Even a cursory reading of the various proposals suggests that in many cases the proponents hope to advance changes in the structure and the organization of the medical care delivery system. Many of these structural changes are, in part, defended on grounds of efficiency, and, therefore, have implications for the price of medical care services, for total expenditures on medical care, and for the distribution of these expenditures as between different kinds of medical care services, for example, in-hospital and out-of-hospital care. It is difficult to determine the likelihood of implementation of the various changes and even more difficult to assess their possible impact on the efficiency and economy of the system over a defined time period. For this and other reasons, it is also difficult to project their impact on prices. But if it is difficult to project the impact on prices, it becomes difficult to determine the total cost of the program and the distribution of costs of the various services. Yet, that determination would be required in order to assess the tax burden on families and to compare that tax burden with the income of the individual families in order to achieve a detailed understanding of the progressivity or regressivity of the tax payment mechanism and of the overall tax system.
Nor would the analytical difficulties disappear, even if expenditures under a national health insurance program were controlled to equal the revenues derived exist or that there would be co-payments and deductibles involving additional expenditure by individuals, we would have to analyze the totality of medicals care expenses by family including both public tax payments and private expenditures in order to arrive at a complete understanding. Only if our perspective is very limited should we be interested in the tax burden alone, In any broad perspectives, we must be interested in the total of public and private expenditures and in their mix.
Once the private market and private dollars are introduced, our difficulties are magnified. The problem extends beyond measuring the relationship between the total of public and private expenditures and the percent of income going to medicals care for various income groups. If we assume successive prices increases over time-out an unreasonable assumption even if the systems envisioned in the various plans that call for structural change brought a one-time saving due to efficiency –then we would have to answer a number of questions concerning prices impact ( particularly on private expenditures ) and the distributional effects that would follow.
Price increases, to be sure , would affect both public and private expenditures. It is likely, however, that the impact would be different since different rates of increase are likely to prevail in the two sectors. One can easily envision a situation in which private prices moved up more rapidly than public as a quasi blackmarket developed. Alternatively, under some of the programs, one could imagine private sector expenditures remaining relatively stable with stable deductibles while the increase in prices affected the number of public dollars required. In either event the proportion that private or public expenditure are of totals costs would change, and with the change the incidence of health expenditures would shift. Furthermore, prices for various services are likely to exhibit different rated of increase ; for example, hospital prices might move up more rapidly than drug prices, long-term care at a different rate than hospital care, psychiatric care at a different rate than other care, surgery at s different rate than physician visits. All of these differences in rate of inflation would also after the distributional impact. They would affect public and private expenditures differently, as different medical procedures would have less or more coverage. They would affect different families differently depending on the families’ age-sex distribution and on medical conditions. Prices might also exhibit different rates of increase for different socioeconomic groups as a function of place of residence ( region and degree of urbanization ) , of income, of educate, and so forth. All of this reminds us that the burden of private costs as a proportion of total costs might change significantly over time for different groups.
