Public Provision and Cross-Border Health Care

Area of Science:

• Public economics
• Health economics
• Welfare economics

Background:

• Optimal public health care provision is a key policy concern.
• Understanding the impact of cross-border healthcare access on policy is crucial.
• The interplay between health, labor supply, and income redistribution requires examination.

Purpose of the Study:

• To analyze the optimal public provision of healthcare considering cross-border treatment options.
• To investigate government incentives for over-providing healthcare to specific income groups.
• To determine the role of redistribution in healthcare policy.

Main Methods:

• Theoretical modeling of public healthcare provision.
• Analysis of individual health and labor supply decisions.
• Examination of redistribution mechanisms within healthcare policy.

Main Results:

• Governments have an incentive to over-provide healthcare to low-income individuals relative to the first-best solution.
• Cross-border healthcare access shifts the incentive for over-provision primarily towards redistribution.
• High-ability individuals, by mimicking low-ability individuals, benefit less from healthcare when health and labor supply are complements.

Conclusions:

• Healthcare policy design must account for cross-border treatment possibilities.
• Over-provision of healthcare can serve as a tool for income redistribution.
• Policy constraints, such as inability to discriminate by income, influence healthcare provision levels.