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Is Waiting-time Prioritisation Welfare Improving?

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Author Info
Hugh Gravelle
Luigi Siciliani

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Abstract

Rationing by waiting time is commonly used in health care systems with zero or low money prices. Some systems prioritise particular types of patient and offer them lower waiting times. We investigate whether prioritisation is welfare improving when the benefit from treatment is the sum of two components, one of which is not observed by providers. We show that positive prioritisation (shorter waits for patients with higher observable benefit) is welfare improving if the mean observable benefit of the patients who are indifferent about receiving the treat- ment is larger than the mean observable benefit of the patients who receive the treatment. This is true (a) if the distribution of the un- observable benefit is uniform for any distribution of the observable benefit; or (b) if the distribution of the observable benefit is uniform and the distribution of the unobservable benefit is log-concave. We also show that prioritisation is never welfare increasing if and only if the distribution of unobservable benefit is negative exponential.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 06/13.

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Date of creation: Aug 2006
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Handle: RePEc:yor:yorken:06/13

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Related research
Keywords: Waiting times; prioritisation; rationing;

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Find related papers by JEL classification:
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gravelle, Hugh & Dusheiko, Mark & Sutton, Matthew, 2002. "The demand for elective surgery in a public system: time and money prices in the UK National Health Service," Journal of Health Economics, Elsevier, vol. 21(3), pages 423-449, May. [Downloadable!] (restricted)
  2. Smith, Peter C., 2005. "User charges and priority setting in health care: balancing equity and efficiency," Journal of Health Economics, Elsevier, vol. 24(5), pages 1018-1029, September. [Downloadable!] (restricted)
  3. Hoel, Michael & Saether, Erik Magnus, 2003. "Public health care with waiting time: the role of supplementary private health care," Journal of Health Economics, Elsevier, vol. 22(4), pages 599-616, July. [Downloadable!] (restricted)
  4. Luigi Siciliani & Jeremy Hurst, 2003. "Explaining Waiting Times Variations for Elective Surgery Across OECD Countries," OECD Health Working Papers 7, OECD, Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  5. Pedro Pita Barros & Pau Olivella, 2005. "Waiting Lists and Patient Selection," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 14(3), pages 623-646, 09. [Downloadable!] (restricted)
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  6. Sam Bucovetsky, 1984. "On the Use of Distributional Waits," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 699-717, November. [Downloadable!] (restricted)
  7. Jeremy Hurst & Luigi Siciliani, 2003. "Tackling Excessive Waiting Times for Elective Surgery: A Comparison of Policies in Twelve OECD Countries," OECD Health Working Papers 6, OECD, Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  8. Martin, Stephen & Smith, Peter C., 1999. "Rationing by waiting lists: an empirical investigation," Journal of Public Economics, Elsevier, vol. 71(1), pages 141-164, January. [Downloadable!] (restricted)
  9. Iversen, Tor, 1997. "The effect of a private sector on the waiting time in a national health service," Journal of Health Economics, Elsevier, vol. 16(4), pages 381-396, August. [Downloadable!] (restricted)
  10. Luigi Siciliani, 2005. "Does more choice reduce waiting times?," Health Economics, John Wiley & Sons, Ltd., vol. 14(1), pages 17-23. [Downloadable!]
  11. Olivella, Pau, 2003. "Shifting public-health-sector waiting lists to the private sector," European Journal of Political Economy, Elsevier, vol. 19(1), pages 103-132, March. [Downloadable!] (restricted)
  12. Loewenstein, George & Prelec, Drazen, 1992. "Anomalies in Intertemporal Choice: Evidence and an Interpretation," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 573-97, May. [Downloadable!] (restricted)
  13. Cullis, John G. & Jones, Philip R. & Propper, Carol, 2000. "Waiting lists and medical treatment: Analysis and policies," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 23, pages 1201-1249 Elsevier. [Downloadable!] (restricted)
  14. Lindsay, Cotton M & Feigenbaum, Bernard, 1984. "Rationing by Waiting Lists," American Economic Review, American Economic Association, vol. 74(3), pages 404-17, June. [Downloadable!] (restricted)
  15. Hugh Gravelle & Luigi Siciliani, 2007. "Optimal Waits and Charges in Health Insurance," Discussion Papers 07/02, Department of Economics, University of York. [Downloadable!]
  16. Farnworth, Michael G., 2003. "A game theoretic model of the relationship between prices and waiting times," Journal of Health Economics, Elsevier, vol. 22(1), pages 47-60, January. [Downloadable!] (restricted)
  17. Mark Bagnoli & Ted Bergstrom, 2005. "Log-concave probability and its applications," Economic Theory, Springer, vol. 26(2), pages 445-469, 08. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2007. "Competition and Waiting Times in Hospital Markets," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  2. Hugh Gravelle & Luigi Siciliani, 2007. "Ramsey Waits: Allocating Public Health Service Resources when there is Rationing by Waiting," Discussion Papers 07/15, Department of Economics, University of York. [Downloadable!]
    Other versions:
  3. Jacco Thijssen, 2007. "Ramsey Waits: A Computational Study on General Equilibrium Pricing of Derivative Securities," Discussion Papers 07/16, Department of Economics, University of York. [Downloadable!]
  4. Hugh Gravelle & Luigi Siciliani, 2009. "Third degree waiting time discrimination: optimal allocation of a public sector healthcare treatment under rationing by waiting," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 977-986. [Downloadable!]
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