This paper examines the efficiency and equity implications of alternative health care system financing strategies. Using data across the OECD, I find that almost all financing choices are compatible with efficiency in the delivery of health care, and that there has been no consistent and systematic relationship between financing and cost containment. Using data on expenditures and life expectancy by income quintile from the Canadian health care system, I find that universal, publicly-funded health insurance is modestly redistributive. Putting $1 of tax funds into the public health insurance system effectively channels between $0.23 and $0.26 toward the lowest income quintile people, and about $0.50 to the bottom two income quintiles. Finally, a review of the literature across the OECD suggests that the progressivity of financing of the health insurance system has limited implications for overall income inequality, particularly over time.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
13881.
Length: Date of creation: Mar 2008 Date of revision: Handle: RePEc:nbr:nberwo:13881
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Find related papers by JEL classification: H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
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