Has Cost Containment Gone Too Far?

16 Pages Posted: 20 May 2004 Last revised: 6 Sep 2008

See all articles by Victor R. Fuchs

Victor R. Fuchs

National Bureau of Economic Research (NBER)

Date Written: December 1985

Abstract

Current cost containment strategies will undoubtedly result in fewer health services for patients. The analytical framework presented in this paper shows how the effects of reductions in services on health and social welfare depend upon the amount and distribution of services(relative to potential benefit) prior to cost containment and on the size and selectivity of the reductions. Disagreement over whether cost containment has gone too far arises from disagreements about the criterion (health or social welfare), the prior distribution, and how selective the reductions will be. In the long run selectivity will be the key to successful cost containment.

Suggested Citation

Fuchs, Victor R., Has Cost Containment Gone Too Far? (December 1985). NBER Working Paper No. w1776. Available at SSRN: https://ssrn.com/abstract=338825

Victor R. Fuchs (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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