Modelling the Dynamics of a Public Health Care System: Evidence from Time-Series Data

Fabrizio Iacone (), Steve Martin, Luigi Siciliani () and Peter C Smith

Discussion Papers from Department of Economics, University of York

Abstract: The English National Health Service was established in 1948, and has therefore yielded some long time series data on health system performance. Waiting times for inpatient care have been a persistent cause of policy concern since the creation of the NHS. This paper develops a theoretical model of the dynamic interaction between key indicators of health system performance. It then investigates empirically the relationship between hospital activity, waiting times and population characteristics using aggregate time-series data for the NHS over the period 1952— 2005. Structural Vector Auto-Regression suggests that in the long run: a) higher activity is associated with lower waiting times (elasticity = -0.9%); b) a higher proportion of old population is associated with higher waiting times (elasticity = 1.6%). In the short run, higher lagged waiting time leads to higher activity (elasticity = 0.2%). We also find that shocks in waiting times are countered by higher activity, so the effect is only temporary, while shocks in activity have a permanent effect. We conclude that policies to reduce waiting times should focus on initiatives that increase hospital activity.

Keywords: Waiting Times; Dynamics; Vector Auto-Regression (search for similar items in EconPapers)
JEL-codes: I11 I18 H42 H52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-hea
Date: 2007-07
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Working Paper: Modelling the Dynamics of a Public Health Care System: Evidence from Time-Series Data (2007)
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