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Ramsey waits: Allocating public health service resources when there is rationing by waiting

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  • Gravelle, Hugh
  • Siciliani, Luigi

Abstract

The optimal allocation of a public health care budget across treatments must take account of the way in which care is rationed within treatments since this will affect their marginal value. We investigate the optimal allocation rules for public health care systems where user charges are fixed and care is rationed by waiting. The optimal waiting time is higher for treatments with demands more elastic to waiting time, higher costs, lower charges, smaller marginal welfare loss from waiting by treated patients, and smaller marginal welfare losses from under-consumption of care. The results hold for a wide range of welfarist and non-welfarist objective functions and for systems in which there is also a private health care sector. They imply that allocation rules based purely on cost effectiveness ratios are suboptimal because they assume that there is no rationing within treatments.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 27 (2008)
Issue (Month): 5 (September)
Pages: 1143-1154

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Handle: RePEc:eee:jhecon:v:27:y:2008:i:5:p:1143-1154

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Web page: http://www.elsevier.com/locate/inca/505560

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References

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Citations

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Cited by:
  1. Gravelle, Hugh & Siciliani, Luigi, 2008. "Optimal quality, waits and charges in health insurance," Journal of Health Economics, Elsevier, vol. 27(3), pages 663-674, May.
  2. Hugh Gravelle & Luigi Siciliani, 2007. "Third degree waiting time discrimination: optimal allocation of a public sector health care treatment under rationing by waiting," Discussion Papers 07/22, Department of Economics, University of York.
  3. Laudicella, M.; & Siciliani, L.; & Cookson, R.;, 2010. "Waiting Times and Socioeconomic Status: Evidence from England," Health, Econometrics and Data Group (HEDG) Working Papers 10/05, HEDG, c/o Department of Economics, University of York.
  4. Silviya Nikolova; & Arthur Sinko; & Matt Sutton;, 2012. "Do maximum waiting times guarantees change clinical priorities? A Conditional Density Estimation approach," Health, Econometrics and Data Group (HEDG) Working Papers 12/07, HEDG, c/o Department of Economics, University of York.
  5. Grassi, Simona & Ma, Ching-to Albert, 2011. "Optimal public rationing and price response," Journal of Health Economics, Elsevier, vol. 30(6), pages 1197-1206.
  6. Januleviciute, Jurgita & Askildsen, Jan Erik & Holmås, Tor Helge & Kaarbøe, Oddvar & Sutton, Matt, 2010. "The Impact of Different Prioritisation Policies on Waiting Times: A Comparative Analysis of Norway and Scotland," Working Papers in Economics 07/10, University of Bergen, Department of Economics.

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