Deciding how to choose the healthcare system

Abstract

The continuing debate in the United States over the form of health care provision is illustrative as to how difficult that choice can be. The choice is further complicated by political activity-lobbyists with a vested interest in various formats-and a noticeable effect from path dependence-people are used to what they have and are afraid of change, and some groups actually stand to lose from change, at least in the short run. What might the decision have been in the absence of these effects? This chapter creates a model to explore this question. In particular, we appeal to insights from Buchanan and Tullock (1962), Rawls (1971) and Kornai and Eggleston (2001) to ask what type of health care provision would a polity choose from behind the veil of ignorance, and what type of mechanism-unanimity (constitutional) or majority (legislative) would they prefer to use to select it?