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Explicit vs implicit rationing in health care provision: a welfare approach
Rosella Levaggi  1@  , Laura Levaggi  2@  
1 : Department of Economics, University of Brescia  (UNIBS)  -  Website
Via San Faustino 74B 25100 BRESCIA -  Italy
2 : Faculty of Science and Technology, Free University of Bolzano-Bozen,  (UNIBZ)
Piazza Universita' 1, 39100 Bolzano-Bozen -  Italy

We study the welfare properties of direct restrictions based on cost-effectiveness

measures against indirect methods represented by waiting lists, as

a policy instrument used to improve equity in the access and finance

of a public health care system. Health care is supplied for free,

but with some restrictions by the public health sector. Patients can

choose to address their demand elsewhere by stipulating a private

health care insurance policy. Our model shows that if the individual response

to treatment is independent of income and cannot be observed by the

patient, the choice of opting out simply depends on income and in

this respect both instruments are quite similar. The study of the

welfare properties shows that in general there is not a superior instruments.

Restrictions may improve welfare of relatively rich individuals. In general, for

an equal number of individuals opting out of the public system,

explicit restrictions produce a lower welfare loss than implicit instruments.



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