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The Economics of Medicare: Equilibrium within the Medical Community

This paper partially fills a theoretical void by developing an integrated model of the various branches of the medical community. A consistent and general framework is adopted to analyze equilibrium within the market for medical services under a stylized form of socialized medicine, without invoking demand shifting. The optimization problem faced by each agent is specified and the equilibrium is defined. The effect of various parameter changes on the market for medical services is analyzed. The predictions are not contradicted by the stylized facts.