Multidimensional screening in a monopolistic insurance market: proofs

For the last 100 years, a health care regulatory project enthusiastically endorsed by generations of health policy experts has been encrusting U.S. health care with layer upon layer of increasingly intrusive regulation. Though each regulation may be innocuous in its own right, taken together they have had the unfortunate effect of divorcing patients from spending on their health, creating explosive growth in Wisconsin’s Medicaid budget, and making Wisconsin’s market for hospital services one of the least competitive in the United States. In hindsight, the regulatory program had had three major achievements. It has excluded consumers from health care decisions, consistently moving the power to make decisions...