Addressing Private Practice in Public Hospitals

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Title: Addressing Private Practice in Public Hospitals
Authors: Guo, XidongParlane, Sarah
Permanent link: http://hdl.handle.net/10197/11437
Date: May-2020
Online since: 2020-07-23T16:21:05Z
Abstract: This paper proposes a theoretical analysis of the private provision of care within public hospitals and assesses its impact on the quality and cost of healthcare. We also capture this policy’s impact on the number of outpatients that are seen and the number that are cured. We show that the private income gathered by consultants engaged in dual practice has a negative impact on the level of care being provided as it incentivises consultants to focus on the number of patients seen. However, the private fees generate lower healthcare costs. Hence the removal of private practice in public hospitals is only optimal when the benefit associated with curing patients is large enough. The impact on waiting lists is ambiguous. Considering that consultants may differ in their ability, we show that the optimal contracts enable senior doctors (with more experience) to get a greater private income than junior doctors when discrimination between senior and junior physicians is allowed. When discrimination is not allowed, it is optimal to offer a uniform contract. Proposing distinct contracts, as currently done in Ireland, increases healthcare costs due to incentive compatibility issues.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Start page: 1
End page: 29
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP2020/13
Copyright (published version): 2020 the Authors
Keywords: HealthcarePublic hospitalDual practiceOptimal contractsConsultant incentives
metadata.dc.subject.classification: D86; I11; I18; L32
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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