Priority access to health care: Evidence from an exogenous policy shock.

Access to care is an important issue in public health care systems. Unlike private systems, in which price equilibrates supply and demand, public systems often ration medical services through wait times. Access that is given on a first come, first served basis might not yield an allocation of resources that maximizes the health of a population, potentially creating suboptimal heterogeneity in wait times. In this study, we examine an access disparity between two groups of patients-established patients and new patients. We exploit an exogenous policy change-implemented by the U.S. Veterans Health Administration-that removed the disparity and homogenized the wait time. We find strong evidence that without such a policy, established patients have priority access over new patients. We discuss whether this is a suboptimal allocation of resources. We additionally find that established patient priority access is an important determinant of access for new patients; accounting for it increased the explanatory power of our statistical model of new patient wait times by a factor of five. The findings imply that policy and management decisions may be more effective in achieving the optimal distribution of access if access heterogeneity is recognized and accounted for explicitly.