Internalizing social value in healthcare: Optimal policy in mixed public-private systems
Yerushalmi, Erez and Ziv, Sani (2025) Internalizing social value in healthcare: Optimal policy in mixed public-private systems. Journal of Policy Modeling. ISSN 0161-8938
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Abstract
This paper examines the interplay between public and private healthcare in a system that internalizes non-marketed social value. We provide new estimates of the healthcare social value and highlight the importance of integrating it into national accounts for effective macroeconomic policy analysis. Traditional metrics often undervalue healthcare by neglecting these externalities, leading to a suboptimal allocation of healthcare services from a societal perspective. While both public and private healthcare generate social value, determining the optimal public-private mix is challenging because they do not necessarily produce the same type of value, and an unregulated mixed system can impose negative fiscal externalities on public provision. To address these issues, we develop a general equilibrium model with dual public-private healthcare services, calibrate the non-marketed social value, and simulate two market liberalization scenarios with optimal Pigouvian tax policies. A key finding with significant policy implications is that healthcare social value accounts for at least 28 % of public healthcare expenditure, or more.
| Item Type: | Article |
|---|---|
| Identification Number: | 10.1016/j.jpolmod.2025.01.007 |
| Dates: | Date Event 10 January 2025 Accepted 4 February 2025 Published Online |
| Uncontrolled Keywords: | Social Value in Healthcare, Computable General Equilibrium, Israel, Public-Private Healthcare Mix, Pigouvian Tax, Regulation and Liberalization |
| Subjects: | CAH15 - social sciences > CAH15-02 - economics > CAH15-02-01 - economics |
| Divisions: | Faculty of Business, Law and Social Sciences > College of Accountancy, Finance and Economics > Centre for Accountancy Finance and Economics |
| Depositing User: | Gemma Tonks |
| Date Deposited: | 26 Feb 2025 18:32 |
| Last Modified: | 26 Feb 2025 18:35 |
| URI: | https://www.open-access.bcu.ac.uk/id/eprint/16183 |
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