IDEAS home Printed from https://ideas.repec.org/p/ipu/wpaper/39.html
   My bibliography  Save this paper

Welfare analysis of rationing in health care provision

Author

Listed:
  • Laura Levaggi

    (Libera Università di Bolzano)

  • Rosella Levaggi

    (Università di Brescia)

Abstract

We study the welfare properties of direct restrictions based on cost-effectiveness and indirect methods represented by waiting lists in a public health care system. Health care is supplied for free by the public health sector, but patients can choose to address their demand elsewhere by stipulating a private health care insurance policy to avoid restrictions. Our model shows that if the individual response to treatment is independent of income and cannot be observed by the patient, the choice of opting out simply depends on income and the redistributive effects of both instruments are quite similar. In general, restrictions may only improve welfare of relatively rich individuals, usually those that opt out of the public health care system. Form a policy point of view, our model casts serious doubts upon the use of these instruments for redistributive purposes.

Suggested Citation

  • Laura Levaggi & Rosella Levaggi, 2016. "Welfare analysis of rationing in health care provision," Working papers 39, Società Italiana di Economia Pubblica.
    • Handle: RePEc:ipu:wpaper:39
    as

    Download full text from publisher

    File URL: http://www.siepweb.it/siep/wp/wp-content/uploads/repec/1458214889Levaggi_Levaggi_WP_SIEP_705.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Amedeo Fossati & Rosella Levaggi, 2008. "Delay is not the answer: waiting time in health care & income redistribution," Working Papers 0801, University of Brescia, Department of Economics.
    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. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-984, September.
    4. Laura Levaggi & Rosella Levaggi, 2011. "Welfare properties of restrictions to health care based on cost effectiveness," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 101-110, January.
    5. Schnellenbach, Jan, 2012. "Nudges and norms: On the political economy of soft paternalism," European Journal of Political Economy, Elsevier, vol. 28(2), pages 266-277.
    6. Douglas Coyle & Martin J. Buxton & Bernie J. O'Brien, 2003. "Stratified cost‐effectiveness analysis: a framework for establishing efficient limited use criteria," Health Economics, John Wiley & Sons, Ltd., vol. 12(5), pages 421-427, May.
    7. 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.
    8. Hugh Gravelle & Luigi Siciliani, 2009. "Third degree waiting time discrimination: optimal allocation of a public sector healthcare treatment under rationing by waiting," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 977-986, August.
    9. Katherine Cuff & Jeremiah Hurley & Stuart Mestelman & Andrew Muller & Robert Nuscheler, 2012. "Public and private health‐care financing with alternate public rationing rules," Health Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 83-100, February.
    10. Lindsay, Cotton M & Feigenbaum, Bernard, 1984. "Rationing by Waiting Lists," American Economic Review, American Economic Association, vol. 74(3), pages 404-417, June.
    11. Appleby, John & Devlin, Nancy & Parkin, David & Buxton, Martin & Chalkidou, Kalipso, 2009. "Searching for cost effectiveness thresholds in the NHS," Health Policy, Elsevier, vol. 91(3), pages 239-245, August.
    12. Gravelle, Hugh & Siciliani, Luigi, 2008. "Optimal quality, waits and charges in health insurance," Journal of Health Economics, Elsevier, vol. 27(3), pages 663-674, May.
    13. 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.
    14. Cylus, Jonathan & Papanicolas, Irene, 2015. "An analysis of perceived access to health care in Europe: How universal is universal coverage?," Health Policy, Elsevier, vol. 119(9), pages 1133-1144.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laura Levaggi & Rosella Levaggi, 2017. "Rationing in health care provision: a welfare approach," International Journal of Health Economics and Management, Springer, vol. 17(2), pages 235-249, June.
    2. Dixon, Huw & Siciliani, Luigi, 2009. "Waiting-time targets in the healthcare sector: How long are we waiting?," Journal of Health Economics, Elsevier, vol. 28(6), pages 1081-1098, December.
    3. Huw Dixon & Luigi Siciliani, 2009. "Waiting Time Targets in Healthcare Markets: How Long Are We Waiting?," Discussion Papers 09/05, Department of Economics, University of York.
    4. Granlund, David & Wikström, Magnus, 2013. "Public Provision and Cross-Border Health Care," HUI Working Papers 98, HUI Research.
    5. Sharma, Anurag & Siciliani, Luigi & Harris, Anthony, 2013. "Waiting times and socioeconomic status: Does sample selection matter?," Economic Modelling, Elsevier, vol. 33(C), pages 659-667.
    6. Fabbri, Daniele & Monfardini, Chiara, 2009. "Rationing the public provision of healthcare in the presence of private supplements: Evidence from the Italian NHS," Journal of Health Economics, Elsevier, vol. 28(2), pages 290-304, March.
    7. Gravelle, Hugh & Siciliani, Luigi, 2008. "Ramsey waits: Allocating public health service resources when there is rationing by waiting," Journal of Health Economics, Elsevier, vol. 27(5), pages 1143-1154, September.
    8. Granlund David & Wikström Magnus, 2016. "Public Provision and Cross-Border Health Care," Forum for Health Economics & Policy, De Gruyter, vol. 19(2), pages 157-177, December.
    9. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2008. "Competition and waiting times in hospital markets," Journal of Public Economics, Elsevier, vol. 92(7), pages 1607-1628, July.
    10. Sá, Luís & Siciliani, Luigi & Straume, Odd Rune, 2019. "Dynamic hospital competition under rationing by waiting times," Journal of Health Economics, Elsevier, vol. 66(C), pages 260-282.
    11. Gravelle, Hugh & Schroyen, Fred, 2020. "Optimal hospital payment rules under rationing by waiting," Journal of Health Economics, Elsevier, vol. 70(C).
    12. Felder, Stefan, 2008. "To wait or to pay for medical treatment? Restraining ex-post moral hazard in health insurance," Journal of Health Economics, Elsevier, vol. 27(6), pages 1418-1422, December.
    13. Hugh Gravelle & Luigi Siciliani, 2008. "Is waiting‐time prioritisation welfare improving?," Health Economics, John Wiley & Sons, Ltd., vol. 17(2), pages 167-184, February.
    14. Jacco Thijssen, 2007. "Ramsey Waits: A Computational Study on General Equilibrium Pricing of Derivative Securities," Discussion Papers 07/16, Department of Economics, University of York.
    15. Luigi Siciliani, 2008. "A note on the dynamic interaction between waiting times and waiting lists," Health Economics, John Wiley & Sons, Ltd., vol. 17(5), pages 639-647, May.
    16. Karin Monstad & Lars Birger Engesæter & Birgitte Espehaug, 2014. "Waiting Time And Socioeconomic Status—An Individual‐Level Analysis," Health Economics, John Wiley & Sons, Ltd., vol. 23(4), pages 446-461, April.
    17. Hugh Gravelle & Luigi Siciliani, 2009. "Third degree waiting time discrimination: optimal allocation of a public sector healthcare treatment under rationing by waiting," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 977-986, August.
    18. Siciliani, Luigi & Stanciole, Anderson & Jacobs, Rowena, 2009. "Do waiting times reduce hospital costs?," Journal of Health Economics, Elsevier, vol. 28(4), pages 771-780, July.
    19. Gutacker, Nils & Siciliani, Luigi & Cookson, Richard, 2016. "Waiting time prioritisation: Evidence from England," Social Science & Medicine, Elsevier, vol. 159(C), pages 140-151.
    20. Pizer, Steven D. & Prentice, Julia C., 2011. "Time is money: Outpatient waiting times and health insurance choices of elderly veterans in the United States," Journal of Health Economics, Elsevier, vol. 30(4), pages 626-636, July.

    More about this item

    Keywords

    Waiting lists; Explicit restrictions; Welfare analysis; Redistribution;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ipu:wpaper:39. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Monica Bozzano (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.