Tanya Saxell: Allocation and Prioritization in Public Health Care

Event details

Author:  Tanya Saxell (VATT)

Abstract: In many settings, scarce public resources are allocated to consumers through prioritization systems such as waiting lists. We build a structural model of demand and supply to analyze resource allocation and prioritization via waiting lists for public services under price regulation and budget constraints. We also allow the private sector to compete for consumers using prices. Using comprehensive administrative data on oral health care services, we find that the public sector prioritizes consumers with high health risks and higher welfare cost of waiting. High-risk consumers wait less and are more likely treated in the public sector, while low-risk consumers disproportionately opt for expensive private sector services. Prohibiting prioritization and providing equal access to public services would reallocate public resources away from high-risk consumers with large distributional welfare consequences. 

Host: Luigi Siciliani  (York)

Cluster: Health