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Does more choice reduce waiting times?

Siciliani, L. (2004) Does more choice reduce waiting times? Health Economics, 14 (1). pp. 17-23. ISSN 1057-9230

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This paper develops a model of the supply of elective treatments within a duopolistic market structure where patients can be referred to the hospital with the lowest waiting times. We investigate the effect of a higher degree of substitutability among the two hospitals on equilibrium supply, waiting time and the size of the waiting list. The degree of substitutability is interpreted as the degree of choice or the extent to which patients can switch from one hospital to the other. We show that the greater the degree of substitutability among hospitals, the lower is the supply and the higher the waiting time. The effect on waiting list size is ambiguous. This result holds either when the hospital is remunerated with a fixed budget or with activity-based funding. However, the reduction in supply and the increase in waiting time generated by higher substitutability are higher when hospitals are remunerated with fixed budgets. The main implication of the model is that, under certain assumptions, policies aimed at increasing provider choice may fail to reduce waiting times.

Item Type: Article
Institution: The University of York
Academic Units: The University of York > Economics and Related Studies (York)
Depositing User: York RAE Import
Date Deposited: 28 May 2009 11:12
Last Modified: 28 May 2009 11:12
Published Version: http://dx.doi.org/10.1002/hec.888
Status: Published
Publisher: John Wiley & Sons
Identification Number: 10.1002/hec.888
URI: http://eprints.whiterose.ac.uk/id/eprint/6252

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