Strategic Sorting: The Role of Ordeals in Health Care

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  • Zeckhauser, Richard

    (Harvard Kennedy School)

Abstract

Ordeals are burdens placed on individuals that yield no direct benefits to others. They represent a dead-weight loss. Ordeals--the most common being waiting time--play a prominent role in health care. Their goal is to direct scarce resources to recipients receiving greater value from them, hence presumed to be more willing to bear an ordeal’s burden. Ordeals are intended to prevent wasteful expenditures given that health care is heavily subsidized, yet avoid other forms of rationing, such as quotas or pricing. This analysis diagnoses the economic underpinnings of ordeals. Subsidies to nursing home versus home care illustrate.

Suggested Citation

  • Zeckhauser, Richard, 2019. "Strategic Sorting: The Role of Ordeals in Health Care," Working Paper Series rwp19-023, Harvard University, John F. Kennedy School of Government.
    • Handle: RePEc:ecl:harjfk:rwp19-023
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    References listed on IDEAS

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    1. John W. Pratt & David A. Wise & Richard Zeckhauser, 1979. "Price Differences in almost Competitive Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(2), pages 189-211.
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    Cited by:

    1. Piotr Dworczak, 2022. "Equity-efficiency trade-off in quasi-linear environments," GRAPE Working Papers 70, GRAPE Group for Research in Applied Economics.
    2. Frank Yang, 2021. "Costly Multidimensional Screening," Papers 2109.00487, arXiv.org, revised Aug 2022.
    3. Madsen, Jonas Krogh & Mikkelsen, Kim Sass & Moynihan, Donald, 2020. "Burdens, Sludge, Ordeals, Red Tape, Oh My! A User’s Guide to the Study of Frictions," SocArXiv qfykb, Center for Open Science.
    4. Joan Costa-i-Font & Nilesh Raut, 2021. "Long-Term Care Partnership Effects on Medicaid and Private Insurance," CESifo Working Paper Series 9335, CESifo.

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    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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