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Private health care as a supplement to a public health system with waiting time for treatment


  • Hoel, Michael

    () (Department of Economics)

  • Sæther, Erik Magnus

    (Ragnar Frisch Centre for Economic Research)


In this article the authors Michael Hoel and Erik Magnus Sæther consider an economy where most of the health care is publicly provided, and where there is waiting time for several types of treatments. Private health care without waiting time is an option for the patients in the public health queue. This article shows the effects of a tax (positive or negative) on private health care, and derives the socially optimal tax/subsidy. Finally, a discussion of how the size of the tax might affect the political support for a high quality public health system is provided.

Suggested Citation

  • Hoel, Michael & Sæther, Erik Magnus, 2009. "Private health care as a supplement to a public health system with waiting time for treatment," HERO On line Working Paper Series 2000:9, Oslo University, Health Economics Research Programme.
  • Handle: RePEc:hhs:oslohe:2000_009

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    References listed on IDEAS

    1. 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.
    2. 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.
    3. 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.
    4. Hamilton, Barton H. & Hamilton, Vivian H. & Mayo, Nancy E., 1996. "What are the costs of queuing for hip fracture surgery in Canada?," Journal of Health Economics, Elsevier, vol. 15(2), pages 161-185, April.
    5. Iversen, Tor, 1993. "A theory of hospital waiting lists," Journal of Health Economics, Elsevier, vol. 12(1), pages 55-71, April.
    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.
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    Cited by:

    1. Hoel, Michael & Saether, Erik Magnus, 2003. "Public health care with waiting time: the role of supplementary private health care," Journal of Health Economics, Elsevier, vol. 22(4), pages 599-616, July.
    2. Paula González, 2002. "Policy Implications Of Transferring Patients To Private Practice," Working Papers. Serie AD 2002-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

    More about this item


    Private health care; public health care; health queues;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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