Does waiting times decrease or increase operational costs in short and long-term? Evidence from Portuguese public hospitals

Abstract

The Portuguese National Health System is composed of all public entities offering health services. There has been a successive increase in expenditure in recent years due to various factors that have contributed to a high degree of uncertainty about the evolution of operating costs in Public Business Hospitals. This research's main objective is to study the relationship between operational costs and waiting times as well as costs with healthcare professionals and waiting times in both external consultations and hospital surgeries. Furthermore, we will empirically assess the presence of U-shaped behaviour in both of these two relationships. We have included a sample of 38 hospitals considered in the Portuguese National Health System. We also included, in our analysis, five groups of public business hospitals, according to the Administrative Central Agency of Portugal's Health Service, considering the period between January 2015 and December 2019. To validate the two relationships proposed, the Autoregressive Distributed Lag panel model was used. This study highlights that longer waiting times for external consultation and surgery significantly affect hospital costs and suggest that longer waiting times do not merely increase absence rates. The study also proves that there are long-term effects that last beyond the short-term waiting period.

Keywords: Health economics; Health production; Operational costs; Public hospitals; Waiting times.