Uncompensated Care and the Collapse of Hospital Payment Regulation: An Illustration of the Tinbergen Rule
Hospital payment regulation has historically been introduced to meet multiple policy objectives. The primary objective of "all-payer" rate setting regimes was to control costs through consistent, centrally regulated payments. These regimes were often linked, however, to an ancillary goal of financing care for the uninsured. We show that this secondary objective made states' all-payer regimes economically and legally unstable. Their economic instability reflected a feedback loop from surcharge rates to insurance coverage rates and back to the quantities of uncompensated care in need of being financed. The erosion of all-payer regimes' surcharge bases was particularly pronounced when health maintenance organizations were exempted from surcharge collections, creating a regulatory arbitrage opportunity. The economic and legal instability we highlight could largely have been avoided by financing the cost of uncompensated care provision through taxation of income or other standard revenue bases. These developments thus illustrate the wisdom of the Tinbergen Rule, which recommends that independent policy objectives be met with independent policy instruments.
|Date of creation:||Aug 2017|
|Note:||HC HE LE PE|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas Buchmueller & John Dinardo, 2002.
"Did Community Rating Induce an Adverse Selection Death Spiral? Evidence from New York, Pennsylvania, and Connecticut,"
American Economic Review,
American Economic Association, vol. 92(1), pages 280-294, March.
- Thomas Buchmueller & John DiNardo, 1999. "Did Community Rating Induce an Adverse Selection Death Spiral? Evidencefrom New York, Pennsylvania and Connecticut," NBER Working Papers 6872, National Bureau of Economic Research, Inc.
- Jeffrey Clemens, 2015.
"Regulatory Redistribution in the Market for Health Insurance,"
American Economic Journal: Applied Economics,
American Economic Association, vol. 7(2), pages 109-134, April.
- Jeffrey Clemens, 2012. "Regulatory Redistribution in the Market for Health Insurance," Discussion Papers 11-011, Stanford Institute for Economic Policy Research.
- Jeffrey Clemens, 2014. "Regulatory Redistribution in the Market for Health Insurance," NBER Working Papers 19904, National Bureau of Economic Research, Inc.
- Gaskin, Darrell J., 1997. "Altruism or moral hazard: The impact of hospital uncompensated care pools," Journal of Health Economics, Elsevier, vol. 16(4), pages 397-416, August.
- Aaron S. Yelowitz, 1995.
"The Medicaid Notch, Labor Supply, and Welfare Participation: Evidence from Eligibility Expansions,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 110(4), pages 909-939.
- A. S. Yelowitz, "undated". "The Medicaid notch, labor supply, and welfare participation: Evidence from eligibility expansions," Institute for Research on Poverty Discussion Papers 1084-96, University of Wisconsin Institute for Research on Poverty.
- Aaron Yelowitz, 1995. "The Medicaid Notch, Labor Supply and Welfare Participation: Evidence from Eligibility Expansions," UCLA Economics Working Papers 738, UCLA Department of Economics.
- repec:aea:aejpol:v:9:y:2017:i:2:p:28-56 is not listed on IDEAS
- Abe Dunn & Adam Hale Shapiro, 2011. "Physician Market Power and Medical-Care Expenditures," BEA Working Papers 0078, Bureau of Economic Analysis.
- Abe Dunn & Adam Hale Shapiro, 2012. "Physician Market Power and Medical-Care Expenditures," BEA Working Papers 0084, Bureau of Economic Analysis.
- Emmanuel Saez, 2001. "Using Elasticities to Derive Optimal Income Tax Rates," Review of Economic Studies, Oxford University Press, vol. 68(1), pages 205-229.
- Emmanuel Saez, 2000. "Using Elasticities to Derive Optimal Income Tax Rates," NBER Working Papers 7628, National Bureau of Economic Research, Inc.
- Jeffrey Clemens & Joshua D. Gottlieb & Tímea Laura Molnár, 2015. "The Anatomy of Physician Payments: Contracting Subject to Complexity," NBER Working Papers 21642, National Bureau of Economic Research, Inc. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:23758. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.