Waiting times are commonly used in the health sector to ration demand. We show that when money charges (coinsurance rates) are optimally set and there are no redistributional considerations, it is never optimal to have a positive waiting time if the marginal cost of waiting is higher for patients with greater benefits from health care. Although waiting time provides an additional instrument to control demand it does not mitigate the conflict between efficient risk bearing and efficient consumption of health care.
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Paper provided by Department of Economics, University of York in its series Discussion Papers with number
07/02.
Length: Date of creation: Jan 2007 Date of revision: Handle: RePEc:yor:yorken:07/02
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Find related papers by JEL classification: H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
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