A Model of Hospital Congestion in Developing Countries

A Model of Hospital Congestion in Developing Countries

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Abstract

This paper explains the observed hospital congestion in developing countries as the result of the interaction
between ambulatory care physicians who refer patients to hospitals, and hospitals which must detect the
severity of the incoming patients’disease. In an imperfect information environment, physicians might refer
to top-tier hospitals patients with mild diseases that could be properly addressed by regular hospitals,
just to ful…ll patients’demand for the best care. Yet, the triage capability of top-tier hospitals declines
if the hospital is subject to congestion, which, in turn, provides incentives to physicians to refer more
patients to these hospitals. The model presents two equilibria, one with perfect triage, and another with
triage errors and hospital congestion. In this last equilibrium, a higher hospital size raises the likelihood
of congestion.

Keywords

Hospital congestion, hospital size, referral system, health policy, developing countries.

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