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Is waiting-time prioritisation welfare improving?

  • Hugh Gravelle

    (National Primary Care Research and Development Centre, Centre for Health Economics, University of York, UK)

  • Luigi Siciliani

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 treatment is smaller than the mean observable benefit of the patients who receive the treatment. This is true (a) if the distribution of the unobservable 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. Copyright © 2007 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 17 (2008)
Issue (Month): 2 ()
Pages: 167-184

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Handle: RePEc:wly:hlthec:v:17:y:2008:i:2:p:167-184
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Pedro Pita Barros & Pau Olivella, . "Waiting Lists And Patient Selection," UFAE and IAE Working Papers 444.99, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. 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 Publishing.
  3. 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.
  4. Michael Hoel & Erik Magnus Sæther, 2001. "Public Health Care with Waiting Time: The Role of Supplementary Private Health Care," CESifo Working Paper Series 562, CESifo Group Munich.
  5. Lindsay, Cotton M & Feigenbaum, Bernard, 1984. "Rationing by Waiting Lists," American Economic Review, American Economic Association, vol. 74(3), pages 404-17, June.
  6. 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.
  7. Hugh Gravelle & Luigi Siciliani, 2007. "Optimal Waits and Charges in Health Insurance," Discussion Papers 07/02, Department of Economics, University of York.
  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.
  9. Mark Bagnoli & Ted Bergstrom, 2005. "Log-concave probability and its applications," Economic Theory, Springer, vol. 26(2), pages 445-469, 08.
  10. 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.
  11. Hugh Gravelle & Luigi Siciliani, 2008. "Is waiting-time prioritisation welfare improving?," Health Economics, John Wiley & Sons, Ltd., vol. 17(2), pages 167-184.
  12. Sam Bucovetsky, 1984. "On the Use of Distributional Waits," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 699-717, November.
  13. 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.
  14. Luigi Siciliani, 2005. "Does more choice reduce waiting times?," Health Economics, John Wiley & Sons, Ltd., vol. 14(1), pages 17-23.
  15. 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.
  16. Luigi Siciliani & Jeremy Hurst, 2003. "Explaining Waiting Times Variations for Elective Surgery Across OECD Countries," OECD Health Working Papers 7, OECD Publishing.
  17. 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.
  18. 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.
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