IDEAS home Printed from https://ideas.repec.org/p/yor/hectdg/06-14.html
   My bibliography  Save this paper

Rationing the Public Provision of Health Care in the Presence of Private Supplements: Evidence from the Italian NHS

Author

Listed:
  • Daniele Fabbri
  • Chiara Monfardini

Abstract

In this paper we assess the relative effectiveness of user charges and administrative waiting times as a tool for rationing public healthcare in Italy. We measure demand elasticities by estimating a simultaneous equation model of GP primary care visits, public specialist consultations and private specialist consultations, as if they were part of an incomplete system of demand. We find that own price elasticity of the demand for public specialist consultation is about -0.3, while administrative waiting time plays a less important role. No substitution exists between the demand for public and private specialists, so that user charges act as a net deterrent for over-consumption. The public provision of healthcare does not induce the wealthy to opt out. Moreover our evidence suggests that user charges and waiting lists do not serve redistributive purposes.

Suggested Citation

  • Daniele Fabbri & Chiara Monfardini, 2006. "Rationing the Public Provision of Health Care in the Presence of Private Supplements: Evidence from the Italian NHS," Health, Econometrics and Data Group (HEDG) Working Papers 06/14, HEDG, c/o Department of Economics, University of York.
  • Handle: RePEc:yor:hectdg:06/14
    as

    Download full text from publisher

    File URL: https://www.york.ac.uk/media/economics/documents/herc/wp/06_14.pdf
    File Function: Main text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sam Bucovetsky, 1984. "On the Use of Distributional Waits," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 699-717, November.
    2. Acton, Jan Paul, 1975. "Nonmonetary Factors in the Demand for Medical Services: Some Empirical Evidence," Journal of Political Economy, University of Chicago Press, vol. 83(3), pages 595-614, June.
    3. Hamilton, Barton H & Bramley-Harker, Robert Edward, 1999. "The Impact of the NHS Reforms on Queues and Surgical Outcomes in England: Evidence from Hip Fracture Patients," Economic Journal, Royal Economic Society, vol. 109(457), pages 437-462, July.
    4. Deb, Partha & Trivedi, Pravin K., 2002. "The structure of demand for health care: latent class versus two-part models," Journal of Health Economics, Elsevier, vol. 21(4), pages 601-625, July.
    5. Rosanna M. Coffey, 1983. "The Effect of Time Price on the Demand for Medical-Care Services," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 407-424.
    6. Windmeijer, F A G & Silva, J M C Santos, 1997. "Endogeneity in Count Data Models: An Application to Demand for Health Care," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 281-294, May-June.
    7. Atella, Vincenzo & Deb, Partha, 2008. "Are primary care physicians, public and private sector specialists substitutes or complements? Evidence from a simultaneous equations model for count data," Journal of Health Economics, Elsevier, vol. 27(3), pages 770-785, May.
    8. 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.
    9. 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.
    10. Deb, Partha & Trivedi, Pravin K, 1997. "Demand for Medical Care by the Elderly: A Finite Mixture Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 313-336, May-June.
    11. Ann D. Colle & Michael Grossman, 1978. "Determinants of Pediatric Care Utilization," NBER Chapters, in: The Economics of Physician and Patient Behavior, pages 115-158, National Bureau of Economic Research, Inc.
    12. Propper, Carol, 2000. "The demand for private health care in the UK," Journal of Health Economics, Elsevier, vol. 19(6), pages 855-876, November.
    13. Cutler, David M, 1995. "The Incidence of Adverse Medical Outcomes under Prospective Payment," Econometrica, Econometric Society, vol. 63(1), pages 29-50, January.
    14. A. C. Cameron & P. K. Trivedi & Frank Milne & J. Piggott, 1988. "A Microeconometric Model of the Demand for Health Care and Health Insurance in Australia," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 55(1), pages 85-106.
    15. Mroz, Thomas A., 1999. "Discrete factor approximations in simultaneous equation models: Estimating the impact of a dummy endogenous variable on a continuous outcome," Journal of Econometrics, Elsevier, vol. 92(2), pages 233-274, October.
    16. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    17. 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.
    18. Luigi Siciliani & Jeremy Hurst, 2003. "Explaining Waiting Times Variations for Elective Surgery Across OECD Countries," OECD Health Working Papers 7, OECD Publishing.
    19. Daniele Fabbri & Chiara Monfardini, 2003. "Public vs. Private Health Care Services Demand in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 62(1), pages 93-123, April.
    20. Carol Propper, 1995. "The Disutility of Time Spent on the United Kingdom's National Health Service Waiting Lists," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 677-700.
    21. Larry G. Epstein, 1982. "Integrability of Incomplete Systems of Demand Functions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(3), pages 411-425.
    22. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, November.
    23. Auerbach,Alan J. & Lee,Ronald D. (ed.), 2001. "Demographic Change and Fiscal Policy," Cambridge Books, Cambridge University Press, number 9780521662444, November.
    24. Munro, Alistair, 1992. "Self-Selection and Optimal In-Sind Transfers," Economic Journal, Royal Economic Society, vol. 102(414), pages 1184-1196, September.
    25. A. J. Auerbach & M. Feldstein (ed.), 2002. "Handbook of Public Economics," Handbook of Public Economics, Elsevier, edition 1, volume 3, number 3.
    26. A. J. Culyer & J. P. Newhouse (ed.), 2000. "Handbook of Health Economics," Handbook of Health Economics, Elsevier, edition 1, volume 1, number 1.
    27. Balestrino, Alessandro, 1999. "User Charges as Redistributive Devices," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(4), pages 511-524.
    28. Boadway, Robin & Marchand, Maurice, 1995. "The Use of Public Expenditures for Redistributive Purposes," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 45-59, January.
    29. 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.
    30. Besley, Timothy & Hall, John & Preston, Ian, 1999. "The demand for private health insurance: do waiting lists matter?," Journal of Public Economics, Elsevier, vol. 72(2), pages 155-181, May.
    31. 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.
    32. Goldman, Fred & Grossman, Michael, 1978. "The Demand for Pediatric Care: An Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 259-280, April.
    33. David M. Cutler & Jonathan Gruber, 1996. "Does Public Insurance Crowd out Private Insurance?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 391-430.
    34. Elizabeth Docteur & Howard Oxley, 2003. "Health-Care Systems: Lessons from the Reform Experience," OECD Health Working Papers 9, OECD Publishing.
    35. A. J. Auerbach & M. Feldstein (ed.), 2002. "Handbook of Public Economics," Handbook of Public Economics, Elsevier, edition 1, volume 4, number 4.
    36. Eggleston, Karen & Bir, Anupa, 2006. "Physician dual practice," Health Policy, Elsevier, vol. 78(2-3), pages 157-166, October.
    37. Lindsay, Cotton M & Feigenbaum, Bernard, 1984. "Rationing by Waiting Lists," American Economic Review, American Economic Association, vol. 74(3), pages 404-417, June.
    38. Sicilani Luigi & Jeremy Hurst, 2005. "Explaining Waiting-time Variations for Elective Surgery Across OECD Countries," OECD Economic Studies, OECD Publishing, vol. 2004(1), pages 95-123.
    39. Partha Deb, 2001. "A discrete random effects probit model with application to the demand for preventive care," Health Economics, John Wiley & Sons, Ltd., vol. 10(5), pages 371-383, July.
    40. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-277, June.
    41. Alessandro Balestrino, 1999. "User Charges as Redistributive Devices," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(4), pages 511-524, October.
    42. Besley, Timothy, 1991. "Welfare Improving User Charges for Publicly Provided Private Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 93(4), pages 495-510.
    43. George France & Francesco Taroni & Andrea Donatini, 2005. "The Italian health‐care system," Health Economics, John Wiley & Sons, Ltd., vol. 14(S1), pages 187-202, September.
    44. Winfried Pohlmeier & Volker Ulrich, 1995. "An Econometric Model of the Two-Part Decisionmaking Process in the Demand for Health Care," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 339-361.
    45. 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.
    46. Hausman, Jerry A, 1981. "Exact Consumer's Surplus and Deadweight Loss," American Economic Review, American Economic Association, vol. 71(4), pages 662-676, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luigi Siciliani & Tor Iversen, 2012. "Waiting Times and Waiting Lists," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 24, Edward Elgar Publishing.
    2. Chai Cheng, T., 2011. "Measuring the effects of removing subsidies for private insurance on public expenditure for health care," Health, Econometrics and Data Group (HEDG) Working Papers 11/32, HEDG, c/o Department of Economics, University of York.
    3. Michela Ponzo & Vincenzo Scoppa, 2016. "Cost-Sharing and Use of Health Services in Italy: Evidence from a Fuzzy Regression Discontinuity Design," CSEF Working Papers 440, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. 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.
    5. 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.
    6. Daniele Fabbri & Chiara Monfardini, 2016. "Opt Out or Top Up? Voluntary Health Care Insurance and the Public vs. Private Substitution," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(1), pages 75-93, February.
    7. Chai Cheng, T & Vahid, F, 2010. "Demand for hospital care and private health insurance in a mixed publicprivate system: empirical evidence using a simultaneous equation modeling approach," Health, Econometrics and Data Group (HEDG) Working Papers 10/25, HEDG, c/o Department of Economics, University of York.
    8. Elsa Marques & Sian Noble & Ashley W. Blom & William Hollingworth, 2014. "Disclosing Total Waiting Times For Joint Replacement: Evidence From The English Nhs Using Linked Hes Data," Health Economics, John Wiley & Sons, Ltd., vol. 23(7), pages 806-820, July.
    9. Haizhen Mou, 2012. "The political economy of public health expenditure and wait times in a public‐private mixed health care system," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1640-1666, November.
    10. Geraci Andrea & Fabbri Daniele & Monfardini Chiara, 2018. "Testing Exogeneity of Multinomial Regressors in Count Data Models: Does Two-stage Residual Inclusion Work?," Journal of Econometric Methods, De Gruyter, vol. 7(1), pages 1-19, January.
    11. Terence C. Cheng & Joan Costa-Font & Nattavudh Powdthavee, 2018. "Do You Have to Win It to Fix It? A Longitudinal Study of Lottery Winners and Their Health-Care Demand," American Journal of Health Economics, MIT Press, vol. 4(1), pages 26-50, Winter.
    12. Del Vecchio, Mario & Fenech, Lorenzo & Prenestini, Anna, 2015. "Private health care expenditure and quality in Beveridge systems: Cross-regional differences in the Italian NHS," Health Policy, Elsevier, vol. 119(3), pages 356-366.
    13. Cheng, Terence Chai, 2014. "Measuring the effects of reducing subsidies for private insurance on public expenditure for health care," Journal of Health Economics, Elsevier, vol. 33(C), pages 159-179.
    14. Davide Pianori & Elisa Maietti & Jacopo Lenzi & Mattia Quargnolo & Stefano Guicciardi & Kadjo Yves Cedric Adja & Maria Pia Fantini & Federico Toth, 2020. "Sociodemographic and health service organizational factors associated with the choice of the private versus public sector for specialty visits: Evidence from a national survey in Italy," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-12, May.
    15. Andrea Riganti & Luigi Siciliani & Carlo V. Fiorio, 2017. "The effect of waiting times on demand and supply for elective surgery: Evidence from Italy," Health Economics, John Wiley & Sons, Ltd., vol. 26(S2), pages 92-105, September.
    16. Silvia Balia & Rinaldo Brau, 2014. "A Country For Old Men? Long‐Term Home Care Utilization In Europe," Health Economics, John Wiley & Sons, Ltd., vol. 23(10), pages 1185-1212, October.
    17. Cici McNamara & Natalia Serna, 2022. "The impact of a national formulary expansion on diabetics," Health Economics, John Wiley & Sons, Ltd., vol. 31(11), pages 2311-2332, November.

    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. Óscar D. Lourenço & Pedro L. Ferreira, 2005. "Utilization of public health centres in Portugal: effect of time costs and other determinants. Finite mixture models applied to truncated samples," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 939-953, September.
    2. 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.
    3. Daniele Fabbri & Chiara Monfardini, 2016. "Opt Out or Top Up? Voluntary Health Care Insurance and the Public vs. Private Substitution," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(1), pages 75-93, February.
    4. 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.
    5. 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.
    6. Simona GRASSI, 2006. "On the characteristics of a mixed system of provision of a private good. An application to health care," Departmental Working Papers 2006-14, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    7. Chai Cheng, T & Vahid, F, 2010. "Demand for hospital care and private health insurance in a mixed publicprivate system: empirical evidence using a simultaneous equation modeling approach," Health, Econometrics and Data Group (HEDG) Working Papers 10/25, HEDG, c/o Department of Economics, University of York.
    8. Sergi Jiménez-Martín & José Labeaga & Maite Martínez-Granado, 2004. "An empirical analysis of the demand for physician services across the European Union," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(2), pages 150-165, May.
    9. López Nicolás, Ángel & Vera-Hernández, Marcos, 2008. "Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model," Journal of Health Economics, Elsevier, vol. 27(5), pages 1285-1298, September.
    10. Hugh Gravelle & Luigi Siciliani, 2008. "Is waiting‐time prioritisation welfare improving?," Health Economics, John Wiley & Sons, Ltd., vol. 17(2), pages 167-184, February.
    11. Partha Deb & Pravin K. Trivedi, 2012. "Empirical Models of Health Care Use," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 14, Edward Elgar Publishing.
    12. 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.
    13. Sisira Sarma & Wayne Simpson, 2006. "A microeconometric analysis of Canadian health care utilization," Health Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 219-239, March.
    14. João Cotter Salvado, 2008. "The Determinants of Health Care Utilization in Portugal: An Approach with Count Data Models," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 437-458, September.
    15. Granlund, David & Wikström, Magnus, 2013. "Public Provision and Cross-Border Health Care," HUI Working Papers 98, HUI Research.
    16. 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.
    17. Hendrik Schmitz, 2012. "More health care utilization with more insurance coverage? Evidence from a latent class model with German data," Applied Economics, Taylor & Francis Journals, vol. 44(34), pages 4455-4468, December.
    18. Antonio Clavero Barranquero & Mª. Luz González Alvarez, 2005. "A survey of econometric models to analyze the demand and utilisation of health care," Hacienda Pública Española / Review of Public Economics, IEF, vol. 173(2), pages 129-162, June.
    19. Óscar Lourenço & Carlota Quintal & Pedro Lopes Ferreira & Pedro Pita Barros, 2007. "A equidade na utilização de cuidados de saúde em Portugal: Uma avaliação baseada em modelos de contagem," Notas Económicas, Faculty of Economics, University of Coimbra, issue 25, pages 6-26, June.
    20. Haizhen Mou, 2012. "The political economy of public health expenditure and wait times in a public‐private mixed health care system," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1640-1666, November.

    More about this item

    Keywords

    healthcare demand elasticities; user charges; waiting lists; multivariate count data model;
    All these keywords.

    JEL classification:

    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

    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:yor:hectdg:06/14. 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: Jane Rawlings (email available below). General contact details of provider: https://edirc.repec.org/data/deyoruk.html .

    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.