title: The cost of rationing medical care by insurance coverage and by waiting.
abstract: This paper raises the question of the least-cost institutional mechanism to secure the value of certainty by reducing risk over the purchase of medical care. Two methods of reducing risk are evaluated: financing medical care with 'complete insurance', that is, ready access to medical care that is free at the point of purchase; and rationing by waiting time in a national health service that supplies a limited volume of medical care. The first system corresponds to the type of insurance held by most people in the United States, while the latter represents a stylized model of a national health service. The cost of over-utilization of services by insured consumers in the U.S. is substantial--larger on a per-family basis, and far larger for the nation, than the cost of under-utilization by those who lack insurance. The cost of rationing by waiting is estimated to be between $541 and $828 per family (in 1984 dollars). Thus, both systems involve costly mis-allocation of resources.
authors.affiliation: Institute of Health Services Research, University of Minnesota, Minneapolis 55455, USA.
authors.forename: R
authors.initials: R
authors.lastname: Feldman
mesh_terms: D000206:Actuarial Analysis; D015276:Health Care Rationing / Q000191:economics*; D005102:Health Expenditures; D006296:Health Services / Q000706:statistics & numerical data; D006801:Humans; D019458:Insurance Coverage; D017059:Models, Econometric; D012306:Risk; D006113:United Kingdom; D014481:United States; D014850:Waiting Lists