June 20, 2014

Health financing on the right track

The Changing Role of Government in Financing Health Care:An International Perspective

If you are looking for a paper that reflects all the issues sorrounding health care finance, you are in luck. A recent article in JEP covers the topics to understand what's going on in developed countries. For example,  I found this statement of interest with regard to our current situation:
The relative efficiency of different types of taxes used to finance health systems has been explored in the public finance and health economics literature. The equity and efficiency properties of general taxation (c.f. Auerbach1985) do not differ depending on whether the money is spent on health or education per se, although, if the level of government that collects revenue differs from the level of government that provides health coverage, there may be equity issues and issues about whether the level of taxation best meets local demand for the services required (c.f. Ahmad and Brosio 2006). Of course, the amount of deadweight loss associated with any revenue generation will depend on the balance and type of taxes  used to raise the revenue.
There are huge equity issues to address in our current system, and have to be corrected very soon. I hope we are on the right track and this is going to be solved in forthcoming months.