Public health care with waiting time: the role of supplementary private health care (original) (raw)
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Private health care as a supplement to a public health system with waiting time for treatment
2009
In this article the authors Michael Hoel and Erik Magnus Sæther consider an economy where most of the health care is publicly provided, and where there is waiting time for several types of treatments. Private health care without waiting time is an option for the patients in the public health queue. This article shows the effects of a tax (positive or negative) on private health care, and derives the socially optimal tax/subsidy. Finally, a discussion of how the size of the tax might affect the political support for a high quality public health system is provided.
Shifting public-health-sector waiting lists to the private sector
European Journal of Political Economy, 2003
I analyze the public health administration's (PbHA's) decisions on waiting lists for public treatments. The PbHA maximizes a utilitarian social welfare function. Patients differ in their waiting costs, which in turn depend on patient's severity. Patients choose between waiting for free treatment in the public sector and paying for immediate treatment in the private sector. I show that (1) the administration's incentives to reduce waiting lists are weakened by the presence of a private sector, and (2) that this effect is reinforced if private treatment fees are regulated, which implies that waiting time is longest in the latter case. D
Pricing and Waiting Time Decisions in a Health Care Market with Private and Public Provision
Journal of Applied Economics, 2019
This paper describes a duopoly market for healthcare where one of the two providers is publicly owned and charges a price of zero, while the other sets a price so as to maximize its profit. Both providers are subject to congestion in the form of an M/M/1 queue, and they serve patient-consumers who have randomly distributed unit costs of time. Consumer demand (as market share) for both providers is obtained and described. The private provider’s pricing decision is explored, equilibrium existence is proven, and conditions for uniqueness presented. Comparative statics for demand are presented. Social welfare functions are described and the welfare maximizing condition obtained. More detailed results are then obtained for cases when costs follow uniform and Kumaraswamy distributions. Numerical simulations are then performed for these distributions, employing several parameter values, demonstrating the private provider’s pricing decision and its relationship with social welfare.
Public health care and private insurance demand: the waiting time as a link
Health care management science, 2000
This paper analyzes the effect of waiting times in the Spanish public health system on the demand for private health insurance. Expected utility maximization determines whether or not individuals buy a private health insurance. The decision depends not only on consumer's covariates such as income, socio-demographic characteristics and health status, but also on the quality of the treatment by the public provider. We interpret waiting time as a qualitative attribute of the health care provision. The empirical analysis uses the Spanish Health Survey of 1993. We cope with the absence of income data by using the Spanish Family Budget Survey of 1990-91 as a complementary data set, following the Arellano-Meghir method [4]. Results indicate that a reduction in the waiting time lowers the probability of buying private health insurance. This suggests the existence of a crowd-out in the health care provision market.
Private care and public waiting
Australian Health Review, 2005
Waiting time for public hospital care is a regular matter for political debate One political response has been to suggest that expanding private sector activity will reduce public waiting times. This paper tests the hypothesis that increased private activity in the health system is associated with reduced waiting times using secondary analysis of hospital activity data for 2001-02.
A Welfare Analysis of Rationing in Health Care Provision
SSRN Electronic Journal, 2016
We study the welfare properties of direct restrictions based on cost-effectiveness and indirect methods represented by waiting lists in a public health care system. Health care is supplied for free by the public health sector, but patients can choose to address their demand elsewhere by stipulating a private health care insurance policy to avoid restrictions. Our model shows that if the individual response to treatment is independent of income and cannot be observed by the patient, the choice of opting out simply depends on income and the redistributive effects of both instruments are quite similar. In general, restrictions may only improve welfare of relatively rich individuals, usually those that opt out of the public health care system. Form a policy point of view, our model casts serious doubts upon the use of these instruments for redistributive purposes.
Rationing in health care provision: a welfare approach
International Journal of Health Economics and Management, 2016
We study the welfare properties of direct restrictions based on cost-effectiveness and indirect methods represented by waiting lists in a public health care system. Health care is supplied for free by the public health sector, but patients can choose to address their demand elsewhere by stipulating a private health care insurance policy to avoid restrictions. Our model shows that if the individual response to treatment is independent of income and cannot be observed by the patient, the choice of opting out simply depends on income, and the redistributive effects of both instruments are quite similar. In general, restrictions may only improve welfare of relatively rich individuals, usually those that opt out of the public health care system. From a policy point of view, our model casts serious doubts upon the use of these instruments for redistributive purposes.
2011
Cost sharing represents a well-established tool for the control of health care demand in many Oecd countries. However, it is used with caution and in combination with other instruments in order to avoid potential negative impacts on access to essential health care services. Waiting lists and waiting times represent an alternative (and implicit) way to control demand in public health care systems, even though in terms of welfare rationing by waiting may be an inferior solution to cost sharing. This paper focuses on the use of waiting times, cost sharing, and other tools (in particular, priority and appropriateness criteria) in order to control demand for a public outpatient health service in presence of a fully paid out-of-pocket private alternative. We develop an agent-based model where heterogeneous agents maximise their individual utility based on income and health status. On this basis, we develop some computational experiments based on micro-simulations to offer some useful insights for health care policy. In particular, we show that: i) the presence of a private alternative to a public treatment can improve social welfare and health equity in a NHS, when public supply is constrained by a fixed budget and longer waiting times than the private one; ii) using prioritisation of waiting lists without any copayment to control the demand for public treatment may produce high performances in terms of social welfare, health equality and policy efficiency; iii) applying a moderate copayment rate as a tool to control public demand could determine the same policy efficiency of using only priority lists, if the copayment revenues are used to fund the public provision.
Cost sharing represents a well-established tool for the control of health care demand in many Oecd countries. However, it is used with caution and in combination with other instruments in order to avoid potential negative impacts on access to essential health care services. Waiting lists and waiting times represent an alternative (and implicit) way to control demand in public health care systems, even though in terms of welfare rationing by waiting may be an inferior solution to cost sharing. This paper focuses on the use of waiting times, cost sharing, and other tools (in particular, priority and appropriateness criteria) in order to control demand for a public outpatient health service in presence of a fully paid out-of-pocket private alternative. We develop an agent-based model where heterogeneous agents maximise their individual utility based on income and health status. On this basis, we develop some computational experiments based on micro-simulations to offer some useful insights for health care policy. In particular, we show that: i) the presence of a private alternative to a public treatment can improve social welfare and health equity in a NHS, when public supply is constrained by a fixed budget and longer waiting times than the private one; ii) using prioritisation of waiting lists without any copayment to control the demand for public treatment may produce high performances in terms of social welfare, health equality and policy efficiency; iii) applying a moderate copayment rate as a tool to control public demand could determine the same policy efficiency of using only priority lists, if the copayment revenues are used to fund the public provision.