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Third, low-income consumers, more tolerant of waiting, might benefit less from capacity increases. Lowering public practice prices might benefit them more. However, an increase in capacity might increase visits the most for low-income consumers. 12/N.

Second, curbing private producers' market power might be difficult with congested public production if private producers cater to consumers who dislike waiting, as only a few private consumers might be influenced by small changes in public waiting times. 11/N.

The policy take-away is three-fold. First, reducing waiting times by just increasing production is difficult, as demand response will dampen the effect of capacity increase. Imposing demand restrictions might allow for larger decreases in waiting times. 10/N.

Visits to dentists increase and at the extensive margin visits by low-income consumers increase the most, while the share switching from private practices to public practices increases in income. 9/N

Consumer surplus increases for everyone but high-income consumers experience the highest increase in consumer surplus because all consumers are equally likely to visit a public practice, but high-income consumers dislike waiting time most. 8/N

I find that increasing production capacity reduces waiting times by 5% (1.5 days) without affecting private practice prices. Public practices’ market share rises by 13%, but mainly due to consumers who previously did not visit a dentist, explaining the lack of price effect. 7/N

In my counterfactual, I increase the public practice capacity by increasing the number of full-time-equivalent dentists at public practices by 20%. The counterfactual corresponds to an increase in evening and weekend work at public practices. 6/N.

Public producers are nonstrategic but waiting times arise through a congestion mechanism, as demand depends on waiting times and waiting times depend on demand. The exogenous number of dentists at a public practice determines production capacity. 5/N.

In my structural model, consumers choose between waiting for public sector care, paying more for private care, or not visiting a dentist. I can link visits to consumers’ characteristics, and consumers’ choices depend on their income and age. Private practices set prices. 4/N.

I study these issues in the Finnish dental care industry, an ideal setting due to its reliance on both public and private producers, absence of insurance, and individual-level visit data from both sectors. 3/N.

A common problem in healthcare systems with public and private production is long public sector waiting times, which raise equity issues as low-income consumers are left waiting, and possibly allows private producers to increase prices. 2/N.

#JMP alert!. Can increasing public healthcare production reduce waiting times, address equity concerns, and curb private sector market power in a setting with congested public services and costly private options? I find that it only partially addresses these issues. #EconTwitter

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