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Hospital specialists' private practice and its impact on the number of NHS patients treated and on the delay for elective surgery

  • Antonia Morga
  • Ana Xavier

This paper analyses UK NHS waiting times and waiting lists for elective surgery looking at the hospital specialists' behaviour and the conflict of interest these may face when allowed to practice privately. We look at the relationship between the government as the health care purchaser and principal of a two-tier hierarchy, and two hospital specialists, the agents, that deal with elective and emergency treatement. Specialists are organised in a separated structure, each responsible for only one type of surgery (either elective or emergency). We formalise specialists' preferences when dealing with the two activities. We see how specialists' interest in the income obtained with private practice (and altruism) affects negatively (positively) the optimal NHS numbers treated and increases the waiting time for elective surgery. Asymmetry of information also has a negative impact on the NHS leading to fewer patients treated or higher transfers paid. If remuneration is based on performance, transfers have to take private practice into account. As a result, there may be benefits from extra investment so as to improve information systems as well as seeking out instruments for nurturing more altruistic behaviour on the part of the specialists

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 01/01.

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Handle: RePEc:yor:yorken:01/01
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  1. Mooney, Gavin & Ryan, Mandy, 1993. "Agency in health care: Getting beyond first principles," Journal of Health Economics, Elsevier, vol. 12(2), pages 125-135, July.
  2. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
  3. Karen Bloor & Alan Maynard, 1992. "Rewarding excellence? Consultants' distinction awards and the need for reform," Working Papers 100chedp, Centre for Health Economics, University of York.
  4. Carlos Lerner & Karl Claxton, 1994. "Modelling the behaviour of general practitioners: a theoretical foundation for studies of fundholding," Working Papers 116chedp, Centre for Health Economics, University of York.
  5. Demski, Joel S. & Sappington, David, 1984. "Optimal incentive contracts with multiple agents," Journal of Economic Theory, Elsevier, vol. 33(1), pages 152-171, June.
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  7. Barzel, Yoram, 1974. "A Theory of Rationing by Waiting," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 73-95, April.
  8. Gaynor, Martin, 1994. "Issues in the Industrial Organization of the Market for Physician Services," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 211-55, Spring.
  9. Hugh Gravelle & Peter C. Smith & Ana Xavier, . "Waiting Times and Waiting Lists: A Model of the Market for Elective Surgery," Discussion Papers 00/27, Department of Economics, University of York.
  10. Lindsay, Cotton M & Feigenbaum, Bernard, 1984. "Rationing by Waiting Lists," American Economic Review, American Economic Association, vol. 74(3), pages 404-17, June.
  11. 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.
  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. Karen Bloor & Alam Maynard & Andrew Street, 1992. "How much is a doctor worth?," Working Papers 098chedp, Centre for Health Economics, University of York.
  14. 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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