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Would Allowing Privately Funded Health Care Reduce Public Waiting Time? Theory and Empirical Evidence from Canadian Joint Replacement Surgery Data
Author(s) -
Chen Hong,
Qian Qu,
Zhang Anming
Publication year - 2015
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/poms.12260
Subject(s) - subsidy , incentive , government (linguistics) , public economics , business , public policy , health care , health policy , public health , economics , medicine , nursing , economic growth , microeconomics , linguistics , philosophy , market economy
This study develops a theoretical model and then, using Canadian joint replacement surgery data, empirically tests the relationship between government policies that promote privately funded health care and patients’ waiting time in the public health care system. Two policies are tested: one policy allows opt‐out physicians to extra‐bill private patients, and the other provides public subsidies to private patients. We find that both policies are associated with shorter public waiting time, and that the subsidy policy appears to be more effective in waiting time reduction than the extra‐billing policy. Our findings are consistent with a dominant demand‐side effect in that these policies would provide patients an option, and some incentive, to opt out of the public health system, shifting the demand from the public health system to the private care market.