Description:
We develop a model of waiting lists for public hospitals when physicians
deliver both private and public treatment. Public treatment is
free but rationed, i.e., only cases meeting some medical criteria area
admitted for treatment. Private treatment has no waiting time but
entails payment of a fee. Both physicians and patients take into account
that each patient treated in the private practice schedule reduces
the waiting list for public treatment. We show that physicians do not
necessarily select the mildest cases from the waiting list. We provide
su±cient conditions on the rationing policy under which cream skimming
is always partial. We show that, to a large extent, one can bypass
the analysis of doctors' behavior in the characterization of patient
selection.