Patient waiting times at public hospitals and the demand for private care
Key objective:
To analyse the factors influencing waiting times for electives procedures; to develop an empirical model of expected waiting times and estimate the impact of waiting times on insurance purchase and hospital choice
Reducing public hospital waiting times is the central issue in the Australian health care debate. Subsidies to private health insurance and increased expenditures to shorten waiting times both aim to ease pressure on the public hospital system. However there is no empirical evidence to support the relative equity or efficiency merits of alternative policies. This study will develop an empirical model of expected waiting times and estimate the impact of waiting times on insurance purchase and hospital choice. The model will be used to evaluate the effectiveness of alternative policies to improve access to public hospital care, a key factor in the National Priority of promoting and maintaining good health.
We have estimated an empirical model of waiting times and the demand for private health insurance using classical econometric techniques. We find that expected waiting time does not increase the probability of buying insurance but a high probability of experiencing a long wait does. Overall we find there is no significant impact of waiting time on insurance purchase. In addition, we find that the inclusion of individual waiting time variables removes the evidence for favourable selection into private insurance, as measured by self-assessed health. This result suggests that a source of the favourable selection by reported health status may be aversion to long waits among healthier people. This research has been presented at the 1st Australasian Workshop on Econometrics and Health Economics in Melbourne in April 2010, the Australian Health Economics Society Conference in Hobart in October 2009 and at the Labour Econometrics Workshop in Brisbane in August 2009. It has also been accepted for presentation at two international conferences: the 3rd Biennial Conference of the American Society of Health Economists Conference, Cornell University, June 2010, and the European Conference of Health Economics, Helsinki, July 2010.
We have also undertaken descriptive econometric analysis of waiting times and written a paper on the impact or patient status on waiting times entitled “Do private patients have shorter waiting times for elective surgery? Evidence from New South Wales public hospitals”. We find that private patients have substantially shorter waiting times, and tend to be admitted ahead of their listing rank, especially for procedures that have low urgency levels. We also explore the benefits and costs of this preferential treatment on waiting times. This paper has been accepted for publication in Economic Papers.
Further research analyses the factors influencing the distribution of waiting times for elective hospital procedures entitled: “Non-clinical determinants of waiting times for elective admissions in NSW public hospitals”. We undertake Oaxaca-Blinder and DiNardo-Fortin-Lemieux decomposition analyses to attribute variation in waiting time to a component explained by clinical need and to differential treatment effects. We find evidence that socioeconomically advantaged patients and patients in several Area Health Services have shorter waiting times than their clinically comparable counterparts. A paper based on this research has been accepted for presentation at the 3rd Biennial Conference of the American Society of Health Economists Conference, Cornell University, June 2010.
Another component of this research develops an equilibrium model of waiting times using regional data. The empirical results imply that demand for elective surgery is affected negatively, and supply positively, by waiting time. The estimated elasticity of demand with respect to waiting time is found to be higher in NSW than reported in studies using data on the UK National Health System. A paper based on this research, “An Equilibrium Model of Waiting Times for Elective Surgery in NSW Public Hospitals”, was presented at the 3rd World Conference of Spatial Econometrics Association held in Barcelona in July 2009
The last component of this research to date, analyses the different impacts of waiting lists and waiting times on insurance demand. In this research we revisit the analysis in an influential paper by Besley, Hall and Preston (JPubEc, 1999) using Australian data and test the use of waiting lists as a proxy for waiting time in models of insurance demand. Unlike Besley et al., we find that the long-term waiting list is not a significant determinant of the demand for insurance. However we find that long waiting times do significantly increase insurance. Overall however waiting times do not have a positive impact of insurance demand. A paper from this research, “The demand for private health insurance: do waiting lists or waiting times matter?” has been accepted for presentation at the 3rd Biennial Conference of the American Society of Health Economists Conference, Cornell University, June 2010, and the European Conference of Health Economics, Helsinki, July 2010.
Funding
Australian Research Council
CHERE staff
Elizabeth Savage, Meliyanni Johar
Collaborators
Professor Michael Keane1, Dr Olena Stavrunova1, Associate Professor Glenn Jones2, Dr Oleg Yerokhin3
1. Faculty of Business, UTS
2. Macquarie University
3. Wollongong University
