Has Cost Containment Gone Too Far?

Victor Fuchs

No 1776, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Current cost containment strategies will undoubtedly result in fewer health services for patients. The analytical framework presented in this paper shows how the effects of reductions in services on health and social welfare depend upon the amount and distribution of services(relative to potential benefit) prior to cost containment and on the size and selectivity of the reductions. Disagreement over whether cost containment has gone too far arises from disagreements about the criterion (health or social welfare), the prior distribution, and how selective the reductions will be. In the long run selectivity will be the key to successful cost containment.

Date: 1985-12
Note: EH
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Published as Victor R. Fuchs, 1986. "Has Cost Containment Gone Too Far?," The Milbank Quarterly, vol 64(3).

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