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

  • Fabrizio Iacone

    (Department of Economics and Related Studies, University of York)

  • Steve Martin

    (Department of Economics and Related Studies, University of York)

  • Luigi Siciliani

    (Centre for Health Economics, University of York)

  • Peter C Smith

    (Centre for Health Economics, University of York)

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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File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/rp29_the_dynamics_of_a_public_health_care_system.pdf
File Function: First version, 2007
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Paper provided by Centre for Health Economics, University of York in its series Working Papers with number 029cherp.

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Length: 28 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:chy:respap:29cherp
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  1. Frank Windmeijer & Hugh Gravell & Pierre Hoonhout, 2004. "Waiting lists, waiting times and admissions: an empirical analysis at hospital and general practice level," IFS Working Papers W04/35, Institute for Fiscal Studies.
  2. 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.
  3. 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.
  4. Stephen Martin & Peter C. Smith, 2003. "Using panel methods to model waiting times for National Health Service surgery," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 166(3), pages 369-387.
  5. 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.
  6. Luigi Siciliani, 2005. "Does more choice reduce waiting times?," Health Economics, John Wiley & Sons, Ltd., vol. 14(1), pages 17-23.
  7. 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.
  8. 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.
  9. repec:rus:hseeco:122140 is not listed on IDEAS
  10. 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.
  11. Lindsay, Cotton M & Feigenbaum, Bernard, 1984. "Rationing by Waiting Lists," American Economic Review, American Economic Association, vol. 74(3), pages 404-17, June.
  12. 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.
  13. 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.
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