Waiting Times and Cost Sharing for a Public Health Care Service with a Private Alternative: A Multi-Agent Approach

Cost sharing represent a well-established tool for the control of health care demand in many Oecd countries, even though it is used with caution, and in combination with other instruments, in order to avoid potential negative impacts on access to essential health care services. Waiting lists and waiting times represent an alternative (and implicit) way to control demand in public health care systems, even though rationing by waiting may be an inferior solution to cost-sharing in terms of welfare. This paper focuses on the use of waiting times, cost-sharing, and other tools (in particular, priority and appropriateness criteria) in order to control demand for a public outpatient health service in presence of a fully paid out-of-pocket private alternative. We develop an agent-based model where heterogeneous agents maximise their individual utility based on income and health status. On this basis, we develop some computational experiments based on micro-simulations that offer some useful insights for health care policy. In particular, we show that: i) the presence of a private alternative to public treatment can improve social welfare and health equity in a NHS, when public supply is constrained by a fixed budget and longer waiting times than the private one; ii) using prioritisation of waiting lists without any copayment to control the demand for public treatment may produce high performances in terms of social welfare, health equality and policy efficiency; iii) applying a moderate copayment rate as a tool to control public demand could determine the same policy efficiency of using only priority lists, if the copayment revenues are used to fund the public provision.