Modelling the dynamics of a public health care system: evidence from time-series data

The English National Health Service (NHS) was established in 1948, and has therefore yielded some long time series data on health system performance. Waiting time for inpatient care have been a persistent policy concern since the creation of the NHS. After developing a simple theoretical framework of the dynamic interaction between key indicators of health system performance, we investigate empirically the relationship between hospital activity, waiting time and population characteristics using aggregate time-series data for the NHS over the period 1952 to 2003. Structural Vector Autoregression (S-VAR) suggests that in the long run: higher activity is associated with lower waiting times (elasticity = −0.9); an increase in the elderly population is associated with higher waiting time (elasticity = 1.3). In the short run, higher lagged waiting time leads to higher activity (elasticity = 0.12). We also find that shocks in waiting times are countered by higher activity, so the effect is only temporary.