A Demand-Oriented Approach to Health Care Capacity Planning

Danny Wende (), Thomas Kopetsch and Wolfram Richter
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Danny Wende: Dresden University of Technology
Thomas Kopetsch: affiliation not available

No 14860, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The planning practice of health care capacities suffers from sectoral and regional constraints and it remains difficult to ensure an equal access for patients. Moreover, standard planning approaches lack the choice-theoretic grounding necessary for making reliable predictions of the demand and competition for supplied care. This paper presents a general equilibrium model designed to overcome such shortcomings. The derived metric of access to care is demand-oriented measuring the time patients waste seeking treatment. It contrasts with the usual metrics based on the floating catchment area (FCA) method, which suffer from supply bias and ad hoc specification. The approach is illustrated using Germany as an example. Much in line with official planning figures, overcapacities are shown to exist in all specialities. However, a closer look at the data provides a differentiated picture. Overcapacities are typical for urban regions and they go hand in hand with supply deficits in rural areas, albeit to a specialty-specific extent. In smaller towns, the supply is more in line with demand.

Keywords: general equilibrium model; endogenous demand for health services; capacity planning; access to health care; gravity equation; floating catchment area metric (search for similar items in EconPapers)
JEL-codes: C3 D58 H72 I18 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2021-11
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