Rationing health care without prices Every health care system faces two fundamental questions: how much health care should be produced? ▣who should get it? Private markets use prices to answer these questions Scarce resources go to those willing and able to pay the most for them (price rationing) With price rationing,poor are disadvantaged Bhattacharya,Hyde and Tu-HealthEconomics
Bhattacharya, Hyde and Tu – Health Economics Rationing health care without prices Every health care system faces two fundamental questions: how much health care should be produced? who should get it? Private markets use prices to answer these questions Scarce resources go to those willing and able to pay the most for them (price rationing) With price rationing, poor are disadvantaged
If not price rationing,then what? Health care is free in Beveridge systems so must be another way of rationing care Some strategies include: Queuing Gatekeeping Limiting coverage through health technology assessment Bhattacharya,Hyde and Tu-HealthEconomics
Bhattacharya, Hyde and Tu – Health Economics If not price rationing, then what? Health care is free in Beveridge systems so must be another way of rationing care Some strategies include: Queuing Gatekeeping Limiting coverage through health technology assessment
Queues and gatekeepers
Queues and gatekeepers
Why do queues arise? Because Beveridge governments mandate free (or very-low cost)care Demand can be high In private markets,physician and nurse salaries increase so that supply matches demand In Beveridge systems,salaries set by government so market cannot equilibrate High demand and low supply results in queues Bhattacharya,Hyde and Tu-HealthEconomics
Bhattacharya, Hyde and Tu – Health Economics Why do queues arise? Because Beveridge governments mandate free (or very-low cost) care Demand can be high In private markets, physician and nurse salaries increase so that supply matches demand In Beveridge systems, salaries set by government so market cannot equilibrate High demand and low supply results in queues
Cost of queues As a result of long queues, 1990:median wait times for English patients was 5 months More than 50%of patients had to wait longer than a year! There could be patients desperately needing quick care but not receiving it Long wait times a very politically sensitive issue Many reforms since then focused on reducing long wait times Bhattacharya,Hyde and Tu-HealthEconomics
Bhattacharya, Hyde and Tu – Health Economics Cost of queues As a result of long queues, 1990: median wait times for English patients was 5 months ◼ More than 50% of patients had to wait longer than a year! There could be patients desperately needing quick care but not receiving it Long wait times a very politically sensitive issue Many reforms since then focused on reducing long wait times