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Cross Border Health Care Provision: Who Gains, Who Loses

In: Health Care Provision and Patient Mobility

Author

Listed:
  • Rosella Levaggi

    (University of Brescia)

  • Francesco Menoncin

    (University of Brescia)

Abstract

The diffusion of the welfare state has produced a widespread involvement of the public sector in financing the production of private goods for paternalistic reasons. In this chapter we model the production of health care as a merit impure local public good whose consumption is subsidized and whose access is free, but not unlimited. The impure local public good aspect means that the production of health care spreads its benefits beyond the geographical boundaries of the Region where it is produced. Finally, we include the (optional) provision of an equalization grant that allows reduction of fiscal imbalance among Regions. In this framework we study the possible effects of cross border provision of health care. We assume that information is complete and symmetric and that there is no comparative advantage in local provision. In this context devolution is always sub-optimal for the whole community: the lack of coordination means that the impure public good is under-provided. However, more efficient Regions may be better off because of the impure public good nature of health care.

Suggested Citation

  • Rosella Levaggi & Francesco Menoncin, 2014. "Cross Border Health Care Provision: Who Gains, Who Loses," Developments in Health Economics and Public Policy, in: Rosella Levaggi & Marcello Montefiori (ed.), Health Care Provision and Patient Mobility, edition 127, pages 223-244, Springer.
    • Handle: RePEc:spr:dehchp:978-88-470-5480-6_10
    DOI: 10.1007/978-88-470-5480-6_10
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    More about this item

    Keywords

    Health care provision; Decentralization; Impure public goods; Cross border supply;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H4 - Public Economics - - Publicly Provided Goods

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