Sunday, September 28, 2008

Should We pay to See the Doctor?

Is it a good Idea to Charge People £10 to see the Doctor?

1. It would raise revenue to help improve health care.
2. It would reduce waiting lists
3. It would reduce time wasters.
4. It could increase social efficiency. - Free Health care may lead to over consumption.

In the below diagram social efficiency occurs at Q2. Therefore the price should not be zero. Of course, it depends on elasticity of demand and how much positive externalities there are.


Arguments against Charging to see the Doctor

1. Demand for health care is quite inelastic, higher prices would not reduce demand very much. There are not many time wasters who go to see the doctor.
2. Positive externalities of health care quite high
3. Going to doctor is merit good, especially for cancer screening
4. Would increase inequality
5. Cost of collecting the money.
6. Only a small % of total NHS cost.

Paying for prescriptions is a way of paying to see the doctor.

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