Fulltext 388 kbAbstract
In this paper, Emblem studies redistribution by means of public supply of medical treatment. A simple model is constructed in which medical expenditures can increase the earning ability of individuals who are ill. The benefit per euro of medical spending increases with productivity, hence the government can use different levels of treatment combined with different charges to separate high- from low-ability individuals. It is assumed that individuals differ in abilities (productivity), but face the same probability of falling ill. In the optimal separating scheme, high-ability individuals are offered complete treatment against a high payment while low-ability individuals are offered partial treatment against a low payment. Indeed, the level of treatment offered low-ability individuals is distorted downwards.
ISBN 82-7756-085-0