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The Payment of Hospital Services: a Waiting Lists Model

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  • Ferrari Dr. Alessandra

    (University of Reading, UK, a.ferrari@reading.ac.uk)

Abstract

This paper analyses the incentive properties of prospective payment systems for hospital contracts, a key feature in many health systems’ reforms. Building on current literature, the model explicitly allows for the existence of waiting time, modelled as adversely affecting patients’ utility and therefore reducing social welfare. The model shows that rewarding hospitals for their demand leads to the first best solution, identified with respect to the relevant quality and quantity variables. The additional separate payment of a price per case is instead required when the social cost of waiting is introduced alongside the private costs.

Suggested Citation

  • Ferrari Dr. Alessandra, 2005. "The Payment of Hospital Services: a Waiting Lists Model," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-19, September.
  • Handle: RePEc:bpj:bejeap:v:topics.5:y:2005:i:1:n:18
    DOI: 10.1515/1538-0653.1426
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    References listed on IDEAS

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    1. Maggie Cahalan & Wendy Mansfield & Natalie Justh, "undated". "The Status of Academic Libraries in the United States: Results from the 1996 Academic Library Survey with Historical Comparisons," Mathematica Policy Research Reports e75b610016454595b8935532e, Mathematica Policy Research.
    2. Panel on Estimates of Poverty for Small Geographic Areas of which Allen L. Schirm is a member, "undated". "Small-Area Income and Poverty Estimates: Priorities for 2000 and Beyond," Mathematica Policy Research Reports a0588a6815864c46b8974e1d1, Mathematica Policy Research.
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