We develop a model of waiting lists for public hospitals when physicians deliver both private and public treatment. Public treatment is free but rationed, i.e., only cases meeting some medical criteria area admitted for treatment. Private treatment has no waiting time but entails payment of a fee. Both physicians and patients take into account that each patient treated in the private practice schedule reduces the waiting list for public treatment. We show that physicians do not necessarily select the mildest cases from the waiting list. We provide sufficient conditions on the rationing policy under which cream skimming is always partial. We show that, to a large extent, one can bypass the analysis of doctors' behavior in the characterization of patient selection.JEL numbers: I11, I18, H51

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We test for asymmetric information in the UK private health insurance (PHI) market. In contrast to earlier research that considers either a purely private system or one where private insurance is complementary to public insurance, PHI is substitutive of the public system in the UK. Using a theoretical model of competition among insurers incorporating this characteristic, we link the type of selection (adverse or propitious) with the existence of risk-related information asymmetries. Using the British Household Panel Survey, we find evidence that adverse selection is present in the PHI market, which leads us to conclude that such information asymmetries exist.The extent to which individuals have privileged information on their own risks (ex-ante asymmetric information) is important because it is one of the main justifications for public intervention in insurance markets (Dahlby, 1981). Indeed, individuals who know that their risk of falling ill is low will have a low willingness to pay for health insurance.This might lead to the well-known problem of adverse selection, which results in lower risk individuals enjoying less than full insurance.

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