Your suggestion is one possible policy. Another possible policy is to allow ANY provider to refuse service to any subsidized customer, on the reasoning that the refusal of the provider to provide service is essentially a statement that that provider cannot help that customer. If some category of customers appear to be unattractive to most providers, but there is a positive externality from providing service to those customers, increase the subsidies for customers in that category until you reach an equilibrium price at which some providers are willing to meet those customers' needs.
I fear that creates an incentive to game the system. "This person is dislexic so we get the dislexic bonus", but they're really not, but parents work to get their child labeled as such so they can get into the top schools, and the top schools take this "not really dislexic" child, which they can interview or test to ensure they're perfectly capable students.
I think this would actually be a case where the stick works better. A school can't reject anybody. And if a student leaves your school with a complaint about service you are severely punished. Maybe funding cut by a percentage of the size of the student body per complaint.
Comments
Your suggestion is one possible policy. Another possible policy is to allow ANY provider to refuse service to any subsidized customer, on the reasoning that the refusal of the provider to provide service is essentially a statement that that provider cannot help that customer. If some category of customers appear to be unattractive to most providers, but there is a positive externality from providing service to those customers, increase the subsidies for customers in that category until you reach an equilibrium price at which some providers are willing to meet those customers' needs.
I fear that creates an incentive to game the system. "This person is dislexic so we get the dislexic bonus", but they're really not, but parents work to get their child labeled as such so they can get into the top schools, and the top schools take this "not really dislexic" child, which they can interview or test to ensure they're perfectly capable students.
I think this would actually be a case where the stick works better. A school can't reject anybody. And if a student leaves your school with a complaint about service you are severely punished. Maybe funding cut by a percentage of the size of the student body per complaint.