ABSTRACT
This chapter examines the role that health insurance, especially the government programs Medicare and Medicaid, might play in controlling antibiotic resistance. The central problem with antibiotic use by one patient is that it may have a negative externality—the spread of a resistant infection to other patients. If, however, those patients are part of the same health insurance pool, the health insurance company will “internalize” those effects and therefore have an incentive to promote the socially optimal level of antibiotic use.
