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Modelling the Dynamics of a Public Health Care System: Evidence from Time-Series Data

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Author Info
Fabrizio Iacone
Steve Martin
Luigi Siciliani
Peter C Smith

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Abstract

The English National Health Service was established in 1948, and has therefore yielded some long time series data on health system performance. Waiting times for inpatient care have been a persistent cause of policy concern since the creation of the NHS. This paper develops a theoretical model of the dynamic interaction between key indicators of health system performance. It then investigates empirically the relationship between hospital activity, waiting times and population characteristics using aggregate time-series data for the NHS over the period 1952— 2005. Structural Vector Auto-Regression suggests that in the long run: a) higher activity is associated with lower waiting times (elasticity = -0.9%); b) a higher proportion of old population is associated with higher waiting times (elasticity = 1.6%). In the short run, higher lagged waiting time leads to higher activity (elasticity = 0.2%). We also find that shocks in waiting times are countered by higher activity, so the effect is only temporary, while shocks in activity have a permanent effect. We conclude that policies to reduce waiting times should focus on initiatives that increase hospital activity.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 07/23.

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Date of creation: Jul 2007
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Handle: RePEc:yor:yorken:07/23

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Related research
Keywords: Waiting Times; Dynamics; Vector Auto-Regression;

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Find related papers by JEL classification:
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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  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. Hugh Gravelle & Peter Smith & Ana Xavier, 2003. "Performance signals in the public sector: the case of health care," Oxford Economic Papers, Oxford University Press, vol. 55(1), pages 81-103, January.
  3. J.A. Goddard & M. Tavakoli, 1998. "Referral rates and waiting lists: some empirical evidence," Health Economics, John Wiley & Sons, Ltd., vol. 7(6), pages 545-549.
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  5. 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!]
  6. 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)
  7. Luigi Siciliani, 2005. "Does more choice reduce waiting times?," Health Economics, John Wiley & Sons, Ltd., vol. 14(1), pages 17-23. [Downloadable!]
  8. repec:rus:hseeco:122140 is not listed on IDEAS
  9. 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)
  10. Martin, Stephen & Rice, Nigel & Jacobs, Rowena & Smith, Peter, 2007. "The market for elective surgery: Joint estimation of supply and demand," Journal of Health Economics, Elsevier, vol. 26(2), pages 263-285, March. [Downloadable!] (restricted)
  11. 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)
  12. Frank Windmeijer & Hugh Gravelle & Pierre Hoonhout, 2005. "Waiting lists, waiting times and admissions: an empirical analysis at hospital and general practice level," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 971-985. [Downloadable!]
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