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Rationing the Public Provision of Health Care in the Presence of Private Supplements: Evidence from the Italian NHS

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Author Info
Daniele Fabbri
Chiara Monfardini

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Abstract

In this paper we assess the relative effectiveness of user charges and administrative waiting times as a tool for rationing public healthcare in Italy. We measure demand elasticities by estimating a simultaneous equation model of GP primary care visits, public specialist consultations and private specialist consultations, as if they were part of an incomplete system of demand. We find that own price elasticity of the demand for public specialist consultation is about -0.3, while administrative waiting time plays a less important role. No substitution exists between the demand for public and private specialists, so that user charges act as a net deterrent for over-consumption. The public provision of healthcare does not induce the wealthy to opt out. Moreover our evidence suggests that user charges and waiting lists do not serve redistributive purposes.

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Paper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 06/14.

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Date of creation: Nov 2006
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Handle: RePEc:yor:hectdg:06/14

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Keywords: healthcare demand elasticities; user charges; waiting lists; multivariate count data model;

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Find related papers by JEL classification:
C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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    Other versions:
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    Other versions:
  17. Windmeijer, F A G & Silva, J M C Santos, 1997. "Endogeneity in Count Data Models: An Application to Demand for Health Care," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 281-94, May-June. [Downloadable!]
    Other versions:
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    Other versions:
  19. Besley, Timothy, 1991. " Welfare Improving User Charges for Publicly Provided Private Goods," Scandinavian Journal of Economics, Blackwell Publishing, vol. 93(4), pages 495-510.
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    Other versions:
  23. Hausman, Jerry A, 1981. "Exact Consumer's Surplus and Deadweight Loss," American Economic Review, American Economic Association, vol. 71(4), pages 662-76, September. [Downloadable!] (restricted)
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