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On the characteristics of a mixed system of provision of a private good. An application to health care

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  • Simona GRASSI

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Abstract

We characterise the conditions for the existence of a mixed system of finance and provision of health-care by a social planner and a private market coexists. Private insurance/provision and public health-care provision cannot be consumed together, each individual has a certain probability of being sick or healthy, they have different incomes and the richer they are, the more health-care services they are willing to buy. Everybody contributes through a general linear income taxation to the finance of the public provision of health-care. Implicitly income is not observable by the social planner. The selection of users is endogenous. The quantity of health-care service supplied by the public sector suffers from congestion. We derive the conditions for existence of a mixed system and we characterise the impact of an increase or decrease of resources directed to the public system.

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Paper provided by Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano in its series Departmental Working Papers with number 2006-14.

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Date of creation: 15 Apr 2006
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Handle: RePEc:mil:wpdepa:2006-14

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Keywords: Public provision of private goods; health care;

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