Optimal Waits and Charges in Health Insurance
AbstractWaiting 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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Bibliographic InfoPaper provided by Department of Economics, University of York in its series Discussion Papers with number 07/02.
Date of creation: Jan 2007
Date of revision:
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Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
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Web page: http://www.york.ac.uk/economics/
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Waiting times; rationing; optimal pricing; insurance;
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-10 (All new papers)
- NEP-HEA-2007-02-10 (Health Economics)
- NEP-IAS-2007-02-10 (Insurance Economics)
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- Hugh Gravelle & Luigi Siciliani, 2008.
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John Wiley & Sons, Ltd., vol. 17(2), pages 167-184.
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- 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.
- 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.
- 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.
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