The interdependence between hospital choice and waiting time -- with a case study in urban China

TL;DR

This paper introduces a novel model capturing the endogenous relationship between hospital choice and waiting time, revealing that traditional models overestimate policy effectiveness in urban Chinese healthcare.

Contribution

The paper develops a general, equilibrium model linking hospital choice and waiting time, incorporating the option to opt out, and applies it to a case study in China.

Findings

Traditional models overestimate policy effectiveness.

Endogenous modeling reveals limited impact of current interventions.

Alternative interventions show more potential.

Abstract

Hospital choice models often employ random utility theory and include waiting time as a choice determinant. When applied to evaluate health system improvement interventions, these models disregard that hospital choice in turn is a determinant of waiting time. We present a novel, general model capturing the endogeneous relationship between waiting time and hospital choice, including the choice to opt out, and characterize the unique equilibrium solution of the resulting convex problem. We apply the general model in a case study on the urban Chinese health system, specifying that patient choice follows a multinomial logit (MNL) model and waiting times are determined by M/M/1 queues. The results reveal that analyses which solely rely on MNL models overestimate the effectiveness of present policy interventions and that this effectiveness is limited. We explore alternative, more effective, improvement interventions.