Medical care represents a significant portion of society's response to problems affecting social welfare. While the problems surrounding medical care are complex, a major part of these problems can be attributed to the fact that medical care expenditures are viewed indiscriminately without regard for the nature of the expenditures themselves. This paper presents a framework to differentiate various types of medical care expenditures. The paper argues that medical care expenditures can be classified as either instrumental-consummatory or as external-internal relative to the medical care system. The consequences of this classification and some conclusions which may be drawn from it are explicated in the paper.

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