Hospital specialists' private practice and its impact on the number of NHS patients treated and on the delay for elective surgery.

Abstract

This paper analyses UK NHS waiting times and waiting lists for elective surgery looking at the hospital specialists' behaviour and the conflict of interest these may face when allowed to practice privately. We look at the relationship between the government as the health care purchaser and principal of a two-tier hierarchy, and two hospital specialists, the agents, that deal with elective and emergency treatement. Specialists are organised in a separated structure, each responsible for only one type of surgery (either elective or emergency). We formalise specialists' preferences when dealing with the two activities. We see how specialists' interest in the income obtained with private practice (and altruism) affects negatively (positively) the optimal NHS numbers treated and increases the waiting time for elective surgery. Asymmetry of information also has a negative impact on the NHS leading to fewer patients treated or higher transfers paid. If remuneration is based on performance, transfers have to take private practice into account. As a result, there may be benefits from extra investment so as to improve information systems as well as seeking out instruments for nurturing more altruistic behaviour on the part of the specialistswaiting times and lists; elective surgery; hospital specialists