Using panel methods to model waiting times for National Health Service surgery

Long waiting times for non-emergency (elective) procedures are a central feature of the UK's National Health Service, with about 1 million people waiting for surgery at any one time. This paper develops empirical models of the demand for and supply of elective surgery which simultaneously determine waiting times. The models are tested by using a panel of annual data for 5499 small areas from 1991 to 1998. Supply and demand functions are estimated for all specialties combined and for seven individual specialties, using panel data methods that incorporate simultaneously determined variables. The elasticity of demand with respect to waiting time varies between specialties but is always quite small. The results are discussed in the light of UK Government policy initiatives designed to reduce waiting times substantially. The analysis suggests that these initiatives will not stimulate demand markedly and therefore stand a good chance of succeeding provided that adequate additional resources are made available.