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An economic model of the market for hospital treatment for non‐urgent conditions

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  • J. A. Goddard
  • M. Malek
  • M. Tavakoli

Abstract

This paper develops an economic model of the market for treatment of waiting list conditions, in which complainants choose between private treatment, NHS treatment and no hospital treatment. This choice depends on a number of clinical and non‐clinical factors, which enter the demand functions for private and NHS treatment. Among the key influences are the price of private treatment and the expected duration of wait for NHS treatment, both of which are endogenous variables in the model. Given a pair of private sector and NHS supply functions, expressions are obtained for the price and expected wait at which demand and supply are simultaneously equated in both the private sector and the NHS. The paper concludes by exploring the responsiveness of the equilibrium to various demand side and supply side shocks.

Suggested Citation

  • J. A. Goddard & M. Malek & M. Tavakoli, 1995. "An economic model of the market for hospital treatment for non‐urgent conditions," Health Economics, John Wiley & Sons, Ltd., vol. 4(1), pages 41-55, January.
    • Handle: RePEc:wly:hlthec:v:4:y:1995:i:1:p:41-55
    DOI: 10.1002/hec.4730040105
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    References listed on IDEAS

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    1. Barzel, Yoram, 1974. "A Theory of Rationing by Waiting," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 73-95, April.
    2. Edward P. C. Kao & Grace G. Tung, 1981. "Bed Allocation in a Public Health Care Delivery System," Management Science, INFORMS, vol. 27(5), pages 507-520, May.
    3. Cullis, John G. & Jones, Philip R., 1985. "National health service waiting lists : A discussion of competing explanations and a policy proposal," Journal of Health Economics, Elsevier, vol. 4(2), pages 119-135, June.
    4. H.S.E. Gravelle, 1990. "The Efficiency of Rationing by Waiting for Health Care," Working Papers 216, Queen Mary University of London, School of Economics and Finance.
    5. Lindsay, Cotton M & Feigenbaum, Bernard, 1984. "Rationing by Waiting Lists," American Economic Review, American Economic Association, vol. 74(3), pages 404-417, June.
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    Cited by:

    1. Pedro Pita Barros & Pau Olivella, 2005. "Waiting Lists and Patient Selection," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(3), pages 623-646, September.
    2. André Madeira & Victor Moutinho & José Alberto Fuinhas, 2021. "Does waiting times decrease or increase operational costs in short and long-term? Evidence from Portuguese public hospitals," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(8), pages 1195-1216, November.
    3. Christine A. Yee & Kyle Barr & Taeko Minegishi & Austin Frakt & Steven D. Pizer, 2022. "Provider supply and access to primary care," Health Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 1296-1316, July.
    4. Siciliani, Luigi & Hurst, Jeremy, 2005. "Tackling excessive waiting times for elective surgery: a comparative analysis of policies in 12 OECD countries," Health Policy, Elsevier, vol. 72(2), pages 201-215, May.
    5. Siciliani, Luigi, 2006. "A dynamic model of supply of elective surgery in the presence of waiting times and waiting lists," Journal of Health Economics, Elsevier, vol. 25(5), pages 891-907, September.
    6. Luigi Siciliani, 2005. "Does more choice reduce waiting times?," Health Economics, John Wiley & Sons, Ltd., vol. 14(1), pages 17-23, January.

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