We would like to invite you to a research seminar by Dr. Erez Yerushalmi, a Senior Lecturer in Economics and Business at Birmingham City Business School – Birmingham City University.
His presentation "Imputing the social value of public healthcare: a general equilibrium simulation of Israel" will take place on Thursday, October 17 at 5 pm in Room 105.
BACKGROUND: Countries with universal healthcare have experienced a rising demand for healthcare services, without a corresponding rise in public supply. This has led to a debate on whether to increase private healthcare services - especially in hospitals and second-tier healthcare. Proponents for increasing private healthcare highlight gains in efficiency and innovation, while opponents emphasize its risk to social welfare. However, the monetary value of these gains and losses is seldom quantified.
STUDY QUESTION: What is the minimum social value of public healthcare that corresponds to indifference between gains in economic efficiency with losses to social welfare?
METHOD: We develop a general equilibrium model that distinguishes between public-private healthcare services and public-private financing. Our approach resembles contingent valuation methods that introduce a hypothetical market. However, it is different because we use numerical simulation techniques to compare a regulated with a deregulated health-labor market. The social value is modelled as a byproduct of healthcare services. The model is then calibrated to our unique health focused Social Accounting Matrix of Israel, and simulates the introduction of a hypothetical health-labor market - given that it is heavily regulated in the baseline as in Israel.
RESULTS: We estimate the minimum social value at around 26% of public healthcare financing. We furthermore simulate a deregulated healthcare scenario that internalizes the imputed value of social value and search for the optimal weight of public and private healthcare provision.
CONCLUSION AND IMPLICATIONS: When assessing the best type of health care, policy makers should weigh the economic gains of deregulation with the lost social value. We show that well-being may even decrease in cases of over-privatization.
Autor - Mgr. Ema C. Stašová