Path dependence, efficiency, and American health care policy

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2007-08

Authors

Choi, Hyono

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Abstract

This study examines the path dependency of American health care system. The study incorporates historical approach and general theory. The model of path dependence is specified as a process in which the outcome shows inefficiency and the inefficiency is verified by the existence of efficient alternative. The path dependence model is applied to the history of the employer-provided health insurance from the late nineteenth century to the 1990s. The result shows that employer-provided private health insurance is not a path-dependent process. It was relatively efficient and rational choices by employers and there appeared no efficient alternatives to the private insurance. Hence, the existing argument that the absence of national health insurance in America is caused by the path dependence of the private health insurance needs to be corrected.

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