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Strategic sorting: the role of ordeals in health care

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  • Zeckhauser, Richard

Abstract

Ordeals are burdens placed on individuals that yield no benefits to others; hence they represent a dead-weight loss. Ordeals – the most common is waiting time – play a prominent role in rationing health care. The recipients most willing to bear them are those receiving the greatest benefit from scarce health-care resources. Health care is heavily subsidized; hence, moral hazard leads to excess use. Ordeals are intended to discourage expenditures yielding little benefit while simultaneously avoiding the undesired consequences of rationing methods such as quotas or pricing. This analysis diagnoses the economic underpinnings of ordeals. Subsidies for nursing-home care versus home care illustrate.

Suggested Citation

  • Zeckhauser, Richard, 2021. "Strategic sorting: the role of ordeals in health care," Economics and Philosophy, Cambridge University Press, vol. 37(1), pages 64-81, March.
    • Handle: RePEc:cup:ecnphi:v:37:y:2021:i:1:p:64-81_6
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    Cited by:

    1. Joan Costa-i-Font & Nilesh Raut, 2021. "Long-Term Care Partnership Effects on Medicaid and Private Insurance," CESifo Working Paper Series 9335, CESifo.
    2. Piotr Dworczak, 2022. "Equity-efficiency trade-off in quasi-linear environments," GRAPE Working Papers 70, GRAPE Group for Research in Applied Economics.
    3. Frank Yang, 2021. "Costly Multidimensional Screening," Papers 2109.00487, arXiv.org, revised Aug 2022.
    4. Madsen, Jonas Krogh & Mikkelsen, Kim Sass & Moynihan, Donald, 2020. "Burdens, Sludge, Ordeals, Red Tape, Oh My! A User’s Guide to the Study of Frictions," SocArXiv qfykb, Center for Open Science.

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    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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