Public Health Care with Waiting Time: The Role of Supplementary Private Health Care

Arbeitspapier

We consider an economy where most of the health care is publicly provided,and where there is waiting time for several types of treatments. Privatehealth care without waiting time is an option for the patients in the publichealth queue. We show that although patients with low waiting costs willchoose public treatment, they may be better off with waiting time thanwithout. The reason is that waiting time induces patients with high waitingcosts to choose private treatment, thus reducing the cost of public healthcare that everyone pays for. Even if higher quality (i.e. zero waiting time) canbe achieved at no cost, the self-selection induced redistribution may implythat it is socially optimal to provide health care publicly and at an inferiorquality level. We give a detailed discussion of the circumstances in which it isoptimal to have waiting time for public health treatment. Moreover, we studythe interaction between this quality decision and the optimal tax/subsidy onprivate health care.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 562

Classification and Topics

• Classification: Wirtschaft
• Subject: public health care ; private health care ; waiting time ; healthqueues.

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hoel, Michael ; Sæther, Erik Magnus
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/75694
• Last update: 10.03.2025, 11:42 AM CET