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On the characteristics of a mixed system of provision of a private good. An application to health care

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  • Simona GRASSI

Abstract

We characterise the conditions for the existence of a mixed system of finance and provision of health-care by a social planner and a private market coexists. Private insurance/provision and public health-care provision cannot be consumed together, each individual has a certain probability of being sick or healthy, they have different incomes and the richer they are, the more health-care services they are willing to buy. Everybody contributes through a general linear income taxation to the finance of the public provision of health-care. Implicitly income is not observable by the social planner. The selection of users is endogenous. The quantity of health-care service supplied by the public sector suffers from congestion. We derive the conditions for existence of a mixed system and we characterise the impact of an increase or decrease of resources directed to the public system.

Suggested Citation

  • Simona GRASSI, 2006. "On the characteristics of a mixed system of provision of a private good. An application to health care," Departmental Working Papers 2006-014, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2006-014
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    More about this item

    Keywords

    Public provision of private goods; health care;

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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