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We study the link between illness severity and the use of public health care services by the privately insured under a public health system. Our theoretical model shows that this relationship will depend on the prioritization established by the public health authorities, the cost of waiting and the private sector's risk selection behavior. In our empirical exercise, based on the British Household Panel Survey data, we find the consistent pattern that both the most severe cases and the least severe cases are more likely to be treated under the public system, leading to a U-shaped relationship between severity and public use. As our theoretical model points out, this is not necessarily a consequence of risk selection by private health providers, but it could be just a consequence of prioritization by the public sector.
Authors
Research Fellow University College London
Marcos is a Research Fellow at IFS, an Affiliate at the Rural Education Action Program and a Professor of Economics at the University College London.
Pau Olivella
Working Paper details
- DOI
- 10.1920/wp.ifs.2022.2122
- Publisher
- Institute for Fiscal Studies
Suggested citation
Olivella, P and Vera-Hernandez, M. (2022). Prioritization, risk selection, and illness severity in a mixed health care system. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/prioritization-risk-selection-and-illness-severity-mixed-health-care-system (accessed: 17 May 2024).
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