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Third degree waiting time discrimination: optimal allocation of a public sector healthcare treatment under rationing by waiting
Author(s) -
Gravelle Hugh,
Siciliani Luigi
Publication year - 2009
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.1423
Subject(s) - rationing , waiting list , welfare , health care rationing , time allocation , public sector , economics , health care , marginal utility , optimal allocation , operations management , actuarial science , microeconomics , medicine , mathematics , surgery , economic growth , economy , market economy , mathematical optimization , management , transplantation
In many public healthcare systems treatments are rationed by waiting time. We examine the optimal allocation of a fixed supply of a given treatment between different groups of patients. Even in the absence of any distributional aims, welfare is increased by third degree waiting time discrimination: setting different waiting times for different groups waiting for the same treatment. Because waiting time imposes dead weight losses on patients, lower waiting times should be offered to groups with higher marginal waiting time costs and with less elastic demand for the treatment. Copyright © 2008 John Wiley & Sons, Ltd.