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Achieving a fair geographical distribution of health-care resources

Michel Mougeot and Florence Naegelen

Regional Science and Urban Economics, 2018, vol. 70, issue C, 384-392

Abstract: This paper analyzes the factors determining the physicians’ location decisions when physicians have heterogeneous preferences about the regional amenities in a two-regions health care system. While the first best allocation entails geographic equality in access to and quality of health-care services, we show that free location decisions results in an unfair allocation in health care resources. We first characterize the public policies allowing to decentralize the first best. Then, we show that the optimal policy aiming at equalizing medical densities consists in setting regionally differentiated prices and a single lump-sum transfer. This transfer is a tax (resp. a subsidy) when the value of the difference in regional amenities is low (resp. high).

Keywords: Geographic inequality; Physicians' location; Health-care services; Public policy; Regional amenities (search for similar items in EconPapers)
JEL-codes: R12 I11 I14 I18 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Achieving a fair geographical distribution of health-care resources (2018)
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