Strategic sorting: the role of ordeals in health care

Abstract

Ordeals are burdens placed on individuals that yield no benefits to others; hence they represent a dead-weight loss. Ordeals – the most common is waiting time – play a prominent role in rationing health care. The recipients most willing to bear them are those receiving the greatest benefit from scarce health-care resources. Health care is heavily subsidized; hence, moral hazard leads to excess use. Ordeals are intended to discourage expenditures yielding little benefit while simultaneously avoiding the undesired consequences of rationing methods such as quotas or pricing. This analysis diagnoses the economic underpinnings of ordeals. Subsidies for nursing-home care versus home care illustrate.

The effect of administrative burden on state safety‐net participation: Evidence from food assistance, cash assistance, and Medicaid

“…Finally, the question of whether the burden is justified is largely a normative question “on the legitimacy of burdens and the question of who should shoulder them,” (Madsen, Mikkelsen, & Moynihan (2020, p. 17). For those who believe that limited resources should be “directed to those who will benefit from it the most” (Zeckhauser, 2021, p. 3) more targeted policies with a greater number of burdensome rules may be seen as a means of efficiently allocating resources. However, increasing the complexity of the rule architecture excludes not only the “well‐resourced” but also many potentially‐eligible individuals who may be legally entitled to, and genuinely in need of, program assistance.…”

Health in citizen‐state interactions: How physical and mental health problems shape experiences of administrative burden and reduce take‐up

“…The fact that state-imposed hassles cause frustration and sometimes motivate people to exit out of state encounters might not in itself be a concern. For instance, according to the ordeal mechanism perspective from economics, state-imposed hassles serve to target benefits to those who truly desire and need them (Zeckhauser, 2021). The idea that those most in need of public assistance will also be the ones who are most willing to endure administratively burdensome processes to access benefits is intuitive.…”

Burdens, Sludge, Ordeals, Red tape, Oh My!: A User's Guide to the Study of Frictions

“…Thus, ordeals are intentional, but with a positive social goal. There is little consideration that the principal might be acting from ideological interests, or at odds with the best interests of the population, although Zeckhauser (2019) does acknowledge the possibility of rent-seeking by actors "who enjoy the current arrangements and by the disproportionate influence of entities that are already in place." (2019, p. 26) In the classic red tape literature, politics and the quest for gaining political control and avoiding blame are seen as an important determinant of red tape (e.g.…”