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Private Practice in Public Hospitals: Should Senior Consultants Be Prioritized?

Author

Listed:
  • Xidong Guo
  • Sarah Parlane

    (School of Economics, University College Dublin, and UCD Geary Institute for Public Policy, University College Dublin)

Abstract

This paper proposes a normative analysis which investigates the optimal management of private practices within a public hospital. Private income supplementation induces consultants to attend to more patients which reduces waiting lists and the public cost of healthcare. It is however optimal to cap the consultants’ private income, regardless of seniority. When first-degree discrimination is possible, the more productive (senior) consultants receive a higher private income than their junior counterparts when priority is given to shortening waiting lists. However, they must charge a lower fee when priority is given to protecting the private patient's consumer surplus. When discrimination is not possible, the design of envy-free contracts enables senior consultants to extract rents and these rents increase with the private fee charged by their junior colleagues. As a result, and in this situation, junior consultants systematically get a lower private supplemental income when working alongside senior consultants.

Suggested Citation

  • Xidong Guo & Sarah Parlane, 2023. "Private Practice in Public Hospitals: Should Senior Consultants Be Prioritized?," Working Papers 202301, Geary Institute, University College Dublin.
  • Handle: RePEc:ucd:wpaper:202301
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    References listed on IDEAS

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    More about this item

    Keywords

    Public Hospital; Senior Consultants; discrimination; Healthcare;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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