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Submitted by Shanta on

Rob: From the graph in the post you can see that, if the Indian government took the amount it currently spends on hospitals and gave it out equally to all citizens (i.e., without any targeting), it would be a more equitable distribution than the current one. That was what I meant by "giving cash...has a better chance of public resources' going to whom they were intended." On your second point about information asymmetry, Arrow's original paper and the literature since then has shown that government should regulate health, and more specifically, health insurance markets. It doesn't necessarily follow that government should finance all of health care. There may be a case for government to be the single purchaser on cost-efficiency grounds, but even here, it doesn't follow that government should turn around and provide the health services for free to everybody, including the rich. Shanta