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Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International

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Working Paper

Publication Date



Boston University School of Law




The U.S. Medicare program reimburses only for discrete treatments of individuals with infections, but fails to pay for infection control or antibiotic stewardship more generally. By focusing solely on discrete hospitals and patients, Medicare ignores the larger epidemiological reality - that hospitals, nursing homes and other institutions operate within a germ shed. Under current Medicare rules, institutions that invest in infection control or antibiotic stewardship, may actually lose money and benefit rival firms in the market. In effect, current Medicare rules subsidize MRSA pollution. Worse yet, Medicare rules block potentially efficient Coasian contracts to promote private coordination within germ sheds.

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