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  3. Journal of Economic Perspectives
  4. Summer 1994
  5. A Skeptic's View of Global Budget Caps

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

A Skeptic's View of Global Budget Caps

  • James M. Poterba
Journal of Economic Perspectives
vol. 8, no. 3, Summer 1994
(pp. 67–74)
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Abstract

This brief paper explores the likely effects of government-imposed global budget caps, such as those in the Clinton administration proposal, on health care spending. It argues that health reform proposals that guarantee universal access to a basic package of medical benefits create a substantial new constituency for higher health care outlays. Political and potential legal pressures to expand rather than limit the set of guaranteed benefits, coupled with an expansion of the number of individuals with health insurance coverage, make it unlikely that global budget targets will succeed in reducing the rate of health care spending growth.

Citation

Poterba, James M. 1994. "A Skeptic's View of Global Budget Caps." Journal of Economic Perspectives, 8 (3): 67–74. DOI: 10.1257/jep.8.3.67

JEL Classification

  • I18 Health: Government Policy; Regulation; Public Health
  • I11 Analysis of Health Care Markets
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