Dynamic hospital competition under rationing by waiting times

Sá, Luís; Siciliani, Luigi; Straume, Odd Rune

doi:10.1016/j.jhealeco.2019.06.005

Cited by 16 publications

(12 citation statements)

References 28 publications

(30 reference statements)

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“…Our study integrates and strengthens the findings by Sá et al (2019) in a context where hospitals can also choose the quality of treatment. Similar to their study, hospitals cannot directly control waiting times, but affect them through their policy choice (i.e., by affecting the equilibrium mechanism of demand and supply).…”

Section: Introductionsupporting

confidence: 90%

“…The two sides of the market are, therefore, balanced by rationing demand through waiting. As standard in the literature (Breeke et al, 2008; Chen, Meinecke, & Sivey, 2016; Sá et al, 2019), equilibrium waiting time is implicitly defined by the following equation:

X^{D} (q, w, u) - \overset{X}{true} = 0

…”

Section: The Modelmentioning

confidence: 99%

“…Performance‐oriented financial incentives involving waiting times are usually designed as if they were independent from other dimensions of healthcare provision, especially the clinical quality. In this respect, Sá, Siciliani, and Straume (2019) show that free patient choice policies, which are usually seen as an incentive for the quality of care, have a counterproductive effect on waiting time policies.…”

Section: Introductionmentioning

confidence: 99%

“…Similar to their study, hospitals cannot directly control waiting times, but affect them through their policy choice (i.e., by affecting the equilibrium mechanism of demand and supply). With respect to Sá et al (2019), however, in our model hospitals also choose the quality of treatment. This triggers a new trade‐off between waiting times and quality that, as argued above, entails crucial implications for the evaluation of waiting time policies.…”

Section: Introductionmentioning

confidence: 99%

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A note on the trade‐off between waiting times and quality in a constrained hospital market

Lisi

Pignataro

2020

Health Economics

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While aging population and technological innovation are expected to increase healthcare demand in the future, increase in healthcare spending is not likely to be sustainable in times of fiscal constraint. This might lead to a tightening of hospital capacity and, potentially, to higher patient waiting times. This paper studies waiting times and quality in a healthcare market where semi‐altruistic hospitals operate at full capacity. We show that in this context a trade‐off between waiting times and quality emerges which, if hospitals dislike patients to wait, decreases the incentive for the quality of care. We also show that, when hospitals operate at full capacity, standard waiting time policies involving targets and penalties (e.g., “Targets and Terror” in England) can meet the target at the expense of a lower quality of care, with relevant implications for the empirical evaluation of waiting time policy.

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Section: Introductionsupporting

confidence: 90%

X^{D} (q, w, u) - \overset{X}{true} = 0

…”

Section: The Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

A note on the trade‐off between waiting times and quality in a constrained hospital market

Lisi

Pignataro

2020

Health Economics

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show abstract

“…Only when the competitive demand segment is sufficiently small, hospital competition reduces waiting times. In a follow-up article, Sá et al (2019) allows for dynamics in the above environment. Additionally, the authors assume that a policy-maker can punish hospitals for long waiting times.…”

mentioning

confidence: 99%

Patients' free choice of physicians is not always good

Waibel

2021

Health Economics

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Improving the quality of healthcare is a key objective in the design of healthcare markets. Empirical evidence suggests that physicians' experience is an important element in ensuring the quality of medical treatment. Junior physicians provide a lower quality of treatment than senior physicians. Mortality and morbidity rates are significantly higher in cohort turnover months-often referred to as the "August Killing Season"-than in other months (Young et al., 2011). Junior physicians can improve their skills and reach a senior level by treating a sufficiently large number of patients. However, patients prefer treatment by a senior physician. 1 Yet, rejecting a junior physician inhibits these physicians' learning process. Thus, the rejection of junior physicians reduces welfare in the long term. Our paper investigates the conditions that lead to reduced social welfare when patients have the freedom to choose their physician.We employ a theoretical model to compare social welfare outcomes in a monopolistic market with those in a competitive market. There is one hospital with two junior and two senior physicians in the monopolistic market. There are two symmetric hospitals in a competitive market, each with one junior and one senior physician. Senior physicians provide a higher quality of treatment than junior physicians. If a junior physician treats enough patients during the first period, he will be a senior physician during the second period. Each physician has the same capacity to treat a quarter of the patient population. If the demand for a physician exceeds his immediate capacity, patients visiting this physician incur heterogeneous waiting costs. Waiting costs increase in parallel with excess demand. Each hospital either lets patients freely choose their physician or matches patients randomly to physicians. We refer to the former as a free-choice system and the latter as a random-allocation system.

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Spatial Competition Models in Health Care Markets: A Review

Levaggi,

Levaggi

2024

Rev Ind Organ

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Through time, spatial competition has become the natural environment for studying a number of problems, ranging from product differentiation to mail order versus traditional business, to service provision under various assumptions about the institutional setting. Health economics research has greatly benefited from the intuitions that underlie the Hotelling model and several authors have contributed to the literature on the architecture of the market for health care by proposing models within this framework. In this paper we explore how spatial competition has been used in health economics to improve the knowledge of the mechanisms of the market for health care through the derivation of significant policy implications. One of the most important messages is that in spite of competition, the regulator still should have a central role in the architecture of the market and policies have to be carefully tailored in order to avoid the onset of perverse, undesired effects on quality and welfare.

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Dynamic hospital competition under rationing by waiting times

Cited by 16 publications

References 28 publications

A note on the trade‐off between waiting times and quality in a constrained hospital market

A note on the trade‐off between waiting times and quality in a constrained hospital market

Patients' free choice of physicians is not always good

Spatial Competition Models in Health Care Markets: A Review

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