The Tax Implications of Cost Shifting in Cost-Benefit Analysis in Mental Health

Applied Economics, Volume 35, 2003 - Issue 8

Posted: 7 Nov 2018

Date Written: 2003

Abstract

This paper examines the tax implications of systems of care for psychiatric patients that rely more on the provision of services in the community rather than in state hospitals. State governments pay the costs of patient care in state hospitals, but share costs with the federal government (via Medicaid) for community based care. Taxes create distortions as gauged by the marginal cost of public funds (MCF). Since state and federal governments use different tax mixes, one needs a MCF for each form of government to evaluate system changes. Separate estimates of the MCF for each state in the USA are derived. Only for Alaska is cost shifting welfare improving.  

Suggested Citation

Brent, Robert J, The Tax Implications of Cost Shifting in Cost-Benefit Analysis in Mental Health (2003). Applied Economics, Volume 35, 2003 - Issue 8, Available at SSRN: https://ssrn.com/abstract=3279664

Robert J Brent (Contact Author)

Fordham University ( email )

Department of Economics
441 E Fordham Road
Bronx, NY 10458
United States
718 817 4058 (Phone)

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