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Public Liabilities and Health Care Policy

Author

Listed:
  • Kristopher J. Hult
  • Tomas J. Philipson
Abstract
Many countries have large future public liabilities attributable to health care programs. However, little explicit analysis exists about how health care policies affect these program liabilities. We analyze how reimbursement and approval policies affect public liabilities through their impact on the returns to medical innovation, a central factor driving spending growth. We consider how policies impact innovative returns through expected earnings, their risk-adjustment, and their timing and defaults through the approval process. Our analysis implies that cutbacks in government programs may raise government liabilities and expansions may lower them. We quantitatively calibrate these non-standard effects for the US Medicare program.

Suggested Citation

  • Kristopher J. Hult & Tomas J. Philipson, 2012. "Public Liabilities and Health Care Policy," NBER Working Papers 18571, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18571
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    References listed on IDEAS

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    Cited by:

    1. Ralph S. J. Koijen & Tomas J. Philipson & Harald Uhlig, 2016. "Financial Health Economics," Econometrica, Econometric Society, vol. 84, pages 195-242, January.
    2. Gao, Pengjie & Lee, Chang & Murphy, Dermot, 2022. "Good for your fiscal health? The effect of the affordable care act on healthcare borrowing costs," Journal of Financial Economics, Elsevier, vol. 145(2), pages 464-488.

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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