Efficiency and welfare implications of managed public sector hospital waiting lists

A queuing model for public health service waiting lists is developed, and the implications for patient welfare of different systems for managing the waiting list are analysed. If patients are admitted to hospital on a first-come-first-served basis, a welfare gain is achieved by moving from a system of implicit to one of explicit rationing of access to the waiting list. If individual waiting times and hospital admissions are dependent on clinical priority, a further welfare gain is achievable without the use of explicit rationing, by reallocating the total waiting time from the more towards the less seriously ill. On efficiency and welfare criteria, a maximum waiting time guarantee does not appear to be a desirable development.