Public Liabilities and Health Care Policy

Kristopher Hult and Tomas Philipson

No 18571, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many countries have large future public liabilities attributable to health care programs. However, little explicit analysis exists about how health care policies affect these program liabilities. We analyze how reimbursement and approval policies affect public liabilities through their impact on the returns to medical innovation, a central factor driving spending growth. We consider how policies impact innovative returns through expected earnings, their risk-adjustment, and their timing and defaults through the approval process. Our analysis implies that cutbacks in government programs may raise government liabilities and expansions may lower them. We quantitatively calibrate these non-standard effects for the US Medicare program.

JEL-codes: I1 I11 I13 I18 (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-hea
Note: EH
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