The demand for elective surgery in a public system: time and money prices in the UK National Health Service

We construct a model of the admission process for patients from general practices for elective surgery in the UK National Health Service. Public patients face a positive waiting time, but a zero money price. Fundholding practices faced a positive money price for each patient admitted. The model is tested with data on general practice admission rates for cataract procedures in an English Health Authority. Admission rates are negatively related to waiting times and distance to hospital. Practices respond to financial incentives as predicted by the model: fundholding practices have lower admission rates than non-fundholders and respond differently to changes in waiting times and patient characteristics.